Posted on Saturday 22 January 2011 byUlster Business
Managing director of firmus energy Mark Prentice is leading the company's push into the Greater Belfast gas market and is confident of building on the success it has enjoyed in ten other towns around Northern Ireland
Managing director of firmus energy Mark Prentice came into the company five and a half years ago with no previous utilities experience.
Prior to joining the company in July 2005, he was Head of Commercial Sales for confectioner Thorntons and before that had spent ten years at the Boots Company in a variety of senior buying, marketing and business development roles.
After eight or nine years working in England after university, Prentice says both he and his wife wanted to come back to Northern Ireland to bring up their two children closer to family.
But while the move from confectionary and toiletries to energy may not have seemed the most obvious one, Prentice says it actually made perfect sense.
"The last couple of years in Boots and certainly in Thorntons were all about setting up new businesses for big parent companies that wanted to get into new markets. What Bord Gais were looking for was someone who wasn't an engineer, but had more of a customer background," he told Ulster Business.
"I have to say I landed on my feet. I had previously worked for companies that were setting up new businesses and developing new customer offers and I found exactly that."
He estimates that less than 50% of firmus' staff previously worked in utilities or fuel companies and that means they are not tarnished with the 'usual utilities mindset'. This has helped firmus to set up a customer focused business.
Prentice initially headed up the gas supplier's sales, marketing and regulatory team, which comprised only himself and a few contractors.
"Whenever I joined Firmus we had eight or nine people. We currently have 72 and we'd be looking to get to 84 by the end of 2011, so it has been a fairly rapid growth," he adds.
Formed in 2005 and owned by Irish energy firm Bord Gáis Eireann, firmus has so far developed a 550km natural gas network in ten key towns across Northern Ireland supplying around 9,000 homes and businesses.
It already supplies around 1,000 business customers in Greater Belfast and this month will see the company ramp up its push into the domestic gas market in the city of Belfast, which until now has been dominated by incumbent supplier Phoenix.
Prentice says firmus has been working with the Utility Regulator over the last few years to write the processes necessary for customers to switch supplier and has handed those over to the market.
"We have 25%-30% of the business market by volume in Belfast. We're aiming for similar targets in the domestic sector," he said. "Our ultimate ambition is to enter the domestic electricity market as well. That's very much the model of our parent company Bord Gais."
He notes that Bord Gais has a 365 day trading function and that firmus has hedged all of its gas for domestic and small businesses customers for next 12 months, making him confident it can stand by its offer to undercut Phoenix for two years for customers who switch.
"Because we have a big parent company in the South which has 700,000 customers, it means we can take advantage of the economies of scale, buying bigger volumes. That's how we believe we can undercut the competition, through our buying power and also the costs of actually administering customer accounts, which we are doing on an island basis."
Phoenix argues that now there is competition in Belfast it should be allowed to compete with firmus in its ten towns, which include the likes of Derry, Ballymena and Coleraine. There is currently a consultation taking place about how and when those towns will be opened. The original idea was that they would be opened on a town by town basis on a particular date a certain number of years after the first connection, meaning that, for example, Ballymena would open one year and Coleraine the next.
That was deemed to be potentially confusing for customers and the current proposal from the regulator is that the markets open on two dates: at the end of 2012 for industrial and commercial customers, and then in 2015 for domestic customers. Prentice says that will mean firmus' markets will open a lot earlier than the market in greater Belfast did.
"It is a little bit disingenuous but I understand why Phoenix would be asking that. At the same time we have a very new, immature market in the ten towns. Towns like Craigavon have only had gas for three years, so we are only really getting to the stage where we have connected up the large customers.
"We're five years in to what is a 30 year development programme for us, as opposed to the 15 or 16 years that Phoenix have been developing their network in Belfast. We've asked for enough time to get customers on and get them converted before we open up the market."
And he is confident that firmus' pricing in the ten towns is competitive, particularly as natural gas is about 15% cheaper than oil.
"For domestic customers in the ten towns the price of gas over the last four years has been nearly 15% cheaper than in Belfast. So from a customer point of view they are currently getting the cheapest gas price in Northern Ireland and gas prices in Northern Ireland are the cheapest in the UK, so our customers are getting a good deal."