Jamaica behind Eastern Caribbean in efficiencies - Rubis
Marketing company RuBis Energy Jamaica said Tuesday that it was still willing to discuss terms with individual dealers, even while awaiting the outcome of talks being mediated by Energy Minister Phillip Paulwell.
RuBis said it has a meeting with Paulwell scheduled for today, January 14.
The Jamaica Gasolene Retailers Association appears not to be included. JGRA Secretary/
Manager Carol Riley said that while the group was advised a meeting would be held, no date was finalised. Riley also said president Leonard Green was under the weather.
The energy minister is helping RuBis Energy and the JGRA resolve differences over new terms laid out for dealer stations which include - as outlined by the JGRA - prepayment for products; the requirement of bankers' guarantee for fuel supplies; franchise fees to be paid in US dollar; guarantees to be provided to RuBis for utility bills; and increases of up to 300 per cent in franchise fees.
Raymond Samuels, retail manager for Rubis Jamaica, told Wednesday Business that new contract terms were the next natural step following a rebranding programme across its regional markets, in which the latest to be included were Jamaica, The Bahamas, the Cayman Islands, Barbados and islands in the Eastern Caribbean.
The company operates in 17 markets in the region.
Its Jamaican network includes 53 gas stations - and its local market share is estimated at about 23-25 per cent, according to Samuels.
The new contract terms will facilitate more prudent business practices and "just a part of our overall strategy to really streamline and drive efficiency and improve returns generally for our business," he said.
"If you are trading under a different brand, you have to have a contract which governs the terms of operation of that brand. So, it is normal for us to issue a contract that governs the operations of the brand," said Samuels.
Jamaica is lagging behind the Eastern Caribbean where electronic payments were routine for member dealers, he added.
RuBis is a private French company, founded in 1990, which specialises in the storage, distribution and sale of gasolene, diesel, lubricants, liquefied petroleum gas and chemical products.
The global energy company entered Jamaica at the tail end of 2012 when it acquired the Shell Jamaica assets from Blue Equity LLC.
Jamaica is RuBis' largest Caribbean market, according to the company's website.
The parent company reported flat nine-month revenue of §2.08 billion, at September 2014.
Samuels said the negotiations with the Jamaican dealers are being conducted per individual site, because the businesses have different needs.
"You have dealers with many years of experience, with high levels of business knowledge. You also have dealers who are not as skilled; some have smaller sites. They have different capital structures, so you really have to engage them on an individual basis," he said.
"Each contract is private. You really have to engage them on an individual basis. It is between us and the individual dealer," he stated.
As to the efficiencies that were being sought, he gave as one example the matter of cheque collections.
From time to time, cheques are either misplaced or go missing.
"This is a fast business. You can't delay delivery to a customer because you can't find the cheque. These add to delays in the system. With electronic payments, this is eliminated with funds available right away. Human error is eliminated," he said.
Paulwell stepped in to mediate the talks after a December 19 meeting between RuBis and JGRA failed to resolve their differences.