OPERATIONS
ULTRAGAZ
Ultragaz is the leading distributor of liquid petroleum
gas (LPG) in the Brazilian domestic market, with a
24% market share. It operates in the South, Southeast,
Central West and Northeast of the Country, catering
to all market segments - residential, commercial and
industrial. Founded in 1937, the company was the first
LPG distributor in Brazil. When Ultragaz began operations,
it had a fleet of three trucks and 166 customers. Today,
Ultragaz delivers LPG to an estimated 10.5 million
households.
Ultragaz believes that it has certain competitive
advantages in the current business environment. These
advantages include (i) strong brand name recognition,
associated with quality, safety and efficiency; (ii)
market concentration in the principal Brazilian population
centers thus boosting economies of scale in distribution
logistics and resulting in cost efficiencies; (iii)
detailed knowledge of the Brazilian market, in part
based on Ultragaz’s involvement at all levels
of LPG distribution to its clients; and (iv) a highly
efficient distribution network.
DISTRIBUTION AND MARKETING
Ultragaz’ operations are divided into bottled
gas sales (mainly in 13 kg cylinders) and bulk sales.
The company operates in the two segments with different
distribution strategies, in such a way as to make
the most of the opportunities in each market and
maximize customer loyalty.
Distribution in the bottled LPG segment includes
direct home delivery and retail stores, both carried
out by the company or its dealership network. In
this segment, which principally serves the residential
consumer, there has been a constant improvement in
the products and services offered, as well as an
increase in the level of interaction with consumers,
either through sales carried out through the Internet
(ClickUltragaz), by telephone (DiskUltragaz), through
its own distribution outlets or via independent dealers.
The company operates in this market with two brand
names: Brasilgás (very strong in the Northeast
of Brazil) and Ultragaz (in Brazil’s other
regions). The Company maintains 16 gas cylinder filling
plants, which provides support for the three forms
of distribution: the home delivery of gas cylinders;
direct sales through its own sales outlets or through
its chain of exclusive independent dealers.
For the bulk segment, distribution is largely carried
out through storage tanks installed on its clients.
Since 1994, Ultragaz has been investing in small/medium
size bulk delivery facilities and in bob-tail trucks,
known as UltraSystem, which deliver LPG in bulk to
commercial clients. Ultragaz’s clients in the
commercial sector include shopping centers, hotels,
residential buildings, restaurants, laundries and
hospitals. Ultragaz’s trucks supply client’s
stationary tanks using a system that is quick, safe
and cost effective.
See diagram that outlines the LPG distribution process
from the refinery to the ending consumer.
LPG MARKET
LPG market is comprised of 14 distributor companies,
where the 4 largest hold approximately 90% of the
market share. Ultragaz’s main competitors
are Petrobras, which recently acquired AgipLiquigás,
Butano, and SHV Gás, from SHV Group (formed
by the merge of Supergasbrás and Minasgás).
During the last years, Ultragaz has been increasing
its market share due to its geographic expansion
and its distribution system to the commercial segment.
QUALITY
Ultragaz was the first company in Brazil to assume
responsibility for the safety of its cylinders and
defend self-regulation of the gas distribution sector.
And it is also the only LPG distributor in Brazil
that carries ISO (International Standards Organization),
certification for the excellent standard of its quality
management. All its plants carry ISO 9001 certification,
and in 2003 the following plants were recertified
with the 2000 version: Campinas do Pirajá (BA),
Caucaia (CE), Pouso Alegre (MG), São José dos
Campos and Santos (SP).
For more information on Ultragaz, access
our 20F
