Who is K-Gas

In 2019, Kaidan started K-Gas LPG Delivery. Using his formula of "Honesty, Reliability and Local".

K-Gas has positioned itself as a small business with old fashion values, born with a desire to bring customer service and class leading technology with a heavy focus on CRM  into the LPG market. 

The business model is disruptive and proven successful in the SW of Victoria and the next phase of growth is to scale the operation state wide.  

The Opportunity

We are seeking expressions of interest from parties for the part/full sale of an LPG Gas terminal and distribution company based in South West Victoria.

A change in circumstances for the working partner presents an opportunity to purchase his shareholding (40%) with the current partner (non working) remaining in place, or open to a complete sale or an investor looking for a unique profitable start up with huge upside and potential to scale.

LPG Gas is the lifeblood of energy in rural areas where mains gas is not available and the sector continues to enjoy growth with the unreliability of the electricity network and the cost effectiveness of gas.

The ground work has been done, with the business experiencing 100% growth this financial year off 40% year on year growth since commencement in 2019.

The business is based on a 1/2 acre industrial site in Colac, with rental being 12K per year for the land (yes you read that correctly) and the company owing all fixtures.

All of the improvements that are on the land have been designed to be moved should the need arise, and include a 50,000L underground LPG tank, cylinder filling facility, modern office, large workshop and loading docks with extensive landscaping making it aesthetically pleasing as well as highly functional.

The business currently services 2,000 clients with one full time manager and two part time drivers.

The opportunity to grow the business is huge as Colac is ideally placed from a distribution standpoint. The business is yet to move into the bulk LPG space, with plans for a distribution point in Warrnambool and Ballarat in the pipeline.

An attractive supply agreement direct with the refinery is in place and will form part of the sale of the business, with gas enjoying exceptional margins due to the lack of competition in the marketplace.

The business has been able to disrupt the market through a mixture of innovative technology and a focus on customer service and localised presence. Most orders are placed online with no retail sales taking place from the terminal yard, only deliveries.

With the CRM program being cloud based, it allows the manager/owner huge flexibility from a work standpoint as they are not required on site to manage retail customers.

The current employees are exceptional, experienced and are the reason behind the business growth and customer satisfaction.

The opportunity that exists is,

1: The current Manager/Equity partner has had a change in his life and as a result needs to move interstate and is offering his 40% share of the business for sale. Ideally the person who purchases this would be a hands on operator to drive the business as Kaidan has done so successfully. This person would need to have a an entrepreneurial brain and thirst for work as he/she would be responsible for driving the next period of growth.

2: Purchase the entire business including the 60% share held by a private investor.

It is very rare that a business like this is offered for sale, with the starting entry point and the closed shop nature of LPG making it almost impossible for new entrants into the market.

Currently 80% of the propane market in Australia is controlled by two major players, resulting in high margins at the retail end and a customer service void created by a lack of competition.

We have disrupted the market targeting the 5 reasons that create dissatisfaction amongst LPG users. They are also key areas that we know our opposition will not commit to or match, thus creating a very different offer that is based around service delivery and innovation rather than price.

Market research undertaken by Objective Management in 2020 on our behalf delivered the following results,

80% of customers where extremely dissatisfied with the online offering of their incumbent supplier.
90% of respondents would change supplier if they were provided with free cylinder rental.
Of customers where extremely dissatisfied with the customer service of their incumbent supplier "75% of respondents had little to no trust in their current supplier in the key areas of pricing, on-time delivery and customer service."

The key planks that we have focussed on are,

Delivery Guarantee

There is nothing worse than being promised delivery and it's either late or does not come at all. So if K-Gas don't deliver when we say we will, your next delivery is free - that's the K Gas delivery Guarantee. Our CRM program allows customers to track in real time their delivery with a text message prior to delivery and at completion of delivery sent to the client,. 

Pricing Commitment

K Gas will only ever increase pricing of LPG as a result of an increase in our wholesale price. We will always communicate this to our customer. Likewise if our price comes down, we commit to passing this on.

Rent Free

Our model incorporates the cylinder costs into our retail price, and removing the rental component.

Fee Free LPG

Our commitment is transparency in pricing, and a no fee policy. You just pay for the gas. 

Colac Facility

K-Gas is a turn key operation that has the ability to be run as an owner manager, investor or existing operator. The Colac facility has the ability to service the entire South West and North West of Victoria. 

A recently completed cylinder filling facility located in the 24 Hour industrial zone positioned in Colac East. The plant currently has two filling hoses, electronic scales and two loading bays with storage on deck for 300 cylinders.  Extensive landscaping, state of the art offices and all fire services and emergency procedures in place and to code.

The ground work has been done, with huge growth opportunities in bulk LPG, wholesale and new retail areas yet to be explored.

The low running costs and below market rent (12K Per Year - yes) makes this a hugely appealing opportunity. 

K Gas owns all of the improvements on the land, and all of these have been built with possible relocation later on down the track. In saying that, the facility has the ability to increase output 30 fold before any consideration for relocation would be considered.

The original business plan for K-Gas had the company profitable in year 5 of operation, we have achieved that a year early with sales growth tracking well above our original forecasts.

The Upside

Investing in a start-up that is now profitable, a proven track record with a scalable business model and plan.