SGP Forecasts Significant Sales Rebound
A notable recovery is anticipated for the company in 2026, following two consecutive years of sales contraction. SGP projects a sales growth exceeding 10% for the upcoming year.
First Quarter Performance and Full-Year Projections
Pinit Lojindarat, investor relations manager at SGP, stated that the company sold approximately 1 million tonnes in the first quarter. An additional 2.5 million tonnes are projected by the end of the year. Overseas markets and the trading business are expected to remain the dominant segments of the company’s portfolio, contributing 75% to total sales, while domestic sales are forecast to account for 25%.
Factors Behind Previous Sales Decline
The decrease in sales over the past two years was primarily attributed to an oversupply situation in China, SGP’s largest market. This was compounded by weakened petrochemical demand and fluctuating global liquefied petroleum gas (LPG) prices.
Signs of Recovery in Early 2024
However, the company’s performance in the first quarter of the current year demonstrated a clear upward trend. Revenue experienced a year-on-year increase of 17.6%, reaching 23.2 billion baht. This growth was propelled by a substantial 33.6% surge in overseas sales, particularly from China and Vietnam, alongside robust expansion in its trading operations.
Impact of Geopolitical Events on LPG Prices
Global LPG prices saw a significant spike following the outbreak of conflict in the Middle East. This geopolitical event disrupted supply routes through the Strait of Hormuz, a critical passage for one of the world’s major production hubs. The average prices for butane and propane, both types of LPG, escalated from approximately US$520 per tonne in January to $800 per tonne in March, marking a 53% increase.
Supply Chain Diversification and Risk Mitigation
In response to these transport disruptions, SGP has actively diversified its supply sources. The company has secured shipments from the United States and Africa to mitigate potential risks. Mr. Pinit indicated that these measures are expected to ensure a stable supply for the remainder of the year, even if the conflict continues.
Domestic Market Strength and Position
Domestically, SGP continues to hold a strong market share, especially within the automotive and industrial sectors. Sales growth in these areas has reportedly outpaced the broader market average. The company maintains its position as the second-largest player in Thailand’s LPG market, solidifying its standing despite prevailing challenging conditions.
Positive Energy Outlook for the Second Half
Looking ahead, the energy outlook for the second half of the year is bolstered by increasing demand across Asia. Emerging economies such as China and India, along with other developing nations, are expected to be key drivers of consumption in the industrial, transport, and household sectors. This growing demand is anticipated to provide a strong foundation for SGP’s future growth initiatives.
