Regency Petroleum Sets Sights on a Whopping 50% Surge in Bulk LPG Profits

Jamaica: Andrew Williams, CEO of Regency Petroleum Limited (RPL), announced on Monday at the Jamaica Pegasus hotel in New Kingston, that his company aims to boost its bulk liquefied petroleum gas (LPG) sales by 50% in the upcoming year. This ambitious goal is part of RPL's strategy to expand their distribution partnership in Kingston, St Andrew and St Catherine, while also actively seeking new partners in the north-eastern parishes.

The event also marked the unveiling of a collaboration with JusGas Distributors, a business based in Portmore, St Catherine. According to the terms of this partnership, JusGas Distributors will exclusively supply RPL-branded bulk LPG to the Corporate Area — encompassing Kingston, St Andrew – and certain parts of St Catherine.

Bulk LPG denotes quantities of cooking gas that exceed the retail volumes of 25 lbs, 30 lbs, and 100 lbs. This product is primarily used in commercial kitchens run by restaurants and bakeries. This development is thrilling for us as it has a strong potential to boost Regency's earnings. While can’t disclose specific numbers, our aim is to achieve a revenue surge of 50% in bulk LPG, revealed Williams.

Moreover, the CEO stated that RPL, based in Westmoreland, will be pursuing a larger market stake in the bulk LPG sector. Williams conceded that the company currently holds a minor share in this market but emphasized that RPL projects a steady rise in market infiltration soon. In the upcoming quarter, our aim is to escalate market presence in Kingston to approximately 10 per cent. Subsequently, in the second quarter, we plan to boost this number up to around 25 or 30 per cent, emphasizing that we have sufficient resources and capacity.

Currently, the bulk LPG market is primarily controlled by Massy Gas Products and Industrial Gases Limited (IGL). Nevertheless, in March, Massy Gas Products declared that they had agreed to purchase IGL. RPL's revenue streams are divided into three business sectors: automotive petroleum, retail LPG, and bulk LPG. The company manages a service station located in the Paradise Pen region of Westmoreland.

The firm has commenced the construction of two more service stations in Westmoreland, along with an additional one on Spanish Town Road in the Corporate Area. Andre Gooden, group business development manager at the Jamaica Stock Exchange, emphasized that the cooperation is a fulfilment of RPL's promise to increase its LPG business in its prospectus.

The company's "alliance" with JusGas Distributors, according to RPL Executive Vice-President Amanda Williams, is "a testament to our shared vision and commitment to meeting the burgeoning demand for bulk cooking gas in Jamaica's Corporate Area. It is a crucial turning point in our path and promises to usher in a period of expansion and innovation.

Over the previous year, RPL and JusGas Distributors have both been active in business, with the latter delivering retail gas to the Corporate Area on behalf of the former. In this regard, RPL CEO Andrew Williams said the new relationship with JusGas was the result of a period of due investigation to make sure the Portmore-based business had the capacity and would invest in assets to distribute gas in bulk.

The company has been providing them with bulk fuel for the past year, and they have expanded tremendously with our backing. JusGas Sales & Marketing Executive Naesha Atkinson said the distributor is looking forward to growing with its partner in response to the RPL CEO's compliments.

Even though we work with numerous partners in our sector, RPL allows us to now provide several of clients who rely on us for bulk LPG. As we develop together, this kind of collaboration that have established now will enable us to reach even more commercial customers.

To achieve that growth, RPL has set its sights on extending the JusGas' distribution to the north shore. While Atkinson noted that her organization is working on building its capability to deliver those areas, Williams stated to the Jamaica Observer that the company does not have a clear schedule to boost distribution of bulk LPG to the north coast and eastern end of Jamaica.

Williams, on the other hand, claimed that RPL is on the lookout for additional businesses on the North Coast, in St. Thomas, and in Portland with the resources and the ability to get in touch. The same due diligence requirements as JusGas Distributors will apply to those businesses.

According to RPL's unaudited financial accounts for the January to March 2023 quarter, revenues totaled $183.48 million, which is 21% more than the total of $152.16 million for the entire fiscal year of 2022.

To maximize our potential with our current capacity, we sold more of our LPG and gasoline products as consumers grew more familiar with the RPL brand. Although the gross profit rose by 15% to $32.50 million, the gross margins fell from 18.62% to 17.71%. The directors said that this decline can be linked to rising trucking expenses to deliver fuel to locations.