DCC’s draw to the US propane market

DCC’s global LP gas business operates in eight European countries, and now has established a presence in the United States. Photo courtesy of DCC.

DCC’s initial push into the U.S. propane market represents a “logical business evolution” for the major European player, says a company official overseeing U.S. operations.

Headquartered in Dublin, Ireland, DCC acquired NGL Energy Partners’ retail propane assets extending from Indiana to the West Coast, totaling 42 locations across 10 states and including about 400 employees. The $200 million deal, announced last year and which closed in March, included NGL’s flagship company Hicksgas in Illinois and Indiana, along with Pacer Propane, Propane Central and a number of smaller, local brands.

Shawn Coady’s Hicksgas business in Roberts, Illinois, was a key component when NGL Energy Partners formed in 2010. Now, it will serve as a key piece for another growing company, coming at a time when NGL was looking to monetize some assets and focus instead on its retail propane operations in the northeastern, mid-Atlantic and southeastern United States.

“For a global company like DCC to get into the U.S. market, it needed a scalable operation that had a solid back office to build off of,” says Coady, who now serves as president and managing director of DCC Propane.

Led by managing director Henry Cubbon, DCC’s global LP gas business operates in eight European countries. It recently announced the acquisition of Shell’s LP gas business in Hong Kong and Macau, China, as well as Linde Group’s TEGA business in Germany. Moving into the United States gives DCC a notable presence in a large market tied to the global economy.

“What attracts us to the U.S. propane market is it’s professionally managed; the safety standards are good; and the energy sector is well regulated,” Cubbon says. “It’s a steady business.”

DCC plans to grow its U.S. business, both organically – by investing in new facilities, working closely with customers and developing new propane applications – and through acquisitions.

“We think there is opportunity for some consolidation for the U.S.,” Cubbon says. “We can bring with us some of the same things that we’re doing in Europe, as far as technology. At the same time, we can learn things from the U.S. market. It’s an exchange of learning and best practices.”

DCC’s membership in the World LPG Association gives the company a look at how the rest of the world operates, Cubbon says. For example, consumers in places like Australia and India are using digital tools to order and track their propane deliveries.

“A more seamless approach to serving customers is an important challenge for our industry,” Cubbon says. “We have to keep up. All of the younger generations, the millennials, are using iPhones and expecting good service.”

DCC was one of two international companies to announce expansions into the United States last year. SHV Energy, based in the Netherlands, acquired American Midstream Partners’ propane business, including Pinnacle Propane’s 40 service locations; Pinnacle Propane Express’ cylinder exchange business and related logistic assets; and the Alliant Gas utility system, for $170 million.