Wednesday 12 August, 2020

RUBiS’ presence in Barbados hangs in the balance

“We are of the view that this acquisition of BNTCL by them would make a competitor that already enjoys a very dominant position an even stronger competitor.

“We believe that this would be detrimental to our competitiveness and our position here in the country.”

This was shared by the CEO of Rubis Eastern Caribbean SRL, Mauricio Nicholls recently.

He did not say that the company will pack up its bags and depart if the result is not favourable, but he did not say they won’t either.

He said:

“It’s pretty much a more general question. This sale of BNTCL to Sol is a very fundamental shift in the business. It is a very, very significant change for us. If we were, for instance, today not yet present in Barbados, but considering coming here, knowing that the infrastructure is owned by a competitor, that would certainly have factored in our decision on whether and how much to invest in Barbados because RUBiS is of the philosophy that we want to control our own destiny in terms of fuel import infrastructure, so when you rely on your competitor you are very, very vulnerable.

“We are in the process of starting a full and detailed strategic review of what this means or what this would mean for RUBiS. We will access all of the options available to us, evaluate and decide. Since we have not done that yet, I cannot anticipate the recommendations. We will go through that process.

“This is a huge, huge change that requires that we take into account all the implications that it has for us, for investments, for future, our presence... All those things will be assessed.”

At present RUBiS’ headquarters for the English-speaking Caribbean is located on island and they are in the process of building their new building in Welches, St. Thomas.

Nicholls told the media that the facility is a “significant investment of over $6 million” and he said that the decision to construct the headquarters here “was a sign that when we made the decision to build that building we viewed Barbados as a permanent headquarters and we had firm intentions to stay here long-term.”

Noting that the FTC is conducting a detailed review of the transaction, RUBiS was fully-compliant and submitted all information required readily, to ensure that the Commission’s decision is "well-informed".

Aware that Sol has an already dominant position in this market, RUBiS called on the FTC to also review the transaction in that context.

Nicholls outlined:

“The sale of BNTCL to Sol puts RUBiS in a very uncomfortable position of relying on  Sol which already has a very dominant position in this market…

“Sol controls almost two-thirds of the retail market so two-thirds of the service stations are owned and controlled by them, two-thirds of the infrastructure that is required to supply jet fuel at the airport is owned by Sol, they have a monopoly of the marine bunkers, so if there is any vessel coming to Barbados seeking to fuel here in Barbados, Sol is the only supplier. We do not participate in that market, so they have a monopoly in that market.”

RELATED STORY: 

RUBiS’ Spring Garden terminal an alternative 

SOL Group takes over BNTCL 

Local economist urges caution on BNTCL sale to SOL Group

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