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Smaller is better

Masagana Gas is setting a new industry standard for the local cooking-gas market.
By Cathie Carpio |

If you don’t want to spend more than you need for liquefied petroleum gas (LPG), then Masagana Gas Corp.’s mini tanks, which come in 7 kg and 9 kg variants, might be the best for you. Because he saw that not all customers need 11-kg LPG tanks for their homes, Masagana’s CEO, Richard Yao, is setting a new industry standard for the local cooking-gas market.

 

Thanks to his solid industry exposure, Yao was able to identify an untapped market of consumers who have been forced to buy regular-sized LPG tanks despite living alone or having a small household.

 

“We make sure that we are very current in terms of being able to address the needs of our consumers,” Yao tells Entrepreneur Philippines. “What consumers want is the affordability of cooking gas, which is not addressed by the current LPG tanks we have. Most of the tanks we have are for big households, that’s why we have to develop tanks that we can sell piecemeal.”

 

As of end-July, the price of an 11-kg LPG tank in Metro Manila ranged from P575 to P705, according to the Department of Energy’s Oil Price Monitor. A 7-kg Masagana tank at the current average price of P58 per liter of LPG would thus cost only P405—a significant difference for families on a budget.

 

Masagana’s commitment to provide smaller LPG tanks, however, means paying higher operational expenses. “We need to invest more on our tanks and have stringent quality checks to ensure the safety of our consumers, as there are a lot of substandard tanks in the market,” he explains. To build a stronger monitoring system, Masagana Gas invested on tank seals with laser-printed serial numbers, which allows the company to tell exactly where its tanks went—either to a distributor or to a household.

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With Masagana’s exclusive products, Yao also plans to expand the business through franchising. “Nobody could just copy our products because it is IPO (Intellectual Property Office)-registered,” he says. “We plan to open a lot of stores through franchising and we plan to tie up with LPG refilling stations.” Thinking small isn’t a bad idea after all.

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