Less than a year after entering the liquid petroleum gas (LPG) market locally, FESGAS, the cooking gas arm of FESCO, said it has made significant strides in the space even as it remains on the hunt to capture a greater portion of market share.

Guarded in his disclosure on the actual number for this growth, managing director of FESCO Jeremy Barnes said that in light of what currently exists in the very competitive local LPG market, management is very pleased with the performance of the segment, which has to date kept up to planned targets.

“Everything has been going as expected and we are happy with the strong performance we’ve seen so far as well as the market share we have been able to garner. We can’t really comment on our exact share right now but we are really grateful that people are appreciating and buying the product. In the domestic [household] cylinder market, which uses mainly the 25, 30 or 100 pounds cylinder, we have made significant inroads there and we continue to remain on target with our projections,” he said in an interview with the Jamaica Observer this week.

FESCO, which primarily operated as a petroleum products supplier and operator of service stations, officially entered the cooking gas market in April 2023 after acquiring the business of Wilson Beck LPG which it rebranded FESGAS. As one of the latest entrant in the highly competitive market, it started out with market shares of little over two and a half per cent in a market with an estimated value of about $25 billion.

The local market, now controlled by Massy Gas Products through its IGL and GasPro brands, is said to now command some 70-80 per cent of current sales. Other players in the space includes Petcom, Yaadman and Regency Petroleum.

Barnes, in underscoring the efforts of his company to remain competitive in the cooking gas market, said that capital expenditure (capex) remains intensive and ongoing as it looks to further grow FESGAS’ current customer base in the coming years. This, as it take steps to improve brand awareness through increased advertisement and also as it expands capacity to add more cylinders, plants and storage.

During the third quarter ended December, the company’s advertising expenses went up almost $30 million to total $43 million as it ramped up brand awareness around the FESGAS product. Over the same period it was also able to acquire, integrate and commission its second LPG filling plant facility in Naggo Head, Portmore, St Catherine.

“We do have plans to add other filling plants across the country but we can’t speak to these until they are finalised. We have so far spent in excess of $2 billion and our capex in this capital intensive area is continuing,” Barnes told the Business Observer.

The managing director further speaking to growth in other areas of FESCO’s business said its recent designation as an authorised distributor of Castrol motor oils for Jamaica will further increase the company’s reach in the petrol market.

At the end of the nine-month period, revenues for the petroleum marketing and distribution company grew to $21.3 billion accompanied by profit of $465.9 million — 6 and 7 per cent, respectively, above the same period in 2022. Now at $1.7 billion in shareholders’ equity, FESCO is also now looking to surpass the $2-billion mark by the end of its current financial year.

“The company will continue to make investments in real assets and equipment to support expanding its service station businesses and network, its industrial client base, and LPG business,” the directors said in the report to shareholders.

Bullish on plans to continue the build-out of its network service stations, FESCO, after recently receiving approval for its proposed ‘FESCO OVAL’ service station on Spanish Town Road in St Andrew, is expecting completion of this outlet by the second quarter of the 2025 financial year. The addition of this company owned and company operated (COCO) entity will increase its stations to little over 20 islandwide.

“This facility will be futuristic and will embody much of the characteristics that FESCO believes we are and also what the public expects from us in terms of quality and innovation. It will carry all the fuels available within our line, it will feature a convenience store, ATM, a quick service restaurant with drive-thru facilities and some community amenities including a six-a-side football field and homework centre,” Barnes noted.

“We continue to experience growth in the short term, we have made a lot of plans for the medium-term growth with the FESCO OVAL, LPG gas and with Castrol. However, in the long term we continue to develop projects from an active pipeline, more of which we expect to bring to market soon,” he said.