South Africa’s largest independent gas distributors
Established in 1974, Sims Gas is a family-run business. Once a one-man operation, the service delivery firm has grown into one of the largest independent gas distributors in South Africa.
Ahmed Patel, managing Director of Sims Gas, says, “It started out as a one-man operation with one vehicle and some gas cylinders, and from there it grew into a fleet with around 20 vehicles, bulk trucks and trucks that carry cylinders.”
The company distributes these cylinders across a network that ranges from the south to the north coast, as well as into Johannesburg. Its aims are to explore the opportunities of the energy business with emphasis on the importance of service in the industry.
Distribution products include petroleum, natural gas, diesel, paraphyl and liquefied petroleum gas (LPG), motor and industrial lubricants, and gas appliances.
The services provided to customers include: the safe filling, handling and distribution of gas cylinders; free drawing, submission and approval of plans as required by the fire department; installation of manifold, regulator, gas cages, signage and pipe work (subject to a five-year supply contract being signed); 24-hour diesel truck stops, offering diesel at wholesale prices, at its depots; and a range of fuels, and motor and industrial oils to suit customers individual needs.
The firm’s main distinction is cylinders with a product that is in demand across South Africa. However, one glaring challenge is getting the product to the consumer as quickly as possible. “It is a major problem because it is conveyed in cylinders,” explains Patel. “We are restricted in what we can sell by the numbers of cylinders we have, which are controlled by the oil companies. So we can only sell as much gas as there are cylinders in the market, and that is the biggest obstacle.
“Turnover volumes will double but we are restricted by that because we don’t have the cylinders to get the gas or the LPG to the market,” he continues. “There is sufficient LPG in the city, but not sufficient for the country. We need a huge investment of capital to purchase cylinders and we don’t have access to that capital. The oil companies are the ones with the capital but they are not investing in cylinders.”
Despite these challenges, one of the firm’s key strengths remains in its delivery service no matter the timeline. “A household may require one canister, or a corporation wants 1,000 canisters, and we deliver that within 24 hours,” says Patel. “We are able to make decisions very quickly and we can identify and resolve customer needs quickly, rather than the corporates who have the same approach to all their customers.”
All these speedy services come down from head office, identifying the products required, any type of installation, or just one cylinder so the branches are fully equipped to handle all claims that come in.
Sims Gas is currently looking at the compressed natural gas (CNG) market. Patel adds: “If you look at emerging markets in India and Pakistan, 80 per cent of all vehicles run on CNG, so we think that is something that would be great in South Africa. But right now, very few if any vehicles have been converted to CNG.”
The firm has 120 employees who all go through rigorous safety and environmental training. Sims Gas is strongly focused on its environmental policy, which is outsourced to experts such as waste-tech services. “In terms of our green agenda, LPG is a natural gas and is one of our marketing tools in moving away from conventional energy sources and more natural energy sources,” says Patel.
Besides a leading edge environmental policy, the organization also has a close relationship with schools in the rural parts of South Africa. “We support them 100 per cent with financial support that helps students with school fees, projects, school infrastructure and computers,” adds Patel.
The personal touch that Sims Gas can add is what separates it from other companies in the industry. “We meet the changing needs of the industry very quickly, and have a very user-friendly website where customers can order online,” says Patel. “Other players in the industry are not there yet. We are very open to the public and people feel very comfortable dealing with us.”