Chevron invites investors to build new Caltex stations

BRAND ACTIVITY

Aug 15th, 10:11

Chevron South Africa, which seeks to open up 100 new Caltex service stations by 2015, is actively looking for investors to establish, own and operate retail sites under a revamped business model which further entrenches Caltex as a dynamic brand focused on strategic partnerships in the South African fuel value chain.

“We saw an opportunity to update traditional ownership models and place strategic assets in the hands of entrepreneur investors while sharing global Chevron retailing systems, brand value ,more than 100 years of expertise and operational excellence,” says Chevron South Africa’s General Manager of Products, Teresa Booth-Oliveira.

The strategy is to produce powerful and dynamic partnerships, many of them already proving to be highly successful. From its inception in 2012, Caltex has seen an unprecedented number of new additions to its existing 800-strong network of retail sites. By the end of 2013 Caltex plans to open at least 25 new stations across the country.
Effective investor programmes

Chevron has identified urban and outlying locations in the central areas of Cape Town, Gauteng and Durban to set up new service stations and hopes to work with prospective investors through two programmes: Retailer-Owned, Retailer-Operated (RORO) and Branded Marketer.

"Under the RORO programme, the operator or retailer invests in the property, building, pumps, underground tanks and basic service equipment. Caltex provides globally recognised service station design/layout drawings, signage, and benchmark Retail Support Programmes designed to ensure that the new Caltex partner provides the most competitive offer in industry to the consumer," says Booth-Oliveira.

"For our retailer partners, the RORO class of trade provides greater ownership of the business and a greater level of independence, which adds to their earnings growth. Retailers have the flexibility of customising their own "backcourt" offerings, whether it is operating a convenience store, a fast-food outlet or a car wash in their service stations," she adds.

Chevron's value proposition is its excellent and compelling financial package for its Caltex retailers, which involves additional incentives or discounts and, on a case-by-case basis, certain grants.

"Added to this is an exclusive loyalty program with the continent’s largest bank, Standard Bank, the FreshStop convenience store in partnership with the dynamic super-retailer Fruit & Veg City, world class local site marketing tools and Caltex’s premium product range, enhanced with the cleaning power of our Chevron-owned Techron additives. We also work with our partner banks for the acquisition of credit cards at the service stations and offer the StarCard proprietary fleet card programme as a payment option for companies’ fuel expenses,” says Booth-Oliveira.

The Caltex Branded Marketer class of trade refers to an owner who operates multiple sites (30-40) under the Caltex brand. As an example, in 2012 Chevron celebrated a R130-million acquisition deal by Branded Marketer in the Eastern Cape, establishing double the business distribution reach across the province. This Branded Marketer has now become the largest Caltex fuel marketer in Chevron’s Africa, Middle East and Pakistan region, having grown from 41 sites to 88, resulting in the creation of close to 100 new jobs in the Nelson Mandela Bay area alone.

"We have eleven large Branded Marketers in this country. They, and the RORO retailers collectively account for 50% of our total network of stations," says Booth-Oliveira. The remaining stations are under the Company-Owned, Retailer-Operated (CORO) franchise model.

The company's revamped business model is not only employed in Africa, but equally across Caltex markets in AsiaPacific, including Malaysia, New Zealand, Thailand and the Philippines. "Eventually, we hope to model Chevron as a partner of choice, investing in value-added programs that support our partners’ cash flow and earnings and providing the most powerful partner brand in Southern Africa," she added.

Market power brand

Chevron has been a major competitor in the South African market for over 100 years, According to Booth-Oliveira, in the past three years Caltex has made significant market share gains, much of this attributable to selecting the right partners for growth and allowing our partners the fruits of ownership which has incentivised local site growth and success.

"Over the past several years, we have transformed from a moderately-strong competitor in the market to a brand associated with some of the very best retailer owners in the industry.”

“Caltex has grown key product sales by 7% in a market that is growing a mere 3% organically. Our revenue results have been some of the highest in the history of the company and include a sizeable earnings stream from our very competitive and loyal industrial and commercial customers like fleet owners, ports and wholesalers. The combination of these business channels accounts for a significant 16% share of market, which we aim to lift to the 20% plus mark over the next 4 years,” says Booth-Oliveira.

Acknowledging that the company is a long-standing, committed player in the South African market, Chevron / Caltex remains fully committed to its investments here. "Over the past several years, Caltex has demonstrated strong performance and that bodes well for us to continue our growth momentum,” concludes Booth-Oliveira.