Competition Arrives in Grand Cayman, Monopoly No More

The launch of a startup company on Grand Cayman breaks a 60-year propane monopoly on the Caribbean isle. With phase one construction complete, Clean Gas Ltd. received its license to sell from the Utility Regulation and Competition Office in March, one of the final hurdles for pushing a head-to-head rivalry with the British overseas territory’s only other propane provider.

“Cayman is a unique market where a single propane company has enjoyed 60 years of unencumbered bliss by being the only propane marketer in the Cayman Islands,” says operations manager Dayne Brady. “A group of born and raised Caymanian investors has taken on the challenge of trying to reduce the cost of living in Cayman by creating competition in the market, and it is working. Before Clean Gas even sold its first gallon the incumbent dropped its price a dollar a gallon.”

Brady adds that the investor group includes six extremely successful businessmen, among them Marcus Cumber, who serves as managing director of Clean Gas Ltd. And although propane customers are seeing a new and unfamiliar business begin operations on their island, there’s a familiar face at the helm. Brady is the former general manager of the competing company, where he worked from 2005 to 2012.

With full operations ramping up, Clean Gas will soon turn its attention to serving neighboring Cayman Brac and Little Cayman. “Once we have everything set up and working in Grand Cayman we will be answering the call from our sister islands to provide propane for them as well,” Brady says. “This will be a little more complicated, but very doable. We will be using skid-mounted storage systems provided by LPG Ventures (Kearney, Mo.), and we are working on partner agreements for land and staffing.” The company’s first three 30,000-gal. storage tanks at headquarters were also sourced from LPG Ventures.

Clean Gas notes that the relatively high cost of living in the affluent Cayman Islands has always been an issue for residents. In 2015 the investor group decided to contact Brady, a well-known, decades-long veteran of the propane industry. It was during a meeting to discuss the feasibility of opening a new company in Grand Cayman that the idea of Clean Gas Ltd. was conceived and put in motion.

After a lengthy planning period, the Cayman government approved the application. The plan, in addition to providing excellent customer service to residents and businesses, was for customers to realize significant savings through a reduction in monopoly selling prices. With home and business owners able to reduce their energy expenses, more disposable income would thereby be freed to be spent elsewhere in the local economy.

Further, Clean Gas is offering a new option to Cayman. Customers can own their propane tanks. “The lease-to-own your own tanks option from Clean Gas is a cost-effective way to purchase your tank, but you can also buy the tank outright if you desire. Customers will finally be free of having to rent tanks forever. You will have the power to make your own decision and save a bundle on the cost of your propane.”

Speaking to local media last year, Cumber outlined the initiative. “For us, it’s about giving a choice to consumers in the Cayman Islands,” adding that while starting a business in competition with the longstanding sole provider of propane carries some risk, it was a risk he and his partners were willing to take. “We have like-minded Caymanians that see an opportunity in this particular market. We felt that with the growth of [Cayman’s] economy that there was room for a new provider to enter the market.”

He added that although the incumbent will have somewhat of a competitive advantage because of the direct underground pipeline from Jackson Point on South Church Street to its facility on Walkers Road that cuts transportation costs, there is still enough profit margin to supply propane at a lower price. “When we saw Digicel enter the market against Cable & Wireless, telecom prices dropped significantly, and they’re still dropping.”

He noted that the same thing will happen with propane fuel. “You will see that before we even open our doors prices will come down. Clean Gas aims to establish a positive, lasting relationship with our community. Until now, there’s been one provider serving the community. Now, consumers will reap the rewards of being able to choose between the two options in the market.”

Although the Cayman Islands are a British Overseas Territory, like much of the Caribbean they adhere to NFPA 58 and NFPA 54, Brady says. Clean Gas is launching with 90,000 gal. of storage capacity at its facility at Grand Cayman’s Industrial Park. With the completion of phase two construction, there will be 300,000 gal. stored onsite. Product is sourced from the U.S. At press time, with two final inspections pending, the company was operating a soft opening, whereby it was filling and delivering 100-lb cylinders and filling 20-lb, 40-lb, and forklift cylinders at its plant.

The startup company is providing new jobs on Grand Cayman, filled by Caymanians. Personnel include trained and certified technicians and service installers. The company’s dedication to customer service also extends to a 24-hour, island-wide emergency service. “Our phones are manned by live people based here in Cayman,” Brady says. “Our response times are guaranteed to be less than one and a half hours for most, and less than three hours for areas in the eastern districts.”

With its special occupancy permit in hand, Clean Gas was hanging up its shingle at headquarters and preparing full delivery and marketing efforts. “Community involvement is paramount for a company’s success in Cayman, and Clean Gas is a company that is for the people. We listen to their wants and needs,” Brady emphasizes. “This way we can be excellent stewards of our growing family. The permitting and construction process has been long and frustrating, but it goes to show how committed the country oversite is to ensure that we are building a safe and secure facility for the Cayman Islands.”

He adds that “since we are a grass-roots startup there are a lot of growing pains to be endured, but with the benefit of getting it right the first time. Our customers have waited a long time for us, and we are upfront and honest with them about our trials and tribulations trying to get this show rolling.”

Brady details that after Hurricane Ivan, which made landfall during the 2004 season as a Category 5 storm and caused extensive damage in the Caymans, as well as Grenada, Jamaica, and Cuba, risk assessments became much stricter. “We are in the Caribbean, and I can tell you regulatory authorities are tough on marketers,” he says. “They set the bar high for our propane plant, and our plant is designed to the highest degree of safety.”

The Clean Gas facility underwent 68 different inspections involving building control, electrical, and plumbing that ultimately led to the issuance of a certificate of occupancy. Along the way, the company involved firefighters and other first responders, hosting tours and demonstrations of fire-suppression and other redundant safety equipment.

Brady comments that besides the Cayman Islands’ single propane competitor, energy competition comes from electricity and solar. “The Cayman Islands have a lot of affluent residents, and they are not afraid to spend their money on the more expensive alternative energies if we don’t get it right. They demand value for service, and you have to show value. Many people can afford to install an extensive, expensive solar or geothermal package. Our job is to demonstrate that they don’t have to, and they can still save by choosing propane.”

With marketing and full competition about to get underway, he clarifies that the best way to market against competition is to do what you say you’re going to do and provide value for the service you are offering. “It isn’t our goal to be the cheapest supplier of propane, but it is our goal to offer the customer the best value for every dollar spent with us. We want to be the concierge for the customer.”

He adds, “All customers are different, and as such all of our customers are to be treated the best we can by accommodating their needs. Our customers work just like we do, and sometimes they need a bit of extra care because they can’t fit into our schedule. It is our goal to fit into theirs. Take care of the customer and they take care of you.” —John Needham