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Jamaica Gleaner: Shell to spend $400m on operational facilities here

Jamaica Gleaner: Shell to spend $400m on operational facilities here

By Susan Smith , Staff Reporter

Published: Friday September 3, 2004

THE SHELL Company West Indies Limited, (Shell) will spend over $400 million this year to improve its operational facilities in Jamaica says its country chairman, Mario Vulinovich.

“Our clear focus for this year is to get our network operating to the optimum,” he told the Financial Gleaner. The company will be seeking to maintain its market leadership through, “exceptional customer service,” he said. Shell’s key strategies are to focus on the proficiency of its dealers and upgrading it sites.

“A lot of concentration is on our dealers,” he said. “We are investing a lot of time, effort and money because we are looking for dynamic entrepreneurs to be our dealers.”

The New Zealand-born chairman said Shell has already implemented some new features to improve its customer service.

“Key factors are the retailers’ selection and staff training,” he said, noting that improving infrastructure is not sustainable without good customer service. But Shell is also investing in its distribution infrastructure.

RECONSTRUCTION OF STATIONS

“We are going to invest about $300 million on the service station business this year,” he said. Two-thirds of that sum has been allocated to the demolition and reconstruction of stations on St. James Street in Montego Bay and in Runaway Bay, St. Ann.

In addition, Shell is currently installing new fast-flowing pumps on its sites to give customers a quicker turnaround time at the pumps. Customers at the stations of Washington Boulevard and Liguanea are already benefiting from this. The tanks at a number of sites are also being upgraded to international standards. He said this was in keeping with Shell’s commitment to preserving the environment.

Other improvements include the renovation of Shell signs at the service stations. “We have confidence in Jamaica and are investing not just in the retail part of our business,” he said. “We earmarked $100 million for liquefied petroleum gas (LPG) annually. This goes into buying new cylinders and telemetry, a system which monitors the LPG in the tanks at customer sites.”

The system has proven to be especially beneficial to hoteliers and Shell has seen an increase in demand in this area with the expansion of the hotel industry.

FALLING OIL PRICES

Jamaica’s petroleum industry has experienced a growth of 3.7 per cent since the year 2000. Mr. Vulinovich said, “High oil prices causes sales to go down because people are trying to conserve, especially with using LPG.”

As of yesterday, the price of petroleum on the local market went down by $1.00, but international oil prices are falling from an all-time high reached last month. This has brought ripple effects in the Jamaican petroleum market.

“Margins will continue to be eroded,” he said. “Prices will continue to become more aggressive so we need to change the way we operate.” Shell West Indies was established in Jamaica in 1923 and is a part of a global group of companies which forms the third largest petroleum company in the world, Royal Dutch Shell. It opened its first service station in 1929 and now has 56 service stations islandwide. Shell supplies petroleum products to the retail and commercial market. Some of its major customers are in the mining industry, highway contractors and the electricity company.

http://www.jamaica-gleaner.com/gleaner/20040903/business/business1.html

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