MASSY Holdings said it is exploring opportunities to expand its gas manufacturing business in Jamaica, with its eyes trained on the export market. The company also committed itself to maintaining a competitive market for liquefied petroleum gas (LPG), which is used chiefly for cooking in Jamaica.

Massy, through its US$141-million acquisition of Industrial Gases Limited (IGL) in 2023, produces LPG as well as industrial and medical gases in Jamaica. It also owns Gas Pro, an LPG business which it acquired from Royal Dutch Shell when that company was exiting Jamaica in 2006. Together, IGL and Gas Pro account for 70 per cent of the Jamaica LPG market. Meanwhile, IGL is the sole manufacturer and distributor of medical gases in the country, and Massy wants to expand the production of these gases.

“We are in businesses that IGL wouldn’t have been involved in, in terms of exports, like carbon dioxide. So there is an opportunity for us to establish a CO2 manufacturing facility here in Jamaica and do some exports,” Gervase Warner, president and CEO of Massy Holdings told the
Jamaica Observer in a recent interview.

“Similarly, with the oxygen, we have a big oxygen export business from Trinidad. Given the geography, the plant here in Jamaica is sized basically to accommodate the Jamaican demand. But it could be scaled, and we have territories and countries that we know have export markets, so we could invest and grow [gas manufacturing in Jamaica] and actually bring foreign exchange to Jamaica to add greater value to the country,” Warner continued. Through IGL, Massy produces oxygen, nitrous oxide, nitrogen, compressed air, and carbon dioxide, which it delivers to hospitals, clinics, and homes.

Warner didn’t outline a time frame for the investments to take place or how much it would cost. However, the company said it is hunting for capital to get some of its investment plans off the ground.

“We need new capital and because of that Jamaica is a good place to look,” James McLetchie, executive vice-president and chief financial officer of Massy Holdings added, indicating that capital could be raised on the Jamaica market, though he didn’t commit to a time frame or amount. Warner, however, added that McLetchie was brought on board to help “structure the right transaction to raise capital”.

Expanding production of carbon dioxide and oxygen apart, Massy said it will also be upgrading the plant.

“There are some parts of the IGL portfolio that were acquired that were not at the same standard that IGL would want it or Massy would want it. So we [are] going to invest in that to make it better. We are going to invest in some of the logistics of where some of these plants are so we don’t have one source…we want to have multiple sources of supply,” McLetchie added in reference to the LPG portfolio in particular.

He added that with a “tightening up of the supply chain”, consumers will be better off for the acquisition, despite the huge stake Massy now holds in the consumer LPG market.

Outlining that Massy has no plans to breach any of the agreements it made with the Fair Trading Commission (FTC), the company pointed out that in less than a year, since it has acquired IGL, “there has been no increase in prices or anything like that”.

Addressing the issue of concerns that were raised about the lessening of competition when Massy first announced its intention to acquire IGL, Warner, who was part of the Massy team that acquired Shell’s LPG business and renamed it Gas Pro, added that consumers have nothing to worry about because the market is more competitive now than it was nearly two decades ago.

“When we made that acquisition in 2006, there were three competitors in the space, there are now 13. So, yes, we have consolidated the market, but we have not made it less competitive. It’s a very competitive market, the LPG market, which is good, and I think from a consumer perspective this consolidation brings real strength in supply, real strength in safety standards, and benefits of better logistics for Jamaica.”

“We are very excited about it. The landscape is sufficiently competitive so that from a consumer perspective there will be no suffering in terms of price, you would have better availability of product and reliability of supply, in particular medical oxygen on which IGL has done a lot to improve their reliability, it’s really enhanced now with Massy as the owner.”

When Massy acquired IGL last year, the FTC, noting that it will “lessen competition”, required Massy to do three things before the deal was approved: “Limit the scope of the non-compete clause; offer access to its LPG storage facilities in Montego Bay to other marketing companies under terms comparable to those under which IGL had accessed the facility; and continue to engage in arrangements for the retrieval and surrender of empty LPG cylinders.”