Shell looking to turn over non-petrol leaf
Non-oil business eyed to reach 50% of sales
Shell Company of Thailand Ltd is remodelling its business concept, in part to double the size of its non-oil business to 50% of its total sales over the next seven years.
The company Monday announced its business direction, aiming to increase sales from its non-oil business to half from 20% by 2025.
The company said it will open up convenience stores at a faster clip, to be complemented by Deli Cafe, Shell Helix oil change service stations and Shell Advance Motor Care Express at petrol stations nationwide.
Ornuthai Chiangmai, the company's executive director of retail business, said the company will open 20-30 Shell Select convenience stores this year, up from 76.
Shell will spend 90 million baht to open 30 new Deli Cafes, bringing the total to 85 by year-end.
The company will also renovate 76 Shell Select convenience stores this year.
The company said it is committed to increasing the number of Shell Advance Motor Care Express outlets for motorcyclists to 200 by year-end, up from 20.
Shell has 520 Shell petrol stations nationwide and 350 Shell Helix oil change stations.
The company plans to open 30 new petrol stations this year, both with its own funds and through outside investors, she said.
Each petrol station requires an investment of 50 million baht.
Typically 70% of annual investment in petrol stations belongs to Shell, and the rest is covered by dealers.
The company expects the number of Shell petrol stations nationwide to reach 800 branches by 2022.
A&W restaurants and Kerry Express will also provide their services at Shell petrol stations, she said.
"We are ready to compete and grow in the non-fuel retail business," said Ms Ornuthai.
"With those services, we aim to keep the 3 million people who visit Shell petrol stations every week, as well as attract new customers."
Shell is the third-largest oil company with market share of 13%, after PTT and Bangchak, which control 40% and 15%, respectively.
The company has operated convenience stores for more than 15 years, albeit with limited success.
Petrol companies in recent years have been focusing more on non-oil business in efforts to maintain profits as electric vehicles are forecast to bite into petrol consumption.
PTT, the country's giant oil and gas firm, is likely the most successful player in the non-oil business, attracting customers via various offerings from convenience stores, coffee and noodle shops, bank services, quick service restaurants and fashion outlets.