On January 20, Saisan, a major seller of LP gas and industrial gas, signed a contract with the Sojitz Group to acquire 51% of the stock of its subsidiary, the Vietnamese LP gas company Sopet Gas (capitalized at 4.99 million dollar). By acquiring the controlling interest in the company Saisan has completed the third stage of its move into the Asian market, following its move into China and Mongolia.

Besides in Saitama Prefecture where it has a strong foundation, the company has been following an aggressive M&A strategy, so that its group is now composed of over 20 companies. Even overseas, in 2008 it established a joint venture in Shandong Province with local capital putting up 51% of the capital. At the end of 2010 it acquired 60% of the stock of Uni Gas, a seller of LP gas in Ulan Bator, Mongolia. The energy situation in Asian countries, especially the business for energy for home use, is such that electric power and city gas are in need of large scale investment to create the required infrastructure as it cannot really be said that this infrastructure is yet in place. Indeed, there is plenty of room left over for the spread in use of LP gas which is distributed energy. The World LP Gas Association (WLPGA), of which Saisan is a member, is actively engaged in assisting emerging and developing nations in expanding their use of LP gas. Saisan has been trying hard to find a way to move into the Asian region.

Vietnam in particular maintains a 7-8% growth rate. It has a population of about 87 million, most of which is under 30, making it a “young country,” with a population certain to grow. There is no city gas in the areas around Ho Chi Min City, the major city in the south. Homes use a mix of kerosene and LP gas for fuel. The use of firewood and kerosene for fuel in very tiny kitchens can be harmful to the health of mothers and their children. The government is therefore intent on spreading the use of LP gas.

In view of all of this, for quite some time now Saisan has been looking into ways of moving into Vietnam. In June of last year, it began serious negotiations regarding investment in Sopet Gas, of which Sojitz, and the Sojitz Group affiliate SOPEC of Singapore, and own 60% of the shares and the state owned company Dong Thap Petroleum Trading, the remaining 40%. Over a period of about 6 months Saisan and the Sojitz Group reached agreement that Saisan would acquire 51% of the shares owned by the Sojitz Group, leading to the signing of the current contract.

Sopet Gas is headquartered in the Nhung Trach region of Dong Nai Province. Converted into yen, sales for 2010 amounted to about just over 3.2 billion yen, with sales of 3.5-3.6 billion yen anticipated for 2011. There are 38 employees, including 3 Japanese. It has an office in Ho Chi Min City, and in Dong Nai Province it has an import center with two 800 ton circular tanks, and three 100 ton storage tanks. It has one cylinder filling facility and one scale for measuring the weight of trucks. The amount handled in 2010 came to just over 50,000 tons.

As of April 1 Saisan will change the name of the company to Vietnam Sopet Gas One and begin full scale management of the company. For the time being it will concentrate on the LP gas business, and will work toward changing over the fuel used in Ho chi Min City and the surround area. Just by virtue of the fact that Vietnam anticipated growth of the industrial and medical gas areas, the strategy of the company to deal with these will indeed become an object of attention.