Regency Petroleum Limited (RPL) has set a target to increase sales of its bulk liquefied petroleum gas (LPG) by 50 per cent in the coming year as it builds out a distribution partnership in Kingston, St Andrew and St Catherine while it searches for new partners in north-eastern parishes.

The revelation was made by RPL Chief Executive Officer Andrew Williams during a press briefing on Monday at the Jamaica Pegasus hotel in New Kingston which occasioned the announcement of a partnership with Portmore, St Catherine-based JusGas Distributors. The agreement between the two companies will see JusGas Distributors being the exclusive supplier of RPL-branded bulk LPG to the Corporate Area — Kingston, St Andrew – and sections of St Catherine.

Bulk LPG refers to quantities of cooking gas above the retail volumes of 25 lbs, 30 lbs and 100 lbs. The product is used mainly in commercial kitchens operated by restaurants and bakeries.

“We are excited, as this will certainly grow Regency’s revenues. I don’t want to state figures, but we are targeting a 50 per cent increase in revenues of bulk LPG,” Williams disclosed.

Additionally, the CEO said that the Westmoreland-based RPL will be going after a greater market share in the bulk LPG segment. While acknowledging that the company has a minor share of the bulk LPG market, Williams explained that RPL has projected a gradual increase in market penetration over the short term.

“So for the next quarter, we are looking to increase our market share for the Kingston market to about 10 per cent and then for the second quarter we will move up to about 25 or 30 per cent,” he said, adding, “We have the capacity and the assets.”

At present the bulk LPG market is dominated by Massy Gas Products and Industrial Gases Limited (IGL). However, back in March Massy Gas Products announced that it had entered into an agreement to acquire IGL.

RPL generates revenues from three business segments: automotive petroleum, retail LPG, and bulk LPG. The company operates a service station in the Paradise Pen area of Westmoreland.

Since listing on the Jamaica Stock Exchange’s Junior Market on December 15, 2022, the company has begun work on the construction of two new service stations in Westmoreland and another on Spanish Town Road in the Corporate Area.

Group business development manager at the Jamaica Stock Exchange Andre Gooden pointed out that the partnership is a fulfilment of RPL’s commitment in its prospectus to grow its LPG business.

In the meantime, RPL Executive Vice-President Amanda Williams shared on Monday that the company’s “alliance” with JusGas Distributors “is testament to our shared vision and commitment to meeting the burgeoning demand for bulk cooking gas in Jamaica’s Corporate Area.

“It marks a significant step in our journey, promising to bring about an era of growth and innovation,” she continued.

Both RPL and JusGas Distributors have been engaged in business over the past year with the latter supplying the Corporate Area with retail gas on behalf of the former. In this regard, RPL CEO Andrew Williams said the new partnership with JusGas follows a period of due diligence to ensure that the Portmore-based company had the capacity and would make the investment in assets to distribute at the bulk gas level.

“Based on the passion displayed by the company and based on the investment [made] by this particular Jamaican company (JusGas), we wanted to reward them. We have been supplying them with bulk fuel over the past year and they have grown significantly with our support,” the elder Williams stated.

In response to the praises from the RPL CEO, JusGas Sales & Marketing Executive Naesha Atkinson said the distributor is looking forward to growing with its partner.

“We have many partners in our industry, but with RPL we are able to currently provide several of our customers that depend on us for bulk LPG…This kind of partnership that we have forged now will put us in a position to reach even more commercial customers as we grow together,” she said.

That growth also involves expanding the JusGas’ distribution to the north coast, which RPL has set its sights on. While Williams told the Jamaica Observer that the company does not have a set timeline to increase distribution of bulk LPG to the north coast and the eastern end of Jamaica, Atkinson pointed that her company is working on developing its capacity to deliver those areas.

Williams, however, said that RPL is looking out for other companies on the North Coast and in St Thomas and Portland with the assets and investment capacity to make contact. Those companies will have to meet the same due diligence standards as JusGas Distributors, he added.

RPL unaudited financial statements for the January to March 2023 quarter indicated that sales reached $183.48 million, or 21 per cent more than the $152.16 million earned in the entire financial year of 2022.

“This was driven by increased volumes sold for our LPG and gasoline products as consumers became more familiar with the RPL brand as we aim to maximise our full potential with our current capacity. Gross profit increased by 15 per cent to $32.50 million, but gross margins decreased from 18.62 per cent to 17.71 per cent. This decrease can be attributed to increased trucking costs to deliver fuel to our locations,” the directors stated.