Massy Jamaica now in growth, acquisition mode
Last year, Massy Jamaica produced better returns for its Trinidad-based parent, even as the group faltered in its home market.
But Jamaica remains near the bottom of the totem pole relative to the size of conglomerate's other major markets and is still contributing less than six per cent of group revenue.
Peter Graham, who was named country manager for Jamaica last October, says he has been given a mandate to grow the Jamaican market significantly. He refused to speak to the targets that he has been tasked to deliver, but said to get there the Jamaican operation would need to acquire new assets.
"We intend to increase by growing existing businesses and wherever an acquisition presents itself - which we are looking for - we will make acquisitions, too," Graham said.
Massy Holdings Limited had a bad year in 2016, having underperformed at both the top and bottom lines, even while its markets in the Eastern Caribbean, Guyana and Jamaica all grew. The drag was mainly in Trinidad and Colombia.
"The mandate - no matter where we are or what we did last year - the mandate is to grow and that is coming straight from the top," said Graham.
At year ending September 2016, Massy Holdings reported annual sales of TT$11.5 billion, and net profit of TT$536 million. Those numbers underperformed 2015 by 3.4 per cent for revenues and nearly 20 per cent for earnings.
Massy's businesses in Jamaica span gas, technology and distribution. Graham says the gas and technology sides of the operation contributed the bulk of the revenue, although he declined to break out the numbers.
"What drove it is that primarily the gases business had a great year and the technology business also had a great year," he said.
Jamaica's overall sales climbed 5.95 per cent from TT$622 million to TT$686 million in 2016. Pretax profit grew at four times that pace, 24 per cent, from TT$50 million to TT$62 million.
Massy Gas Jamaica is a trader in liquefied petroleum gas under the brand name, GasPro. Graham says the growth in the gas business was driven by strong volumes sold to the tourist sector; and that the company was able to make the case for some in the hotel sector to use LPG as a cheaper alternative for 'non-cooking' applications - to fire boilers, produce steam and do laundry.
The non-cooking gas business currently accounts for 20 per cent of the total gas business in Jamaica. Graham intends to continue that pitch to the operators of the 2,000 hotel rooms expected to be commissioned along the north coast this year.
"We believe that the total market, which has remained relatively stable for some years, is ready to grow, because of the additional rooms. In addition we see record numbers of tourist arrivals. That means there is an opportunity for the total market to grow. But inside this total, we see an opportunity to convert some customers from other forms of fuel to LPG for non-cooking purposes," he said.
Still, he also said Massy Jamaica is not banking entirely on organic growth, but is also on the lookout for acquisition targets.
"In an improving macro-economic situation, Massy Gas sees Jamaica as an environment where we will pursue, actively the right acquisition opportunities," the country manager said.
In the meantime, he says Massy Gas is collaborating with communities to drive up business in underserved pockets of the market. This includes business training for small distributors, increasing the company's signage.
"Brand Massy will be a lot more visible," said Graham.
"We really believe that the six per cent of total revenue coming from Jamaica, that number needs to be different."