How to Invest in LPG(Cooking Gas) Business: Nine Profitable LPG Business Opportunities in Tanzania or East Africa
If you are looking to exploit opportunities in Tanzania, you should try investing in the LPG(cooking gas) value chain.
If done right, LPG investment opportunities can be lucrative.
To help you learn how to invest in LPG, I am going to go over all the different forms of LPGas investment opportunities. So you can choose the most profitable option for you.
How Profitable Is LPG (Cooking Gas) Investment?
If you want to go into a business, the first thing would be to verify the profit potential of the business
As long as the food is a fundamental human need, cooking is a human necessity too. Everyone must eat cooked food.
Every family needs to eat cooked food. College and schools need to eat cooked food. And restaurants need to prepare their meal before they sell.
More cooking is done in households, hotels and restaurants, schools, and colleges. This is the simple reason why you should consider venture into LPG (cooking gas) business in Tanzania or East Africa.
With a reasonable amount of effort, new entrepreneurs can build admired LPG businesses to serve their communities — uplift themselves and their families.
There are several opportunities across the LP cooking gas value chain in Tanzania
1. LPG (Cooking Gas Wholesale) Distribution
Eligible entrepreneurs can apply to become a large oil marketing company’s super dealer who will work partly with them in the sale of the LPG, cookers, Fittings, and site installation in your target region.
Your supplier(large oil marketing company) will supply you full gas cylinders in bulk at a fair wholesale price and in turn, you will sell and earn a fair profit margin and you may decide to sell at retail price to double profit.
As a super dealer, you will have to make sure that you have enough full gas cylinder stock at any point to meet the orders of your clients instantly. You will also have at least one supply carrier to ensure effective supply. The initial capital investment for this venture ranges from Tsh 35,000,000 to Tsh 60,000,000.
2. LPG Gas Storage Plant:
This is a lucrative investment opportunity in Tanzania’s LPG value chain. This kind of investment has multiple sources of income. As a large LP Gas marketer, you import, store and sell LP Gas to super dealers, gas refilling station owners, and you can also sell in bulk to commercial customers like hotels, lodges, schools, and colleges. Furthermore, you can earn additional income by offering installation services of bulk tanks and pipeline networks to schools and hotels that need to use LP Gas for cooking.
The initial capital requirement for this storage terminal is huge: it will require not less than TZS 1.5 billion. However, the business is more profitable as you’d sell the LPG in bulk.
3. LPG Re-filling Plant/Center: I’d recommend this to anyone with financial muscle. As a refilling center, you will purchase bulk LP Gas and sell it to distributors and consumers. It’s capital intensive and the total project cost for setting up a refilling center in Tanzania is TZS 250 million to TZS 300 million.
Read also: A Sample business plan for an LP Gas(Cooking Gas) Refilling Plant in Tanzania
4. Establishment of Gas Cylinder Manufacturing Plant: It will interest you to know that Tanzania imports the LP Gas cylinders from India. So, there is no functional LP Gas cylinder manufacturing facility in Tanzania, and this presents immense opportunities for aspiring entrepreneurs with a sizable amount of capital to set up gas cylinder manufacturing plants in Tanzania.
6. Start a Profitable LP Cooking Gas Retail Shop: The LP Gas retail shop is popularly known as LP Gas dealer or LP Gas reseller. As you walk along the streets of Tanzania, you will notice that there are retail shops at every corner. It is cheap to start this business. You need TZS 2 million to TZS 6 million to start an LP Gas retail shop in Tanzania. The key factors to success in this business are location and your marketing skills. A prime location is a key determinant of the success of an LPG retail shop. Good location and excellent customer services are crucial to success in this business.
7. LP Gas Distribution and Logistics: Opportunities in the segment is to involve in distributing the LPG and its cylinders through tank trucks to different LPG gas dealers and LPG refilling centers in Tanzania
8. Cooking Gas Site Installation Services
Consumers like Schools, hotels, army campuses, and colleges buy LP cooking Gas in bulk. So they always need bulk tanks and a network of pipelines and cookers to enable to use of LPG for boiling and cooking
You can join forces with a team of a talented individual who has a technical capability and expertise and offering to provide and install LPG infrastructures such as above-ground LPG storage tanks
9 . Cooking Gas Products and Accessories
Offering LPGas products and accessories like cookers and fitting is another lucrative business opportunity in Tanzania.
Ready to Discuss Your Project?
We are committed to helping entrepreneurs to partner, start, and expand and grow and finance profitable investment opportunities in the oil and gas sector. Contact me today via info@tanzaniapetroleum.com and will be in touch to discuss your project.
