Sol Jamaica to launch start-up LPG business, buy gas station network
Undeterred by its initial rejection, Sol Petroleum Jamaica Limited plans to enter the cooking gas and service station business as early as this year.
The energy company's first known effort to invest in a gas station network was rejected when its bid for Petcom failed to excite the State, but general manager Robert Jackson said Sol is now pursuing other business leads and expects to enter the gas station business via acquisition and the cooking gas business via a start-up venture.
"We are in discussions to get into other parts of the petroleum business, and service stations is one of them. There is no secret that we are trying to get into that business," Jackson said in an interview at his Kingston office.
Sol's current business operations in Jamaica, manned by a staff of 24, include the distribution of motor vehicle engine oils under the Shell brand, and more recently bunkering activities to refuel ships in the Kingston Harbour.
The company unsuccessfully tried in 2015 to acquire state-owned Petroleum Company of Jamaica, which operates a national chain of gas stations under the Petcom brand along with a cooking gas filling plant and distribution network under the Cookie brand. Instead, divestment agent, the Development Bank of Jamaica, chose to sell to Phoenix, which bid US$22 million for the business.
Since then, Sol has been in talks with other prospective sellers.
"We recognise that there is still an opportunity, and we are going to get in one way or the other," said Jackson. "It's a matter of us picking what makes sense to us."
The move by the local operation would align it more with its Barbados-based parent, Sol Petroleum, which operates some 400 Shell service stations and more than 60 Sol stations across 23 markets in the Caribbean.
"I am expecting that we would get into that business sometime this year," said Jackson.
"We were anticipating though that we would have been in the business already, but when we looked around, it wasn't as clear cut as we thought it was."
Any network it acquires would be rebranded as Sol, he added.
Sol says it holds a 20 per cent share of the 14 million-litre lubricants market in Jamaica. Some 56 lubricant brands are distributed locally. The LPG market in Jamaica has fewer players, including GasPro, IGL and Petcom.
"We were hoping that acquiring Petcom would have given us that LPG distribution network, but just to say that, based on my investigation, there is another way - an innovative way - to get in, which I do not want to reveal now because I do not want my competitors to [know]," said Jackson. However, he did say it would be a start-up business.
"We are looking at entering the entire Jamaica and looking at the domestic market and also the industrial market. We see opportunities there," he said.
Sol Jamaica operates with a staff complement of 24.