New Yaadman gas station network - Smith to roll out $1.4b petrol business
Petroleum marketing company Yaadman is expanding into its own brand of service stations after a foray into liquid petroleum gas, LPG. CEO and co-founder of the company Miguel Smith Jr says he wants to set up five service stations across Jamaica.
Smith is investing $1.42 billion in development of the network. The stations are expected to start operating early next year.
Under partnership with Texaco, Yaadman has been selling domestic LPG and automotive fuel from four service stations in Priory, St Ann; Georges Plain, Westmoreland; Knockpatrick, Manchester; and Central Village, St Catherine.
Smith says he is not ending the relationship with Texaco, which is one of the largest petroleum networks operated networks operated by GB Energy, but is looking to grow his own business operations, saying he feels the timing is right.
“No, it is not to say that I’m pulling out of the partnership because the stations and the gas business are still there but I have to go on my own now and take advantage of the fact that I have the backing and the market, and be ready for the expanded business,” he told the Financial Gleaner.
That backing by way of financing will be largely from bankers JMMB, with NCB playing a smaller role, according to Smith.
“JMMB has been with us from the start. They have seen the type of work put down and I am seeing this as their vote of confidence,” he said.
The new service stations are to be located at Bog Walk, St Catherine; the Christian Pen Roundabout, St Catherine; Kingston; Montego Bay and Portland. Smith declined specifics on the locations for latter three, citing competitive reasons.
The Christian Pen location was previously reported on but the exact location was not disclosed at the time.
Full approvals are pending, but Smith says when the more than $800 million project is finished it will be Jamaica’s largest service station, with 12 pump stations drawing from four tanks on a sprawling piece of land, plus a 5,000-square-foot convenience store and additional space for three fast-food franchises. It was slated for completion at the end of the year, but Smith said that has been set back to the first quarter of 2021 when all the other stations are also slated for completion.
All locations will operate under the Yaadman brand, and most are being developed as joint ventures. The partners were not named.
All locations will feature a convenience store and fast food service, according to Smith.
As for the joint venture operations at Bog Walk, Portland and Kingston, Smith says he found it easier to partner with property owners, rather than scout for land for Yaadman to acquire.
“The nature of the joint venture is that they provide the land and the building, and I put in the equipment, and so on. In turn, I will lease it back from them,” Smith said.
The terms of the leases are 15 years, plus five years renewal in the first instance, he said.