Sheng Rong is principally engaged in the ownership and operations of CNG filling stations and the supply and distribution of CNG in Shandong province, China. It currently operates two compressed natural gas fueling sites with one in Xin He East Road, Dezhou City, and the other in Lao Ling County.
It is in the process of building a third CNG filling station and has obtained permits and approvals to build two more facilities and a mother station. The mother station will be located close to a natural gas pipeline and upon completion, Sheng Rong will be able to supply and distribute CNG to other filling stations.
Lauded as one of the model cities for clean energy usage in China, Dezhou is a pioneering city in terms of vehicle CNG conversion rate and consumption growth. It is estimated that its residents can save as much as 40% of fuel costs by switching or converting to natural gas vehicles.
Based on industry estimates, by end 2013, there will be approximately 130,000 CNG vehicles on Dezhou roads, and with less than 20 CNG filling stations currently available in the city, this makes possible a situation where demand for CNG outstrips supply.
The acquisition allows Innopac to leverage on the existing operations of Sheng Rong to enter the CNG market which has high barriers to entry, especially for foreign investors due to stringent regulations. Sheng Rong will also bring to the Company experience in procuring permits and approvals to build and operate CNG filling stations in Shandong Province.
Source: Innopac Holdings Limited.