Afrox joins forces with Petredec
African Oxygen Limited (Afrox) has signed an import agreement with Petredec Limited, one of the largest global Liquefied Petroleum Gas ('LPG') traders, to ensure security of supply for existing customers.
The deal with Petredec, and Bidvest Tank Terminals, the owners of the current import facility leased by Afrox, will also provide growth opportunities in a number of sectors including hospitality, healthcare, automotive and other bulk industries.
Under the contract, Petredec is committed to shipping LPG orders on demand which will go a long way to mitigating shortages of locally produced LPG during the critical winter months.
This tonnage deal is expected to ensure a steady supply Afrox Handigas to the consumer and promote the use of LPG as an alternative to electricity and paraffin for heating, cooking, hot water, braaing, camping, hiking purposes and domestic LPG power generators.
"This agreement is beneficial to Afrox customers, providing security of supply in times of shortages," said Afrox Managing Director, Schalk Venter. "Afrox now has the flexibility to import large volumes at short notice when faced with short-term unplanned local supply shortages.
" LPG accounts for only 3% of the total fuel consumption of South Africa, and of that household use of LPG amounts to only 3% of the national LPG consumption, with the remainder being used in commercial and industrial applications, confirmed Venter.
"The use of LPG has remained constant over the past decade despite the Government’s focus on promoting the household use in South Africa," said Venter. "Compared to other developing countries South Africa still has a large potential for increasing the role of LPG in the energy mix.
"But security of supply is critical and local producers of LPG can’t guarantee sufficient product to ensure demand turns into market growth. Our contract with Petredec is intended to enable Afrox to grow its market share by meeting both consumer and industrial demand.
"It also means improved logistics planning will give Afrox the ability to support our LPG growth agenda in other emerging Southern African economies.
" Petredec and Afrox will utilise Bidvest Tank Terminals’ facilities in Richards Bay for LPG imports and will transport product to filing sites via road tankers and rail.