Big interest in Petcom
AT least 15 companies have already expressed interest in acquiring the Petroleum Company of Jamaica Limited (Petcom), a highly placed industry source told the Jamaica Observer yesterday.
“It involves all the multinationals operating in Jamaica and some local interests,” the source said, adding that “a formal request for proposal should be going out about the end of this month”.
The matter, the source said, is expected to go before the Cabinet next Monday.
The Government had, at the start of the 2013/14 fiscal year, declared its intention to divest Petcom and appointed an enterprise team to manage the process.
The decision, our source said, was taken after the Government received an unsolicited offer from a major petroleum marketing company in this region.
“It was felt that it was the kind of State asset that would fit within a normal privatisation strategy, so the decision was taken that since there was interest, let’s put it to the market,” the source said.
The company, a wholly owned subsidiary of the Petroleum Corporation of Jamaica, was incorporated in 1973 to market petroleum products, industrial fuels and lubricants. Information from the company said it became active in 1984 with its first sale of solvents, and confirmation of a contract to supply fuel to Caribbean Cement Company.
The company said that in 1986 it started aggressive marketing of its products as it “sought new opportunities for supplying petroleum products and lubricants to the transportation sector, LPG (Liquefied Petroleum Gas) to the domestic and industrial markets, and asphalt, heavy fuel and diesel oils to the industrial sector”.
In 1989, the company opened its first service station in Portmore. Today, it operates 28 stations across the island and provides LPG from 14 filling plants.
In its 2014 annual report, Petcom declared total revenues of $10.6 billion which, it said, was a 3.7 per cent decline on the previous year.
“Revenues were mainly affected by the intensity of the competition within the trade area. In addition, some of our service stations underperformed while others were non-operational during the period,” the company said.
Yesterday, one industry analyst described Petcom as “a good investment” and suggested that any company that was successful in purchasing the business would not regret it.