Essar Oil UK has been growing its retail network since the end of 2015 and at the last count had 72 dealer owned and operated (DODO) sites. That’s not including a new dealer signing in the North West to be announced shortly, described as one of the largest DODO sites in the country, in terms of volume. But despite some great signings, Essar’s target is to reach around 400 branded sites within the next four years and become a nationally-recognised brand. In order to help achieve that, it has announced a new proposition to run in parallel with its dealer operations – leased sites.
“We are very keen for dealers to come on board, but our focus has shifted,” explains Carlos Rojas, who joined the company last October as head of marketing and logistics. He joined from Puma Energy, where he was commercial director for Honduras, general manager for Panama & Colombia and led value chain optimisation for the Americas. Prior to this, he had worked for Shell UK and Essar in the UK, in a number of commercial, supply and strategy positions.
“We want to grow in the direct retail segment – we want to be called a retailer,” he says. “But we are not going to buy sites, we want to lease them.”
He explains that the company is developing a proposition where it leases sites which are then run by a commission operator and talks about a “very interesting retail plan”, which will help highlight the Essar brand to UK motorists.
It will also give certain dealers an opportunity to lease out their site, in situations such as if they want to retire or do something different; they don’t want to sell up but can be guaranteed an income.
“Then by us developing and implementing our value proposition there, we will drive traffic and increase the value of the site from which the owner will benefit,” says Rojas.
“We feel the strength of the company – the refinery behind the lease – is a winning proposition for a dealer who wants to lease his site. In terms of length of agreement, it’s usually 15-20 years, but we are happy to discuss options,” he stresses.
“Sites we’re looking for are usually around 4mlpa, but we’ll be happy to look at anything 2mlpa and above.”
There are already about eight sites in the pipeline, moving to the lease model. One of those is a new-to-industry site near Preston, which should be open by the beginning of October. It’s an interesting proposition in that another company is building the site, and Essar is then leasing it.
“But the great thing for Essar,” says Rojas, is that it will be able to display its evolving retail proposition, which includes a bigger shop and car wash facilities, a good coffee and food-to-go offer, lockers to collect deliveries, ATM and so on. We are also in negotiations with a major symbol store operator to feature on the leased sites.
“We recognise our retail offering to the consumer has to be augmented and this is why we are working hard on the brand, such as offering mobile payment on the go. We will have an app which is likely to ready by Q4. It will allow us to maintain a service 24/7 when a site has to close at night. The payment facility will review the credit limit and automatically release the pump.”
The leasing development has been a natural evolution of Essar’s retail journey, says Rojas. “We started as a wholesaler to the dealers, and we have been quite successful. For me brand standards are critical, and our programme launched in January was very well received. It has several key attributes including mystery shopper, logistic efficiency, marketing and promotions, local fuel cards, incentives and competitions – we think it’s one of the most comprehensive offerings for a dealer. Our product supply service and security of supply proposition that we offer to our dealers is very highly rated.
“One thing I can assure them is that Essar sites will remain wet!”
QUICK INFO
- 2011: Essar Oil (UK) Limited (part of Essar Group, an Indian multinational conglomerate and construction company) completed the acquisition of the Stanlow Manufacturing Complex from Shell in August 2011.
- Stanlow: Located on the South side of the Mersey estuary near Ellesmere Port, Stanlow produces a range of oil products, including about one sixth of Britain’s transport fuels annually – 4.4 billion litres of diesel, 3 billion litres of petrol and 2 billion litres of jet fuel.
- 2015: In November the first Essar branded UK forecourt opened on a site owned by Top 50 Indie HKS at Coalville in Leicestershire.
- 2022: With 72 dealer sites, Essar is also seeking sites to lease.
Source: Forecourt Trader
