Propane, a liquefied petroleum (LP) gas, has been an essential source of energy for over a century. What separates propane from other energy sources like gasoline, diesel, and electricity, are its portable convenience, efficiency, safety, affordability, abundance, and its reduced risks of spills and soil contamination. But perhaps more importantly, propane itself is not a greenhouse gas and, if accidentally released into the atmosphere before being burned, will not affect it – an important consideration when considering environmental impacts.
Paraco Gas, a family-owned and operated propane company was established by Pat Armentano in a garage in Mount Vernon, New York in 1968. At the time, the company known as Patsems Incorporated specialized in welding supplies and was an industrial gas supplier.
Over fifty years later, Paraco Gas, with its home base in Rye Brook, Westchester County, New York, has become a name synonymous with leadership in the propane gas industry. The company is one of the country’s top propane retailers serving the commercial, residential and wholesale markets in eight states.
The company has twenty-seven distribution centers, over 120,000 customers, and approximately 500 employees who provide propane services for home heating, hot water, cooking, motor fuel, propane cylinder exchange and more. “The diversification allows us to bring in steady revenue throughout the year,” says Paraco’s Executive Vice President and third-generation family member Christina Armentano.
The company’s success can be attributed, in part, to its numerous acquisitions. There have been fifty to date, the first being Peekskill, New York’s Paraco Fuel Corporation in 1979. This purchase was significant as it enabled the company to expand its product range, as Paraco entered the propane industry for the first time.
“We want to focus on our core business to allow us to service our customers at the highest levels,” Armentano says. “Paraco has a strong pulse on energy trends and customer needs.” The company’s main attention is on the northeast market, servicing eight states – New Jersey, New York, Connecticut, Massachusetts, Pennsylvania, Vermont, New Hampshire, and Rhode Island – with New York being, “our largest and, in certain areas, most concentrated market. However, there are plans to continue to expand in all states we service.”
Armentano is seeing energy trends in customers’ requests. “It depends on geographic areas and the needs of the customer base. We have seen a trend in customers looking for an execution of alternative energy sources such as propane,” she explains.
“Where we are consistently seeing an interest and a real need for propane is in areas that are unable to get those natural gas energy sources. They’re looking for a reliable clean source that can help them as a home solution,” she adds.
Vice President of Supply Chain Arthur Ravo explains that in the company’s home base of Westchester County, ConEdison is the natural gas provider but, “They currently have a moratorium on any new natural gas installations or expansions,” he says. “The infrastructure for natural gas is limited, where propane is very portable.”
According to Armentano, residential heating gallons make up less than twenty-five percent of Paraco’s overall business. “Many propane companies don’t have the mix of business segments that we have. So, their residential heating gallons are a much higher percentage,” Ravo adds.
When growing its business, Paraco Gas seeks people who have the attributes and talents that would best fit its culture. The company wants people who are seeking not only a job, but a career. “We believe that employees are our most important asset and believe in hiring smart, talented employees who are looking for a long-term career,” says Armentano. “We believe in promoting from within whenever possible, and therefore, spend time with each employee understanding their desired career path and how we can help them get there.”
The company provides ongoing employee training to enhance knowledge and skills built on a cultural foundation of “collaboration, hard work and work-life balance.” The company’s wellness committee, in which many employees participate, was established “by our leadership team in partnership with the human resources department, to focus on the health and well-being of our employees,” says Armentano.
The committee gives employees the ability “to have a positive impact on the culture overall,” says Armentano, and employees are granted “the ability to take on a leadership role within the committee and to showcase areas they are passionate about.”
“We still very much have the entrepreneurial foundation on which the business was created,” Armentano says, reflecting on the company’s more than fifty-year history. “We have a group of really smart, hard-working, dedicated individuals who have worked incredibly hard to foster a culture of transparency.” The well-established entrepreneurial spirit “creates an environment for fostering new and creative ideas that may be outside our typical norm, to continue to offer best in class service to our customer base.”
Paraco Gas uses a number of tools to monitor performance in customer service, such as “real-time monitoring of our customer interactions to make sure all of our representatives are available to answer each and every call that comes in, within an acceptable amount of time. We believe in one-call-resolution and leaving our customers with a great experience with each interaction.”
The company also employs a quality assurance program that listens to and grades calls. This aids managers in providing “constructive feedback in areas of need and offer suggestions for how to handle the various situations that come up,” explains Armentano. She notes that off-phone training is provided to representatives to “introduce any new promotions or products, as well as to continuously work on understanding the process, and of course, soft skills and problem-solving skills.”
Paraco Gas has a rigorous training program that employees receive at the time of hire and “at regular refresher intervals through their career.” Safety training involves operating commercial vehicles safely, installing propane containers and interior piping according to compliance codes, and performing safety surveys and leak checks, “to safely and efficiently supply our customers with green, clean, highly-efficient fuel. Paraco’s commitment to safety is paramount to how we operate on a daily basis.”
In addition, the company has a history of training emergency response teams within their service communities and, at times, is called to communities that are not part of its service area for its expertise in emergency situations.
“We’re not only on top of what the local code changes might be, but we’re training [response teams] in propane safety, specifically, including doing demonstrations and holding classes so that [employees] get more comfortable working around propane safely,” says Ravo. He adds that at the Waterbury, Connecticut plant, for example, the head of production, “set up a pretty detailed evacuation model, and it’s practiced each month there.”
“The traditions of Paraco Gas have been built around quality customer service, and that begins with safety, front and center for every employee, customer, and community we service,” Armentano adds.
The company has a new state-of-the-art cylinder refurbishing center, its first, in Waterbury, Connecticut. Ravo explains that propane tanks are coming in, “from all of our service centers now, and we can take outside work in if it makes sense for both parties.” The refurbished products are refilled by an automated process and then shipped out to the same centers.
“We have been in the grill cylinder exchange business since 1998, and until this plant opened, [service centers] were outsourcing a majority of our refurbishing work,” says Armentano. “By bringing the cylinder exchange operations in-house, we were able to decrease overall costs and have direct control on the quality of the final product. This plant will keep us competitive with an increasingly crowded market and allow us to offer a higher quality product and service to our customers.”
Paraco Gas faces at least 150 competitors, with oil companies now beginning to expand into the propane arena. So the company has to be diligent and proactive in its plans to move forward.
“As industry leaders, we have a strong understanding of the players within our space,” Armentano says, explaining that acquisitions have been a vital strategic plan for the company since the first acquisition in 1979. “With any acquisition, we try to find a win-win relationship with the buyer. As a family-owned and operated business, we have the benefit of understanding what is important to small privately held business. We have also partnered with the largest companies that have multiple locations, they may have an underperforming operation they are looking to sell off that may fit well in our geographic footprint.”
Paraco Gas will be growing organically and through acquisitions over the next few years. Armentano says, “Our goal is to continue to be the largest privately-owned propane company in the northeast. We plan to continue to successfully leveraging technology to improve operational efficiency and provide excellent customer service to both our residential and commercial customers.”
The propane industry is a rapidly evolving market. Some of the growth in demand will, “come from developing countries that are transitioning from fossil fuels and coal to propane,” says Armentano. “Propane throughout the world is displacing burning of coal, wood, and cow dung in some developing countries. The United States is now a net exporter of propane because of the shale gas finds and the shale revolution,” Ravo adds.
Armentano notes that the ConEdison suspension of natural gas installations could present a challenge. “We will, I believe, see an increased consumption of propane within those areas because of propane being a portable reliable fuel.” She suggests that those once relying on natural gas will no longer be able to because of capacity issues.
“We strive to continue to have a family culture for our employees and be a ‘local’ trusted brand for our customers,” says Armentano. “We believe that we are currently fulfilling both, but we know that our leadership team has to work on this every day.”