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Bangkok Post: Shell hands control of stations to dealers

Company hopes move will cut operating cost

ARANEE JAIIMSIN

The Shell Company of Thailand Ltd will hand over the operation of all of its company-owned retail stations to dealers by the end of this year. Simon Hirst, general manager retail sales and operations for Shell in Thailand, said there were 550 Shell petrol stations in the country at present.

Of the total, 330 stations are owned by the company and operated through retail business agreements with dealers and 200 are dealer-owned stations. The remainder are company-owned and operated.

The number of company-owned and operated stations has fallen from 150 three years ago and would drop to zero by the end of the year.

”Operation costs should decrease because dealers would try their best to cut down wasteful expenditures and attract more customers by keeping stations clean, convenient and safe, aiming to be rewarded as much as possible by the company,” Mr Hirst said yesterday.

Shell, which has operated in Thailand for more than a century, expects sales revenue this year to pick up from a loss in 2006.

Josef Waltl, executive vice-president for retail sales for Royal Dutch Shell Group, said that even though Shell would not expand its retail network in 2008, the company remained committed to expanding its presence in Thailand.

Mr Waltl said Shell would continue to expand despite low marketing margins over the past two years.

”Retail business should not be judged by the short-term situation. We believe Thailand is a growing market in Asia because people are becoming more affluent. Therefore, our business would improve in the long term,” he said.

He added that Shell’s global strategy was to grow in Asia, and that Thailand was one of the company’s key strategic locations in the region.

To boost sales, Shell focused on new product launches, existing station renovations and upgrades in line with service quality improvement, said Mr Waltl.

The company plans to renovate and upgrade 50 company-owned service stations in Bangkok and the vicinity within the year.

The average budget for the improvements is between two million and three million baht per station.

Renovations have been completed at three stations: on Soi Suan Plu, Narathiwat Ratchanakarin Road, and on Ratchadaphisek Road. They have since generated a 20% sales increase over the same period last year.

Shell also introduced V Power diesel, which is the replacement for Shell Pura, to the Thai market in August. In the first eight weeks, sales revenue of V Power diesel increased 81% from the levels of Shell Pura in the first half of the year.

http://www.bangkokpost.com/Business/12Oct2007_biz39.php

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