Japanese gas utility Osaka Gas Co. is entering the industrial gas market in Vietnam to cash in on growing local demand as it seeks mid- to long-term growth overseas.
Osaka Gas Liquid Co., its wholly owned industrial gas subsidiary, acquired for an undisclosed sum on Friday about a 25 percent stake in Singapore’s SQC Investment Pte. Ltd., which has 100 percent-owned Sing Industrial Gas Vietnam Co., Osaka Gas spokesman Takehisa Funami told NNA on Monday.
SQC Investment is an investment arm of Sing Swee Bee Group (SSB), a Singapore-based gas and energy firm. The Osaka-based gas supplier will provide expertise in industrial gas production to Sing Industrial Gas Vietnam as the Vietnamese firm plans to add air separation plants, which abstract nitrogen and oxygen from air, Osaka Gas said in a statement on Friday.
The industrial gas provider in Binh Duong Province, near Ho Chi Minh City, began manufacturing nitrogen, oxygen and argon, as well as liquefied gas tanks among other businesses in 2012, the statement said.
It has a daily output capacity of 60 tons for nitrogen and oxygen and sells most of its products in Vietnam, in addition to Cambodia. It ranks in the top five makers in the industrial gas sector in Vietnam, Funami said.
The Japanese regional utility group plans to send a director to the board of Sing Industrial Gas Vietnam, he added.
Osaka Gas said Vietnam’s industrial gas market grew 6 percent in the year to March 2019 from a year earlier on demand such as for combustion prevention, food preserving and medical applications, and expects to further expand on the back of the country’s high economic growth, the statement said.
The Japanese energy company has operated downstream businesses for corporate clients in Southeast Asia such as natural gas supply in Thailand, Singapore and Vietnam as well as energy saving solutions services in Indonesia, according to the spokesman in Osaka.
The regional utility is allocating 50 billion yen ($468 million) for investment in the energy business overseas in the current financial year through March 2021, according to the company.