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Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, has confirmed ambitious plans to grow its retail network within the UK market to 400 sites over the next three years.
Building on its extensive understanding of the sector in India, Essar opened its first corporately branded site in the UK at Coalville in Leicestershire in November 2015 and has since added a further six service stations to its rapidly expanding portfolio.
Essar plan to build a retail network on a scale that befits a UK refinery owner and ultimately a nationally recognised brand, building on the legacy of its Stanlow site.
Retail was always a logical step planned for the UK, given the Essar Group’s extensive experience within the Indian retail market. As one of only six refiners in the UK, Essar is able to leverage its manufacturing strengths to provide quality products at value prices direct from Stanlow refinery to dealers rather than through third parties.
As a little known brand in the UK, Essar took on the challenge of entering a very competitive market and was encouraged by feedback from dealers and the company’s own research. The UK retail sector had changed markedly over the last few years as the hypermarkets had grown and traditional oil majors moved away from refinery ownership. This provided an opportunity to offer a new, clean, fresh brand, backed up by quality products direct from a manufacturer with an unrivalled pedigree.
Stanlow was a key part of the Essar brand proposition, with large sections of the UK’s road, rail and air transport sectors relying on the quality, expertise and guarantee of supply provided by Stanlow. In fact, for over 50 years Stanlow had supplied many of the major oil company, high street retail brands and supermarket outlets.
The refinery’s scale and complexity has put it at the forefront of supply to a huge section of the North West of England and North Wales, with product also going down pipelines to the Midlands and beyond. It currently produces over 16% of the UK’s road transport fuel demand, including three billion litres of petrol, 4.4 billion litres of diesel and two billion litres of jet fuel per year.
A distinctive brand offering was developed for the UK market, with a curved totem pole providing a unique effect which is clearly identifiable from the roadside. In conjunction with this distinctive design, larger scale pricing LEDs and clear and obvious space for convenience branding delivers maximum visibility and awareness of the offer to customers.
The response from the industry, trade media and consumers has been overwhelmingly positive to the new presence on the high street. One rival brand even emailed a photograph of the Coalville site to their sales force shortly after it opened with a warning that said ‘Essar are coming with a great design and will be a big threat going forward.’
Significant volume growth, in the region of 20% to 150% seen at each of the branded sites has been hugely encouraging and in line with company expectations. Awareness of the brand continues to grow and has been strengthened by the expansion of the Essar liveried tanker fleet with the recent addition of five new vehicles.
One clear differential to India, where the operating model is mainly based on new builds, will see the Essar business in the UK primarily dealer focussed, rather than operating sites. Although the company would consider purchasing if the right site or sites were to become available and fitted Essar’s plans, they would look to put in place a dealer group as operator given the expertise available in the market place. Essar in the UK will be mainly a DODO model, but if the right opportunity was available for purchase, there could also be a small number of CODO outlets.
As a UK refiner, Essar will achieve its growth ambitions by maintaining a competitive pricing position and bringing value to the independent dealer. Put simply, it offers high quality fuels direct from a UK refiner at value prices, together with a clear, honest and straightforward pricing offer to a dealer that will state a premium over Platts for each grade they wish to purchase.
The perceived journey direct from refinery to forecourt is a key element of the messaging used in both trade advertising and on the pump nozzles themselves and has helped drive the extensive coverage achieved to date in the trade sector media.
Providing excellent customer service is also central to Essar’s expansion plans and a highly experienced and enthusiastic support team are all UK based at the Stanlow refinery. Located in the same office as the retail and commercial sales teams, they are able to answer questions or deal with any issues that arise both quickly and efficiently.
The retail team itself currently consists of seven people employed directly in customer facing roles, with wider support functions including sales support, finance and distribution provided by dedicated teams within the wider Essar administrative functions.
Essar Oil UK Executive Chairman, Naresh Nayyar, commented: “This is an ambitious growth target, but one we believe is a realistic proposition within the UK Market. The initial response from both the dealer community and end consumer has been very positive indeed and we are looking to build on this initial momentum to drive rapid growth of our network. Underpinning this all is a business in a strong financial position that has provided 100% availability of products to its customers for the last 24 months. Essar has invested heavily in Stanlow since acquiring the site and that security of supply of quality fuels is absolutely key to building long lasting relationships in the retail space.”
Essar Oil UK, Chief Commercial Officer, Retail, SB Prasad, said: “Extensive research and planning went into the launch to the UK market and those careful first steps have given us the solid platform on which to move forward rapidly. In the next few months we hope to have about fifteen sites and by the end of this year we will maybe be looking at 100 locations. Our goal is for Essar to be established as a nationally recognised brand and in a good position among the major current players who have been in the market for many years. The response we have had so far, to what is the newest brand on the UK high street, has been hugely encouraging.”