30 March 2007
Shell International Petroleum Company Ltd (Shell) and OJSC Alliance Group (Alliance) announce a commitment to establishing a joint venture to operate a network of more than 150 Shell-branded retail sites in the Ukraine. This deal will provide Ukrainian customers with access to high quality fuels at competitive prices and with an emphasis on customer service.
“With this joint venture we are delivering our strategy to invest in growing markets,” said Rob Routs, Executive Director of Shell’s Downstream business. “Ukraine’s large population, projected GDP and its strategic location in Eastern Europe make it attractive and an important part of our future retail business in Europe. We welcome the opportunity to work with a company such as Alliance, a respected organisation with expertise in Ukraine, and look forward to developing our cooperation.”
Musa Bazhaev, President of Alliance Group, said: “We are pleased with the development of our relationship with Shell in Ukraine. Cooperation between our companies has opened the way to Ukraine for a most innovative international business. I am confident that our joint venture will be beneficial for both parties and will make an important contribution to development in the economic and social spheres in Ukraine.”
Alliance’s existing sites in Ukraine will be upgraded and re-branded as Shell sites – that will enable the JV to benefit from Shell’s experience and global reach and Alliance’s local knowledge. The agreement is based on the success of the Trademark Licence Agreement trial in Ukraine last year, with the six Shell-branded retail sites in the Kiev area yielding positive and encouraging results. Over a six-month period retail volumes have more than doubled.
By purchasing fuel at Shell-branded sites, Ukrainian motorists will join the 20 million customers of the world’s largest retail fuel network, who every day experience the Shell commitment to product quality and high service standards at more than 46,000 Shell-branded retail stations in over 90 countries world-wide.
Shell will have a 51% share and Alliance a 49% share of the newly established joint venture. Start of operations is subject to fulfillment of certain conditions, including obtaining regulatory approval.