copyright © iwatani corporation. all rights reserved.lpg is mainly used for households, restaurants...

Copyright © Iwatani Corporation. All rights reserved.

（Aug. 2018）


What is LPG①

LPG is an energy source used by approx. 40％ of Japanese households

Iwatani’s LPG Brand “Marui Gas” Character “Mappy”

Propane & Butane

LPG Varieties:

Propane Ｃ3Ｈ8 Primarily residential/commercial

Butane Ｃ4Ｈ10 Primarily industrial/automotive

Good Portability

Liquefied Vaporized

Easily liquefied by pressure and cooling; in volume to 1/250

High Calorie

ＬＰガス都市ガス

24,000 kcal/m3

11,000 kcal/m3

LPG City Gas

Total CO2 emissions from production to combustion

Clean

0.89 1.00

1.28

0.85

ＬＰガス石油石炭都市ガス

(Petroleum=1.00)

LPG Oil Coal City gas

(Source: Japan LP Gas Association)

1


LPG supply is resilient for disaster.

Unavailable supply cased in each infrastructure in the three devastated prefectures

1) Quick recovery by individual service

2) Available supply to shelter and temporary housing

( Source: METI, 2012)

LPG restored : April 21,2011

City Gas restored : May 3, 2011

Electric Power restored : June 18,2011

Electric Power

LPG

City Gas

What is LPG②

Million households

March April May June

2


LPG is mainly used for households, restaurants and factories.

Domestic demand is decreasing because of the spread of energy-saving products

For Back-up for thermal power stations

City gas is comprised mainly of methane. LPG is used to increase its calorific value.

Taxis and Trailers in Japan use LPG as fuel. Especially Butane is used.

Main component is propane. The gas is supplied to households and restaurants from cylinders.

To heat ferrous and nonferrous metal To dry various material and foods

As raw material in chemical products such as propylene and ethylene.

Use of LPG

Residential/Commercial

Industrial

Automotive

City gas

Chemical feed

Electric power

3


LPG (household)

47%

LPG (Industrial)

8%

LPG (Oversea)

12%

Petroleum-related 10%

Gas equipment,

etc. 23%

Energy Division (Overview)

Energy Division

Net sales

317.4

billion yen （FY 2017）

Energy equipment

Solar power Ene-Farm

Cartridge Gas products

Drinking water delivery

“Fuji no Yusui” water

Net sales component ratio

Cassette gas canister

Portable gas cooking stove

Petroleum-related

・LNG ・Kerosin ・Gasoline

LPG

Import LPG～ Home delivery

4


(*1) Source: Japan L.P. Gas Sales Association (2017)

City gas*2

30.25m

All electric*3

6.54m

LPG *1

24.56m FY2016

(*3) Source: FUJI KEIZAI CO., LTD. (2017)

LPG Business Overview①

(*2) Source: Agency for Natural Resources and Energy (2017)

(*4) Source: Ministry of Economy, Trade and Industry (METI) (2014)

LPG used by 40% of households 《Japan LPG Consumption Household Ratio》

(*4) (*4)

《World LPG Consumption Household Ratio》

U.K. Germany Other

LPG household customers

24.56

million

Nationwide retailers

Iwatani customers

3,200

3.10 million

Non-Marui Distributors ‘ Group

1,800

subsidiary distributors

20

1,400

Marui distributors’ Group

Direct sales

customers

900,000

*As of March 31, 2018

Iwatani as No. 1 in LPG

LPG LPG

City gas City gas

《Iwatani LPG Sales》 (UNIT：households)

18,516

Iwatani customers (retailers)

Iwatani customers

(household customers)

95% of Japan by area is covered by LPG supply

5

Retail Wholesale

Industry Rank

1st／18,516 1st／1,100

Share ３.7％ 12.6

％

Marui Gas household customers

900K 3,100K


(Source: METI, “Retailers and Safety Agencies in Japan,” 2018)

21,518 21,052 20,600 20,062

19,514 19,024

18,516

'11 '12 '13 '14 '15 '16 '17

50.4%

22.5%

10.0%

9.7%

4.0% 3.4%

1～300

301～600

601～1000

1001～2500

2501～4999

Over 5000

《LPG Industry Structure in Japan》

(1,100)

(18,516)

Wholesalers

Primary Distributors

Retailers

《Retailer Trends》

(6 ) Import

Refinery

LPG

Transport

Transport

Necessary distribution rationalization at retail part

《Household LPG Cost Structure》

（Unit: Companies)

(Source: Agency for Natural Resources and Energy)

《Distribution of Retailer Customers》

(Source: LP Gas Center “FY2017 Petroleum Products Supply and Demand Optimization Survey: Oil Gas Distributor/Retailer Business Conditions Survey Report”)

1-300

301-600

73% have 600 or fewer

Year-end

(UNIT：households)

Wholesalers ・transportation ・safety management ・meters checking ・labor cost etc.

Primary distributors

Retailers

（Unit: Companies)

Costly

13%

17%

70%

LPG Business Overview②

6


Increase Direct Customers

35

55 60

66 70 72 74 75 76 78 80 81 83 86 88 90

'00.3 '04.3'05.3'06.3'07.3'08.3'09.3'10.3'11.3'12.3'13.3'14.3'15.316.3 17.3 18.3

<Direct Distributors’ Customer Trends>

Household

/Commercial

Wholesale

/Industrial

・Strengthen profitability through retail rationalization centering on M&A

Primary Distributors

Integrated Structure from Primary Distribution to retail

Nationwide platform Logistics

Safety management

Sales network

Expand Wholesale Business

・Developing customers base through brand power and high safety levels

General Assembly of the organization for Marui Gas supply chain shops

Import terminal / Primary terminal

４ sites

Secondary

terminal

３ sites

Cylinder Filling station

104 sites

<Iwatani LPG Procurement/Supply System>

Gas-Producing Countries

(Unit: 10,000s)

LPG Business Strategy

7

http://icooon-mono.com/12007-%E5%AE%B6%E3%81%AE%E7%B7%9A%E7%94%BB%E3%82%A4%E3%83%A9%E3%82%B9%E3%83%88/


0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

（$/ｔ）

LPG import price (CP)

FY 2017 : Ave. $482/t

FY 2016： Ave. $360/t

FY 2015： Ave. $388/t

LPG (Propane)Import price (CP)

<CP movement> (CP: Contract Price)

・Saudi Aramco new price system (CP system) has been applied since October 1994.

・Tends to rise in winter-demand season.

(Fiscal year)

8


Legal stock period: 40 days

３ months

Rising Price Sell inexpensive stock at high price

Profit Rises

Falling Price

Profit Falls

②From LPG import to sale takes

3 months Premise

Impact of LPG Import Price

Oil-producing country

Iwatani LPG import terminal End user

Sell expensive stock at low price

*The actual impact on performance varies depending on inventory volume, sales timing (season), sales volume and other factors.

Cost

Selling price

(3 months)

Cost

Selling price

(3 months)

①Wholesale price is based

on LPG Import Price

Wholesale Price LPG Import Price※

※ The price consists of “CP” (from the middle east) and

“MB” (from the U.S).

∝

Short-term impact of market fluctuations (If LPG import price fluctuations return to the original level, the impact is ±0.)*

LPG Import Price Fluctuations

LPG import price

LPG import price

9

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