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LPG supplier AFI fails

Holden LPG: A gas tank provided to Holden by AFI subsidiary, APA.

Holden and Ford brace as AFI goes into receivership and is put up for sale

General News logo11 Apr 2011

A LEADING supplier of LPG equipment to both Ford and Holden in Australia has been placed in the hands of receivers.

The shock news comes just three months after the company – Alternative Fuel Innovations Pty Ltd – was awarded a $3.54 million grant under the government’s Green Car Innovation Fund to develop an innovative LPG liquid injection system that works with both petrol and diesel engines.

It is not known how much the federal government has already paid AFI, but industry minister Kim Carr’s office is understood to be working closely with the receivers and remains committed to paying future installments provided performance milestones are met.

Despite AFI’s financial woes and uncertain future, both Holden and Ford say that for the moment at least it is business as usual in terms of LPG fuel tank supplies from the Victorian company.

AFI is contracted to supply LPG cylinders for Ford’s forthcoming EcoLPi Falcon due for release mid-year. The Falcon will use a liquid injection system developed by rival company Orbital rather than AFI, but with tanks from AFI subsidiary APA Manufacturing Pty Ltd.

80 center imageLeft: AFI's workshop. Below: Ford Falcon EcoLPI.

The same company also supplies tanks to Holden for its dual-fuel LPG Commodores.

GM Holden director of external communications Emily Perry said Holden was continuing to work with AFI on an unspecified future product program, presumably involving its locally manufactured Commodore or Cruze.

GoAuto understands Holden is set to introduce a new dedicated LPG Commodore using APA tanks this year, but was also working with AFI on a longer term project, possibly involving the liquid direct-injection technology supported by the government green car grant.

Holden’s current dual-fuel Commodore liquid-to-gas delivery system is provided by IMPCO-BRC but with an AFI storage tank, while Holden Special Vehicles employs an all-Orbital liquid injection system on its vehicles.

The businesses of both AFI and APA – which itself was rescued from voluntary administration by AFI back in 2003 – are now being prepared for sale.

Keith Crawford and Johan Vorster, of McGrathNicol, were appointed as receivers and managers on March 24 and have more recently advertised for expressions of interest for the businesses and assets.

“Our objective is to work constructively with stakeholders to stabilise and prepare the business for sale,” said Mr Crawford.

“In the meantime AFI and APA will continue trading and we look forward to continued support from employees, customers and suppliers.”

McGrathNicol has undertaken a number of Australia’s largest and most complex corporate recovery engagements, notably ABC Learning and HIH Insurance.

AFI, which also bought two other large LPG equipment suppliers in the past three years, has been developing its Liquajet LPG injection technology at its Rowville headquarters in Melbourne’s south-east.

As reported by GoAuto in January, AFI claims its new technology can be applied to the latest lean-burn direct-injection petrol engines now coming onto the market in Europe, with liquid LPG Autogas delivered via the petrol injectors directly into the combustion chambers.

In diesels, the Liquajet system can reportedly substitute up to 50 per cent of the diesel fuel with LPG – which costs half as much as diesel per litre – for reduced exhaust emissions, more torque, less engine wear and large cost savings at both the pump and service garage.

While Orbital’s liquid injection system employs overseas technology and components, AFI claims its system was the first to be developed wholly in Australia.

The company had hoped it would open export markets in Europe and the United States, in many cases with companies that currently manufacture and export traditional gaseous LPG delivery systems to Australia.

The first step towards market for Liquajet was to have been the launch in Australia this year of an aftermarket multi-point port liquid injection system developed for at least 15 Australian cars. Of course, the future of this program is now in the hands of the receiver.

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