LPG Bottling Plant

KSIDC

PROJECT PROFILE
ON

LPG BOTTLING PLANT

Prepared by:

Kerala State Industrial Development Corporation

LPG Bottling Plant

KSIDC

PROJECT PROFILE FOR LPG BOTTLING PLANT

INTRODUCTION
The project profile is on setting up of a Liquefied Petroleum Gas (LPG) Bottling plant
for domestic use as cooking fuel.
LPG is a mixture of commercial butane and commercial propane having saturated
and unsaturated hydrocarbons. LPG is gaseous at normal atmospheric pressure, but may be
condensed to the liquid state at normal temperature, by the application of moderate
pressures. Although they are normally used as gases, they are stored and transported as
liquids under pressure for convenience and ease of handling. Liquid LPG evaporates to
produce about 250 times volume of gas. Thus, a large quantity of energy can be packed,
stored, transported and used in small containers.
Most commonly, LPG cylinders are available in compact 5 kg cylinders for rural, hilly
and inaccessible areas and 12 kg as well 14.2 kg cylinders for domestic use. For commercial
and industrial use, 19 kg and 47.5 kgs cylinders are available.
MARKET
The Indian LPG scenario presents a gap between demand & supply. The major utility
of LPG is a cooking fuel. It is approximated that LPG is being used by around 20 % of the
households in India. In urban areas, LPG is the common fuel, used by around 50 % of the
households as fuel for cooking. The market penetration of LPG is 45 %. While the urban
market penetration is 88 %, the rural penetration is only 19.6 %.
It is estimated that around 204400 MT of LPG is required in the State of Kerala for
domestic purposes alone. Kerala has around 568000 customers for LPG in the domestic
category.
MANUFACTURING PROCESS
LPG is received in Bullet trucks and transferred to a storage vessel. The LPG stored in
the vessel is pressurized to about 7 kg/sq.cm. The LPG pressure is boosted to about 12-13
kg/sq.cm and sent to filling shed through pipe lines using an LPG Pump.
The cylinders are washed with multiple forced jet of water to remove mud, dirt,
stains, etc., from the outer surfaces. Subsequently the cylinders coming out of washing unit
are dried by blowing the air on the sides and top surfaces of the cylinders as they move.
Measured quantity of LPG is filled into cylinders at the filling shed under pneumatic control.
The Purging Unit which is on-line equipment creates a vacuum in the first stage and fills
LPG vapour in the second stage in new / hot repaired empty cylinders. Aluminium seal
crimping unit/Hot air sealing unit crimps the aluminium cap seal around the cylinder valve

LPG Bottling Plant

KSIDC

as a final operation on the filled LPG cylinder. Auto cap fixer fixes safety caps on to the valve
of LPG cylinders.
Filled cylinders are subjected to 100 % weight check, presence and effectiveness of O
ring inside cylinder valve and checks for leak and bung leak. Tamper proof seals are fixed on
the valves of sound cylinders. These cylinders are loaded to stake trucks and dispatched to
various markets. Cylinder movement inside the Plant is achieved using chain conveyors
driven by electrical motors through worm gear reducers/planetary gear reducers.
PROJECT PARAMETERS

Capacity
The installed capacity of the plant is 1200 MT/Annum. It is assumed that on an
average 285 cylinders of 14.2 kg are to be produced every day, which translates into 1200
MT/Annum.

Land
It is proposed that the project may be set up in 4 acres of land

Laocation
The project is proposed to be located KSIDCs Industrial Growth Centre at Pallippuram,
Cherthala, Alappuzha District.

Raw Material & Utilities

The major raw material for the plant is LPG which will be transported in trucks to the
plant, maintaining safety standards. The source of LPG will be from manufacturers like IOC,
HPCL etc.

Plant & Machinery

LPG Storage Tank

Decanting Pumps & Transfer pumps

LPG Compressor

Pipes with structural steel support

Ball Valve

Decanting House

Cylinder Valve Testing Unit

Purging Gun

Fire fighting system

Water sprinkler systems

LPG Bottling Plant

KSIDC

Cylinder dip testing machine

Bottling machine
Evacuation system
Hot air crimping unit
Cold repairing unit with cylinder valve opening
Cylinder check scale
Chain conveyor system
Pressure differential valve
Pop action relief
Air regulator cum filter
Bleeder valve cum filter
Non return valve
Strainer

Manpower
The unit may require approximately 50 staff inclusive of managerial staff and
production staff. There may be 3 managerial staff and around 50 production staff

Cost of the Project

The total investment required for setting up of an LPG bottling plant is envisaged as
Rs 350 lakhs. The detailed break up is provided belowItem
Land
Building & Civil Works
Plt & M/c
Furniture,
fittings&interior
Misc.Fixed
Assets
including vehicles
Utilities
Deposits
Preliminary&pre-oprative
exp
Interest
during
Construction
Contingency
Margin Money for WC

Cost
45
75
155
25
30
20

LPG Bottling Plant

Others
TOTAL

KSIDC

350

Means of Finance
The means of finance for the project is as followsEquity
Secured Loan
Unsecured Loan

Rs 175lakhs
Rs 125 lakhs
Rs 50 lakhs

Sales Turnover
The optimum capacity utilization is at 85 %. The total income at optimum capacity
utilization of 85 % is Rs 272,734, 00. The total income is inclusive of Sale of LPG cylinder and
income from deposits on new connections. It is approximated that per kg of LPG is sold at
Rs 26.67. Income from every new connection is Rs 70; it is estimated that there will be 1000
new connections every year.
FINANCIAL INDICATORS
Profit After Tax is 737,757,5
Break Even Point (BEP) is in the 6th year of operation at 85 % capacity utilization.
Debt Service Coverage Ratio (DSCR) is 3.28
Debt Equity Ratio (DER) is 1.1
Internal Rate of Return (IRR) is 11 % taking into account cash flow for 10 years
CONCLUSION
LPG addresses aspects like quality, costs, efficiency, environment, heat controllability
making it a suitable fuel choice for domestic and industrial applications. LPG also finds
many other applications such as fuel for vehicles , refrigerant, chemical feed stock , in
running turbines to produce electrical energy and in Centralized heating solutions for
domestic and industrial applications

Disclaimer:

The findings contained in this Project Profile are based on the initial information collated through primary and secondary
research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name,

LPG Bottling Plant

KSIDC

trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by
KSIDC or any entities thereof.