Hexagon Ragasco

Moving into the digital age

Hexagon Ragasco is the leading manufacturer of composite liquefied petroleum gas (LPG) cylinders, used mainly for leisure, household and industrial applications. As a pioneer in the industry, Hexagon Ragasco has sold more than 19 million cylinders worldwide over the last two decades, including 1.3 million in 2020.

Workforce (FTEs)
124
Facilities
Norway
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Product areas

Ikoner BA Ragasco

In 2020, Hexagon Ragasco focused on developing the next generation LPG smart cylinder that communicates with both users and LPG distributors.

Operating results

Hexagon Ragasco generated revenues of NOK 550 (601) million and EBITDA of NOK 100 (92) million in 2020. Revenues and margins were unfavorably impacted by lower demand from Asia as well as market development costs. Read more in the Board of Directors’ report.

Key developments and important events in 2020

  • Reached 19 million cylinders sold worldwide
  • Expanded into new markets: Argentina, Djibouti and Georgia

Objectives achieved in 2020

  • Leveraged new technologies to launch ground-breaking smart LPG composite cylinder
  • Improved the recycling properties of LPG composite cylinders. Entered partnership in Europe for recycling the composite vessels cylinders.
  • Achieved continued recurring sales growth

Objectives for 2021-2022

  • On-board pilots for the new smart LPG composite cylinder
  • Prepare for scale up in 2022
  • Explore business opportunities in other segments
  • Achieve continued recurring sales growth
  • Increase sales and capacity utilization for the second half of the year

Market

Hexagon Ragasco’s customers are primarily leading LPG distributors and marketers, located in over 90 countries. These customers manage large quantities of cylinders through their own exchange operations or through dealers. Hexagon Ragasco has focused on developing the value proposition for LPG distributors and marketers. The composite LPG cylinders’ unique features enable distributors and marketers to increase market share and improve their competitive position. Furthermore, there are significant benefits related to safety and opportunities in reducing maintenance and logistics costs.

The first half of the year is traditionally strong, driven by recurring European leisure customers, while the second half of the year is seasonally slower in Europe. Meanwhile the company keeps growing its position in the Asia Pacific region, Latin America and the Middle East, generating recurring revenues and balancing the seasonal impacts.

Europe

Deliveries to Europe were strong in 2020. Leisure segments were favorably impacted by COVID 19.

The most important markets are European domestic and leisure customers, and these are mostly characterized by increased seasonal demand and sales volumes in the first half of the year. However, in France, Italy and Portugal bottled LPG is typically used year-round for cooking and heating.

Markets outside Europe

Hexagon Ragasco has maintained focus on several of the markets outside Europe, to secure growth and improve capacity utilization in the seasonally slower second half of year.

Asia Pacific

Bangladesh is expected to be a growing market in the region for LPG, especially bottled LPG for domestic use, and the company has established a strong position in the market. The COVID-19 pandemic had a significant impact on the ability to trade with Bangladesh in 2020, resulting in lower sales volumes compared to 2019. 2021 volumes are expected to come back to more substantial levels.

Middle East and Africa

The region continues to invest in lightweight composite cylinders, making domestic use of LPG more user-friendly and safer. The company has received several smaller repeat orders from the Middle East and Africa during the year.

North America

During 2020, Hexagon Ragasco focused on selected segments of the North American market, specifically businesses specializing in the hospitality and forklift truck industries.

Latin America

The region invests in lightweight composite cylinders, making domestic use of LPG more user-friendly and safer. Hexagon Ragasco has received both repeat and introductory orders from customers in the region during the year. The composite cylinders were introduced to Argentina in 2020.

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Competitive position

Currently, Type 1 steel cylinders dominate markets outside of Europe due to price. Although they are cheaper, steel products are heavier and susceptible to corrosion. This affects the safety and useful life of the steel cylinders.

Hexagon's composite LPG cylinder are resistant to BLEVE (Boiling Liquid Expanding Vapor Explosion) when engulfed in fire. Hexagon Ragasco’s lightweight cylinders are less costly to transport, and the translucency and superior design make the composite LPG cylinders easier to monitor and use. The company’s cylinders can withstand a burst pressure that is twice as high as their steel counterparts. The superior user-friendliness and safety features are key competitive advantages. In addition, our composite cylinders have a life-time expectancy of at least twenty years.

In 2020, Hexagon Ragasco solidified its position as the leading global supplier of composite LPG cylinders. The company's position was strengthened relative to both steel and other composite cylinder alternatives. There are other composite cylinder alternatives in most markets and the company expects that competition will gradually increase over time.

“Making the cylinder talk”

In 2020, Hexagon Ragasco developed a groundbreaking, smart, composite LPG cylinder. The cylinder is based on battery-less sensors powered by energy harvesting technology, collecting data via IoT sensors and transmitting data to consumers’ phones and a central cloud database.

The new smart cylinder is expected to transform the value chain and increase Hexagon Ragasco’s competitive edge. It will also improve total cost of ownership and hence competitiveness with Type 1 steel cylinders.

Outlook

The outlook for composite LPG cylinders remains solid. In established markets, Hexagon Ragasco is acquiring market share from steel cylinders.

Hexagon Ragasco will focus on onboarding pilots with the smart composite LPG cylinder, with a continued launch and scale-up in 2022. Hexagon Ragasco is positioned to become the global leader in smart connected LPG cylinders.

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