IN a year when Jamaica's net international reserves were only enough to cover six weeks of imports and many persons were betting against Jamaica's ability to surf the tumultuous waters, a group of five entrepreneurs with a dream for Jamaica opened a marketing company with the aim to increase the profitability of independent gasoline retailers and create a Jamaican-owned brand that patrons would be glad to shop with every time they needed to fill their tanks up.
Lyden "Trevor" Heaven was serving his second term as the president of the Jamaica Gasolene Retailers Association (JGRA), which represents more than 50 per cent of the dealers in the trade. During his presidency there was discussion about improving the financials of the association to the collective benefit of its members. One idea was for the JGRA to own an independent petroleum marketing company which would sell to the independent dealers. However, this idea didn't make it further as planned at the time.
While some were hesitant, Hugh Coore, Trevor Barnes, Junior Williams and Errol McGaw joined Heaven with an investment of $900 to create a company that would generate more benefits to the independent dealers it served and provide superior fuel retail experience to the motoring public. This company was called Future Energy Source Company Limited, or Fesco for short, which was registered in February 2013 and made its first fuel sale in November 2013.
"The genesis of Fesco started out of the house of the JGRA....At the time of the concept of the company a number of us actually owned our own sites. We were seeking to find a better way to be more competitive in the market and to be far more profitable. The idea of Fesco was to be able to have access to the refinery so that we could get product rather than going through a middleman," said Executive Chairman Heaven in an interview with the Jamaica Observer.
With his confidence beaming, Heaven was the first dealer-owned, dealer-operated (DODO) gasoline retailer to switch to the Fesco brand in 2014. His station is based in Mandeville, Manchester. This was at a time when persons still recalled his station had a 25/7 sign (yes, you read that right) which means open 25 hours a day and seven days a week. Two additional dealers joined with the Fesco branding that year.
"I pride myself being the founding chairman and I pride myself being the conceptualiser of this company to have been the first location to receive product from Fesco. I went out there, and I believed so strongly in the brand and what we're trying to do that I faced all the odds as a brave man going this route. I started out by replacing the dispenser at my location with the proud Fesco brand. The most memorable part for me was to see that truck come to my location to deliver the first load from this company. I was there myself to receive the product," Heaven expressed in an exuberant voice.
While the large multinational firms had dozens of analysts, staff members and large offices, Fesco had its head office on 13 Paraiso Avenue, off Hagley Park Road in St Andrew, with only a few persons at the helm. Its first employee was Karen Jones, who Heaven recruited based on her ability and experience with the petroleum trade. She is still with the firm, which has now seen its staff complement surpass 30, with 16 locations across the island up to March 2022.
"When we started out it was a very small and modest office with maybe two rooms. The table we had in there was one I had from a long time that I just moved in, put it down with some chairs, and we had one desk and computer for Karen. We rented a property through the influence of one our directors off Hagley Park Road, and that was the genesis of our company. That's where we started off. Very modest, very simple, very low-cost, and we still try to maintain that position where we generously guard our expenses — especially now that we're a public company. We have a fiduciary duty to our shareholders to ensure that we maximise the returns to them so that dividends can be paid on a timely basis," Heaven explained on the need to remember one's upbringing and vision.
While the firm wasn't without challenges, it was generating $5.94 billion in revenue and earned $104.77 million in net profit for its 2020 financial year. Heaven explained that the company is like a family and that everyone would meet regularly and communicate during the course of the year if there were any challenges.
The hardest test came in February 2020 when his station caught ablaze. However, with the support of the community and friends, the location was reopened a month later just as the novel coronavirus pandemic began to take hold in Jamaica.
Despite all of these events, the company was on a path of growth and was ready to move on to the next level with its decision to go public. Fesco's offer opened on March 24, 2021 and closed on April 1. By April 23 Fesco was the first company to list on the Jamaica Stock Exchange's Junior Market where it raised $240 million, while some owners were able to net $140 million. The company listed at $0.80 and currently trades at $5.83 which represents a more than 625 per cent increase since listing.
"As chairman of the company I have always maintained that our customers come first and are most important for us. I believe if a customer owns a part of the company, that customer will be with us for life; that customer will bring others on board. We always have to believe that, rather than selfishly doing this business, collecting income, and keeping it for ourselves, we inject it in the company and grow the company. What we believe we could do is to certainly share those successes with our major customer base. You can see the results of it. The results of it have been significant as we have grown the brand year on year, quarter on quarter, and our numbers look exceptionally good. The driving force to list on the Junior Market was to allow for broad base participation in the ownership of the company. I'm gratified, we're all gratified ... the fact that we are going out there and were able to capture nearly 5,000 Jamaicans of all demographics is a major endorsement for the brand and the company," Heaven said of the decision to list on the JSE.
The funding supported the company's Beechwood Avenue location (company-owned, company-operated or COCO) which opened in November 2021 and which has become a hot staple amongst Kingston consumers. Apart from being open 24 hours a day, it tends to see its fuel bays full on a Wednesday after Petrojam adjusts its fuel prices. Even the Ferry location owned and operated by Coore experiences high levels of traffic, with these two locations seeing numerous shareholders supporting it as they note the value of saving every time they visit.
"The good thing is that the cumulative volumes from the five locations more than adequately meet the regulations and requirements for access to the refinery. As we started that process we grew and we saw the demand that we could do other things. A number of other independent owner-retailers would have approached us for supplies and so, we saw the benefit that we could serve other such independents," Heaven explained as the company expanded its service offerings.
Fesco has its own proprietary-branded lubricants (FUTROIL), a purified drinking water offering, a partnership with Mr Breakfast and Tastee, plus its future plans to enter the liquified petroleum gas sector in short order. Fesco was able to raise a $1-billion bond in March at 7.5 per cent and be the first company to list a security on the JSE's private market in 2022. Fesco earned $12.67 billion in revenue and $253.64 million in net profit for its 2022 financial year, above its projections listed in its prospectus. A new DODO location was opened in the last two months in Whitehall, St Elizabeth, with plans to add new locations in the coming year(s).
"For me, I'm a patriotic Jamaican. I believe in our country and people. I can appreciate the whole matter of foreign direct investment but it can't be at the expense of the Jamaican entrepreneurial spirit. We have a few more ambitious locations that we wish to build on and feel the look. The expectation of our shareholders, supporters and customers is that Fesco is an exceptional entity, and we intend to maintain that position. I look forward to great things ahead," added Heaven.
When asked what he'd say to other budding entrepreneurs, Heavens said, "Never give up. The challenge may be there to face you but there's always a solution at the end of the day."
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