Six Ways to Capitalize On LPG Potential in Tanzania
When we were kids, we all knew cooking energy comes from biomass, firewood, and charcoal. We used it to cook and do everything. With regular awareness campaigns, there has been a steady increase in the number of households using LPG. The consumption of LPG has been growing at a rapid pace in Tanzania. The average growth rate of LPG in Tanzania is about 15 percent.
Here are six ways to profit from the growing demand for LPG in Tanzania
Six LPG Business Opportunities in Tanzania
1. Star LPG marketing company: This is a lucrative investment opportunity in Tanzania’s LPG value chain. As a large LP Gas marketer, you import the gas into LPG tanks at the storage facility. You will then bottle gas into cylinders for wholesale.
The initial capital requirement for this storage terminal is enormous: it will require Tzsh 1.5 billion, including land purchase. However, the business has a sizeable wholesale margin.
2. LPG Re-filling Plant
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, depending on the capacity and design of your plant. But the cost for setting up a mini LPG plant ranges from Tzsb300 to 500, excluding land.
3. Establishment of Gas Cylinder Manufacturing Plant: It will interest you that Tanzania imports LP Gas cylinders from India. So, there is no functional LP Gas cylinder manufacturing facility in Tanzania. This presents immense opportunities for aspiring entrepreneurs with a sizable amount of capital to set up a gas cylinder manufacturing plant in Tanzania.
4. Start a Profitable LP Cooking Gas Retail Shop: The LP Gas retail shop is popularly known as an LP Gas dealer or LP Gas reseller. As you walk along the streets of Tanzania, you will notice retail shops everywhere. 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 to the success of an LPG retail shop. Excellent customer services, word-of-mouth marketing and free delivery are crucial to success in this business.
5. LP Gas Distribution and Logistics: Opportunities in the segment involve distributing the LPG and its cylinders through tank trucks to different LPG gas dealers and LPG refilling centers in Tanzania.
6, LPG for petrol and diesel cars
In recent years due to the increase in diesel and petrol prices, transport costs have always been and become a huge cost for citizens. One of the ways to address this issue is by developing and gradually implementing the proven idea of using LPG for petrol-driven cars.
Sell LPG to industrial customers.
While most of the LPG marketers in Tanzania target households and commercial customers like hotels, restaurants, and schools, there is a huge market for industrial customers who use LPG as burning fuel for furnaces and boilers. In the LPG business, industrial customers are the backbone of the business as the product turnover is so fast.
