Tony Jenkins, manager of Modern Gas Co.’s propane operations building, is shown holding a propane canister with an AmeriGas label. The propane exchange division of Modern Gas was recently sold to AmeriGas, the largest propane company in the United States.
ALBANY, Ga. -- They were pioneers of a sort, back in 1990, acting on an opportunity to bring convenience to Southwest Georgia grillers and backyard barbecuers.
Steven Holloway, senior vice president of Modern Gas Co., made it clear Monday that while the company’s cylinder exchange division has been sold, the “mothership” is alive and well and working on some large plans.
Holloway said Modern Gas didn’t originate the idea of selling small propane canisters at supermarkets and convenience stores, the company just brought it down to Southwest Georgia.
Now comes the end of an era. On May 2 Modern Gas completed the sale of its 20-pound cylinder exchange business to AmeriGas, which included more than 1,600 cabinet locations throughout Georgia and northern Florida.
“It’s a capital-intensive business,” said Holloway. “On average, it costs us from $1,000 to $1,500 for each propane cabinet we install. We have access to capital, but it takes three to five years before we see a profit.”
According to officials with the Albany company, which has been in business since 1954, a crucial factor in the decision to sell focused on the Atlanta Merchants Association and its 700 accounts.
“Of course they wanted all their accounts involved with this,” Modern Gas CEO and founder Dan Holloway said. “We were being pushed to invest by people who wanted the cabinets — especially in the Atlanta area. That was our biggest growth area by far. It was just more than we could handle and still take care of the rest of the business. We got to 400 (accounts), and I said ‘We can’t go any further.’ They didn’t like that, but that’s when we had to sort of back up.”
AmeriGas, according to Steven Holloway, is the largest propane company in the United States. Its deal with Modern Gas includes a long-term lease of the Albany company’s cylinder operations building on Roosevelt Avenue. AmeriGas will begin operations there Wednesday, according to Tony Jenkins, the company’s operations manager. AmeriGas has offered employment to all of the 14 employees associated with the Modern Gas exchange division, Steven Holloway said.
Russ Deherder, manager of corporate development with AmeriGas, called the purchase a “strategic acquisition” for his company, filling gaps in the AmeriGas propane service area.
“I was happy to come to an agreement with the Holloways, which was certainly beneficial on both parts,” Deherder said.
According to Steven Holloway, Modern Gas began operations when Holloway’s grandfather, “Popeye” Holloway, purchased the business for his son, Dan, and Dan Holloway’s wife.
“My grandfather had read an article that Albany was a great place to start a business because so much was happening here then,” Steven Holloway said. “(My grandparents) were from Fort Pierce, Fla., and knew nothing at all about the propane business.”