He may be just 60, but Patrick Mercer plans to make his retirement from the helm of Flogas Ireland a full-time job. He faces some resistance: when Mercer held a party at the K Club earlier this month that concluded 10 days of celebrations to mark his departure, he was approached about another job.
"The graveyards of Ireland are full of people who thought they were indispensable. I don't want to be one of those," said Mercer, who held the post of chief executive at Flogas Ireland. Eugene Quigley, who helped set up the business with him 29 years ago, died in 1997 and Mercer's wife passed away two years ago.
"Some guys just can't let go. But I want to refocus, develop some new interests, and lie in when I want to - though I still wake up at 7.20 on the dot every morning."
Mercer, the last member of the team that founded Flogas, Ireland's first plc, was greeted at his retirement party by everyone from former school pals to Health Minister Mary Harney and EU Commissioner Charlie McCreevy, a neighbour of Mercer's in the Kildare town of Clane.
"I made many representations to McCreevy over the years as chairman of the Irish LPG Association to reduce excise duties on LPG (liquefied petroleum gas), as there was none on natural gas," Mercer said. He's still chairman of the association, and also sits on the board of the European LPG Association.
Mercer's foray into the gas business was something of a whim. When he was working as a research demonstrator at UCD, where he gained his engineering degree, Mercer spotted a job advertisement for Kosangas.
"I knew nothing about Kosangas, but the ad said I would be spending six months in Ireland, six months in the States and six months in continental Europe. That's the only reason I got into the gas business," he said. "But Kosangas was taken over by Calor Gas about nine months later, so I never even got to take those trips."
While Mercer was promoted at Calor Gas, he realised he didn't want to be there in 10 years. When two colleagues approached him about setting up their own LPG business, Mercer grabbed the opportunity to compete against his former employer. Along with another acquaintance, they founded Flogas in 1977 and began operations in 1978.
"Of all the lads, I was the only one who had left a steady pensionable job to do this. I was married with two children. But I never thought we wouldn't succeed," he said.
"Ireland in the 1970s had high unemployment and inflation, and interest rates were between 15 and 20 per cent. Young people nowadays have no concept of that. People say times were bad in the 1970s, but I don't remember it that way. We were fairly comfortable. Indeed, I was comfortable enough to buy a plane."
Mercer's interest in flying dated back to his student days, when he chartered planes for the rugby trips he organised. His other college sideline was holding student dances at the Television Club that once stood at the top of Dublin's Harcourt Street.
As managing director of Flogas Ireland, Mercer was obliged to spend up to three days a week in England, where the company was becoming a leading distributor of LPG. Instead of checking in at the business class counter, Mercer flew himself to the airport at East Midlands every week. He still has a twin-engine plane and a half-share in two other aircraft.
Flogas went public in 1983 on the Unlisted Securities Market (USM) in Dublin and London, with a market capitalisation of about £12 million. By 1988, the company had a market share of about 18 per cent. Flogas got a full listing on the Irish Stock Exchange in 1990.
"Flogas kept growing and growing. We had a lot of personal connections, especially from being at Calor Gas, and we knew the business extremely well," Mercer said. "Our competitors said we were eating and drinking our way through every hostelry in Meath and Louth to win business."
A year after floating on the USM, and becoming the first company in Ireland to use the plc designation, Flogas entered the British LPG market by acquiring Portagas from the Redland group.
"When we were looking at buying Portagas, I went over to the UK with my colleagues to see it," Mercer said. "But we found a lot of deficiencies safetywise, and I wrote a report about these deficiencies to knock down the price."
The board took great exception to these criticisms, he says. "Then someone said 'have you heard the radio?' It turned out there was a huge explosion at the plant. We bought the company and then moved to a new site." Because Flogas was such a "capital-intensive business," DCC, then a venture capital firm, helped fund it from the start. DCC, which subsequently was transformed into a diversified holding company, bought a controlling interest in Flogas in 1994 and bought the rest of the firm in 1996. DCC founder and chief executive Jim Flavin became chairman of Flogas in the 1980s.
"Jim Flavin was a good chairman and he's a very shrewd businessman," Mercer said. "But he's not the first guy I'd go out with on a Friday night."
Flogas now has 40 per cent of the Irish LPG market and 25 per cent in the UK, ranking second in both markets. It has about 9,000 customers and employs 90 people in the Republic, 400 in Britain, and 23 in Northern Ireland, according to Mercer.
While Mercer expects Flogas to sell a record volume of gas this year, margins at the company were squeezed this winter by rising gas prices, which are not passed on to customers as frequently as oil prices. However, Mercer warns that gas customers may face price increases of up to 20 per cent over the next two years because Bord Gáis, which sells gas to Flogas, has used up supplies it bought at lower prices.
Despite all this, Mercer feels like he's leaving Flogas "on a high".
The first thing he's going to do once he settles into retirement is "declog my head of the last 30 years". It may not be the best time to offer him a job.
