Interview: BP, AKR embark on ambitious retail fuels plan
Wednesday, June 7 2017 - 03:19 AM WIB
Petromindo|Khalsa
Global energy firm BP Plc is embarking on ambitious plan to develop ?several hundreds? of retail fuel stations selling premium fuels in Indonesia over the next 10 years.
BP is teaming up with IDX-listed logistics firm PT AKR Corporindo Tbk to develop the retail fuel stations under the name of BP AKR Fuels Retail. The joint venture expects to open its first retail site in Indonesia in 2018.
Dharmawan Samsu, Head of Country BP Indonesia told Petromindo.com in an emailed interview that the initial focus of the JV will be in the urban areas of Java. He did not give specific location of the first retail station.
?The JV will be focused on bringing BP?s industry leading premium fuels offer to Indonesia. Around the world, BP fuels have enabled motorists to travel for longer in their cars and motorbikes and we are looking forward to bringing this technology to Indonesia, alongside other exciting customer offers at the JV?s service stations which will be new to the Indonesian market,? Dharmawan sai.
Dharmawan is optimistic on Indonesian premium fuels market despite the fact that currently subsidized fuel is still dominating national retail fuel consumption. ?Indonesia has a rapidly expanding middle class and we see demand for our premium fuel and shop offer growing,? he said.
BP is also undeterred by competition from existing competitors, namely Shell, Total and Pertamina. ?We believe that there is sufficient growth in the Indonesian market to accommodate all market participants, and that the consumer will benefit from greater choice,? he added.
Shell is currently the biggest specialized premium retail fuels player in Indonesia, followed by Total. Pertamina is selling premium fuels along with subsidized fuels. Shell operated the first fuel retail station in 2005 and in 2014 has operated only 73 stations.
Dharmawan declined to disclose the size of investment the JV will be spending to build the fuel station network.
In addition to the BP and AKR retail joint venture, Air BP and AKR have also recently signed a joint venture agreement to explore opportunities in the aviation market. ?Air BP believes that in aviation there is also a significant growth opportunity and that through its joint venture with AKR it can contribute to the development of the Indonesia?s aviation sector in the areas of infrastructure investment, operational standards, technology and customer offer innovation. We expect that over time there will also be opportunity to invest jointly in aviation fuel infrastructure with other stakeholders in the sector to drive further efficiency for the benefit of our customers,? Dharmawan said.
Furthermore Castrol and AKR have recently signed a distributorship agreement which will see AKR become a distributor for industrial, mining, heavy duty and marine lubricants in Indonesia.
On selection of AKR as partner, Dharmawan said: ?BP selected AKR as our Indonesian partner because of their strong local infrastructure and logistics position and their complementary skill set. Additionally, the companies share similar values and attributes. Safety is a key priority for both BP and AKR. AKR also strives for reliability, quality and on time supply of fuels ? attributes that are crucial to BP, and our customers.?
Editing by Reiner Simanjuntak