DE RAJ GROUP AG De Raj Group AG: De Raj Group concludes agreement with Ecogaz to build liquid gas filling facility near Moscow - Three more factories are planned in Russia - Goal: Market leader

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02/09/2019 08:59

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De Raj Group AG: De Raj Group concludes agreement with Ecogaz to build liquid gas filling facility near Moscow - Three more factories are planned in Russia - Goal: Market leader

02.09.2019 / 08:59
The issuer is solely responsible for the content of this announcement.

De Raj Group concludes agreement with Ecogaz to build liquid gas filling facility near Moscow
Three more factories are planned in Russia
Goal: Market leader

Frankfurt, Germany (02.09.2019) - De Raj Group (ISIN: DE000A2GSWR1, Vienna Stock Exchange) together with Ecogaz have signed an Agreement recently on the construction of the largest high-tech and fully automated station in Russia for the production of the full range of gas cartridges, as well as for filling all types of liquefied gas cylinders under the brand name RUGASCO. The project will comply with the most advanced technological achievements of the industry in the world with blockchain processes used in management and accounting. Under the deal structuring, De Raj acquires a controlling stake in the Holding Company that owns Ecogaz.

The planned annual production capacity of the newly created enterprise will be up to 10 million gas cartridges and filling up to 1.5 million gas cylinders, with an expected revenue of more than $15 million with a margin of about 25%. With a launch of a project, RUGASCO plans to take at least 2% of the market in the European part of Russia. At the same time, the Agreement reached involves the construction in Russia in the next 5 years by revolving reinvestment from the revenues of the first project, of new 3 similar gas filling stations, thereby increasing the number of refueling cylinders annually to 6 million units and with sales up to 200 million liters of liquefied natural gas per annum, take a market share of at least 10% and receive a total income/profit of at least $20 million with the simultaneous capitalization of assets in the form of 4 modern manufacturing enterprises in the amount of more than $30 million.

The first joint project will be located on a land of up to 50,000 m2 in 30 km from Moscow, and will consist of:
- administrative building;
- production workshops with gas filling lines*;
- warehouse pavilions for separate storage of empty and refilled cylinders;
- a fleet of more than 20 gas trucks and delivery vans;
- underground gas storage, with a one-time storage volume of 1 million liters of gas.
*Production lines of German or other European production using extreme automation and all modern achievements of environmental friendliness, efficiency, pass-through accounting, as well as remote control and process control.

The existing experience and the business model laid down in the project will make it possible to easily integrate all future new enterprises and processes under a single management into the existing model. The enterprise will be involved in managing, technical and service staff of 45 people. The management company, with its head office, will be located in Moscow with staff of 18 people.

The next three factories will be built near the largest cities of Russia - St. Petersburg, Kazan and Yekaterinburg. The joint company plans its business expansion outside of Russia - in Europe and Asia.

High diversification of sales processes for various categories of consumers, together with their own sales model and logistics developments, are aimed at supplying products to:
- population for household consumption;
- warehouse complexes for transport purposes;
- HoReCa enterprises for the needs of hotels, cafes and restaurants.

The project received support from the Government of the Moscow Region and the largest gas companies in Russia owing to its high standards of quality, environmental friendliness and labor safety, and aims to become a market leader, consolidating the liquefied gas retail industry.

The potential of the liquefied gas retail market in the European part of Russia, taking into account its formation and development, is estimated at more than 90 million cylinders per year with a cash flow of $2 billion.

The RUGASCO project plans to consolidate 30% of the accessible market by 2030.

Vaidyanathan Nateshan (CEO, De Raj Group AG):
"We are excited to work with Emil, who has the reputation of being a successful innovator and visionary entrepreneur. His knowledge and innovation capabilities, complemented with our international experience, will be an asset to the De Raj management team. This transaction is consistent with De Raj Group's philosophy to invest in strategic Emerging Markets."

Emil Arzangulyan (Founder and CEO, Ecogaz):
"This is good news for the Russian liquefied natural gas market, and we are very pleased that we will implement the RUGASCO project in a team with such a technological and experienced partner as the De Raj Group AG, with whom we have close estimates for the future of the international liquefied natural gas market."

About Partners
The De Raj Group AG (www.thederajgroup.com) The Group was founded in 2011 by Mr. Nagendran C Nadarajah. Nagendran Nadarajah has earned a Master's degree of Business Administration in Finance from University of London and has a broad experience of over 40 years in the oil & gas industry, commerce and educational institutions, mostly in the United Kingdom and Malaysia and is very familiar with intellectual property (IP) development and protection. He has held patents for some early oil & gas products and was instrumental in the listing of Perisai Petroleum in 2004. The De Raj Group (DRG) is committed to promote project finance as one of its core business with dedicated and experienced team on the ground to support their clients on a global basis. DRG's projects are structured around the ownership, service delivery and intellectual property surrounding the assets held by it.

Vaidyanathan Nateshan is a versatile and seasoned leader with 18 years of business, strategy, finance, product and sales leadership across industries. His leadership roles span a wide range of industries including Oil & Gas, Power, Infrastructure, Information Technology, Healthcare, Pharmaceuticals & Business Process Consulting, giving him significant insights into the respective industries as well as exposure into the perspective of Capital Markets, Private Equity Investor and Venture Capitalists.

Ecogaz Oil & Gas Co. (www.ecogaz.com) was founded in 2009 by design engineer Emil Arzangulyan. He is engaged in the implementation of engineering projects, the construction of infrastructural gas facilities, local gas storages, trading in liquefied gas with logistics on gas carriers of its own design. The company is a leading operator in the Moscow gas cylinder market. Ecogaz has direct contracts with the largest oil and gas companies in Russia, including one of the largest in the world - Gazprom.

Emil Arzangulyan is one of the key specialists in the manufacturing industry of liquefied, industrial gases and their logistics. He is regularly invited as an expert, speaker at major gas conferences.

02.09.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: De Raj Group AG
Robert-Perthel-Str. 79
50739 Cologne
Phone: +49 221 95 93 70 26
Fax: +49 221 95 93 70 27
E-mail: ir@thederajgroup.com
Internet: www.thederajgroup.com
Indices: WBI Wiener Börse Index
Listed: Regulated Unofficial Market in Frankfurt; Vienna Stock Exchange (Official Market)
EQS News ID: 866715

End of News DGAP News Service

866715  02.09.2019