The Four Good LPG Business Opportunities to Start in Tanzania or Africa
Before 2005, Tanzania was slow to develop in terms of LPG growth. The LPG was used relatively exclusively by wealthy families and restaurant owners. But with a favorable fiscal environment, even pre-urban households is adopting LPG. Tanzania’s annual LP gas consumption grew from 5,500 metric tonnes in 2005 to 248,800 metric tonnes in 2021. Based on demand projections, LPG consumption will be about 450,000MT in 2028. This is rapid growth.
With this accelerated LPG growth, more than the existing LPG facilities will be required for the expected LPG distribution demand in Tanzania in the coming years.
More investment must be encouraged from both local and foreign investors and entrepreneurs to be able with this essential product.
If you are considering starting an LPG business, this article outlines the required LPG investment opportunities in Tanzania or Africa.
1.LPG Refilling Plant.
In terms of LPG filling plants, only a few large LPG marketing have small filling plants outside of Dar es Salaam. These big LPG companies neglect these regions, believing it will give them small profits. But with rapid LPG growth demand, there are opportunities for investors to set up small LPG filling plants in underserved regions of Tanzania. A typical LPG cylinder filling plant with a storage capacity of about 25MT may cost between $350,000 to $500,000.
2.LPG Bulk Trucks/Tankers Investment
In Tanzania the primary method for transporting LPG is through the truck. But there are limited LPG transportation trucks especially for bulk products. Our research reveals that in the year 2022 in Tanzania, there were at most 50 LPG bulk trucks. With the projected growth of LPG consumption in Tanzania and other landlocked countries. More LPG bulk trucks are required to cope with increasing LPG and distribution. Depending on the model and manufacture, the LPG bulk trucks will cost between USD$ 120,000 to USD 200,000.
3.LPG 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 significant LP Gas marketer, you receive LPG from the ships, store, and sell LP Gas commercial customers to super dealers(partners) and small LPG refilling plants. You can also sell to heavy consumers in landlocked countries such as Rwanda, Eastern DRC, Zambia, Malawi, Burundi, and Uganda. This is a capital-intensive project and requires a lot of technical expertise. But with proper planning and access to sufficient capital, investors can get fast returns from the project through this investment.
4.LPG storage manufacturing plant.
LPG cylinders are essential to ensure that LPG reaches end consumers. There are only two LPG cylinder manufacturing plants in Tanzania. If you can set up a new plant that will produce high-quality cylinders with the safety of international standards, you will have a limited marketplace for your business.
Evidently, there are good opportunities to invest in LPG opportunities from storage facilities to small filling plants and transportation trucks or tankers.
