Malaysian Startup Delivering Affordable LPG Gas Cylinders

Suthan Mookaiah's main reason for starting BeliGas 6 months ago was to get immediate employment in a “pandemic safe” company for B40 Malaysians who had lost their jobs.

At the same time, he could see that his liquefied gas supply business solved several problems that were also directly related to the industry.

The "crazy price fluctuations" and the inferior delivery quality were just two of them. "Gas prices can vary between RM 28 and RM 35 between two neighboring homes for no reason," he told Vulcan Post.

“In addition, most homes have poor fire safety and awareness training on the handling, use and maintenance of gas appliances. Here I saw a great opportunity to use my digital and technical skills to develop innovations, ”he added.

Obtain from the source

Your standard LPG gas cylinder in a Kedai runcit usually goes through several layers of middlemen, hence the high markups that Suthan shared. It starts with the LPG supplier / manufacturer and goes to a premium dealer, then to a dealer, then to a dealer, to a sub-dealer, to a runner and finally to your Kedai runcit that you would be purchasing from .

By working directly with LPG gas suppliers, BeliGas can offer low prices. Your standardized prices for a 14 kg cylinder delivery in 123 service areas in the Klangtal are:

• Pre-order 1 day in advance: RM25.60
• Same day order, standard delivery between 9 a.m. and 6 p.m.: RM 26.60
• Same day order but urgent delivery in 1 hour: RM 29.60
• Same day order but delivery after 8pm: RM38.60

If your delivery requires walking up stairs or using the elevators in apartments or condominiums, there will be an additional charge of RM3.

As far as we can see, BeliGas' offering is cheaper than that of its closest competitor, HaloGas.

With a HaloGas 14kg cylinder, you get 26.50 RM, but without the delivery fee calculated based on your region. On the other hand, pre-ordering from BeliGas costs RM 25.60 without additional shipping costs.

Suthan added that they are optimizing the efficiency of deliveries using technology and logistics efficiency to pass savings on to consumers.

Take matters into your own hands

“Initially we used a third party vendor for the first month, but logistics / delivery was horrible to say. It has created a lot of chain problems in the fulfillment and delivery of services, ”Suthan recalls.

To solve this problem, he made CaPex's costly decision to use his personal savings to build BeliGas' own delivery fleet, hire drivers, and purchase transport vehicles.

One of the BeliGas trucks / Photo credit: BeliGas

This not only solved the delivery problems, but now also lowered the daily Opex costs.

Dictionary time: CapEX means capital expenditure, which is the cost of developing or providing non-consumable parts for the product or system, while Opex is operating expenditure, which is the running costs of running a business.

For a company that began deliveries on July 1, 2020, Suthan was proud to announce that this week (at the time of writing) it had accumulated sales of RM 1,000,000. Today they deliver around 6,000 cylinders per month.

Overall, Suthan is also proud that he achieved his main goal of hiring B40 and other unemployed Malaysians. To date, 40 Malaysians are on BeliGas' payroll and have even hired ex-convicts to work in their hub and HQ warehouse.

"We built the business in the worst of times."

“When everyone cut back on marketing, we decided to use a lot of offline media, which added six-figure costs. We believed in building brands, even in difficult times, ”said Suthan.

They also took advantage of digital media like vlogs and group advertisements that popularized them with local online communities, proving that after earning fans, they made the conversation.

Haters in a business are nothing new, but most of the negative feedback comes mostly from locals living outside of their delivery areas, Suthan reflected.

What was more alarming to the team was how they regularly received threats and blackmail from other players in the business when they went to new areas.

A BeliGas driver on the move / Photo credit: BeliGas

“We just make sure our drivers are well informed on how to handle the situation professionally, get insurance and focus on being customer-centric. And then we will contact you if necessary, ”he said.

BeliGas is expected to roll out in Georgetown, Penang, and Tampoi, Johor, but the lockdowns have delayed their plans a little. Suthan is also aiming for expansion to the east coast and is confident that they can quickly enter the regional market within 1-2 years.

In order to add added value to their services, the SIRIM approved gas regulators from BeliGas will shortly come on the market together with the sale of fire protection kits. You also want to bring out a microinsurance product.

Regarding Suhan's mission to create more jobs for the B40, he intends to create programs for micro-entrepreneurs through partnerships with GLCs or NGOs.

• You can find out more about BeliGas here.
• You can read about other Malaysian startups here.

Selected image source: Suthan Mookaiah, CEO of BeliGas