Diversification 2
This Spring sees OTS Group Ltd celebrating its 50th anniversary and, from its humble beginnings in 1971 in a farm cowshed to becoming a leader in the fuel industry, the company has never lost sight of its values.
Exolum is the new brand name chosen by the CLH Group, strengthening the identification of the company with its future aims, focused on adapting its business to decarbonisation and the energy transition, the digitalisation of activities and the fight against climate change.
This rebranding is due to the need to adapt to the new environment and to transform the company itself, which, in addition to carrying out oil product storage and transport activities in Spain, has embarked on an international growth process and is now present in 7 other countries. The group has expanded its activity to the storage, management and transportation of liquid products, especially chemical products, operating in new sectors, such as eco-fuels, the circular economy and the development of new energy vectors.
In recent years, the CLH Group has experienced a series of notable changes, mainly focused on sustainable diversification, both of the geographical areas where it operates and the services offered to customers, over and above hydrocarbon logistics. Therefore, it became necessary to renew the brand and align it with this new era of the company.
“We want these initiatives for diversification and adaptation of the company to be aligned with the new challenges of the sector with a change in our corporate identity that reflects our growth and leadership,” explains Jorge Lanza, CEO of Exolum. “This brand reflects the transformation process that we are going through internally, to align with the company’s new business models and transmit our company values. These values are innovation and trust, reflecting the open and flexible way that we face the future, promoting new business opportunities committed to the development and sustainability of the planet.”
The new name, simple but modern, shows a spirit where innovation is the key. The brand is easily recognised in any language and the company will use this one name for all its business, both in Spain and six other countries where it currently operates (UK, Ireland, Germany, Netherlands, Panama and Ecuador – in Oman, it will continue to operate with the joint venture OQ Logistics), thus reinforcing the global identity of the group and creating a great brand that is sound, international and unifying.
With Exolum, the company sets itself a challenge to maintain the same level of recognition, extending it to the public at large, adapted to meet the aim of the company: “We create innovative solutions to improve our world”.
Oil services companies can no longer delay making a choice on their future direction according to the latest report from PwC Strategy&, called ‘Time to Choose’. The options are to stick with their hydrocarbon heritage; becoming ultra-efficient and digitally enabled or pivot towards low carbon growth opportunities such as offshore wind or carbon capture, using hydrocarbons as the cash generating engine to fund this transition.
‘Time to Choose’ states that a perfect storm of COVID-19, increasing public scrutiny and the growing momentum of Environmental, Social and Governance (ESG) factors influencing investor and buying decisions, has accelerated the pace and impact of energy transition in many regions.
According to the report’s respondents, many oil services companies already recognise the need to transform in order to better align with their customers, with some helping to set the pace of decarbonisation alongside major players.
Transformation influences
Low carbon credentials could become an area of significant competitive advantage. The report highlights how oil services companies can increasingly showcase their decarbonisation credentials as a means of securing tenders. Some respondents also mentioned increasing pressure being brought to bear by some majors who are keen for supply chain decarbonisation credentials to help support their own strategic direction and licence to operate.
Where firms operate can also influence the pace of transformation. As governments around the world respond to the pandemic, fiscal stimulus packages have been developed with many countries looking to use this pivotal moment in time to stimulate a green recovery to ‘build back better’. For those companies with a major footprint or head office in Europe, energy transition and ESG themes are likely to be much higher up the corporate agenda than other regions, such as the Middle East, which will see hydrocarbons retain their importance as a focal point.
Drew Stevenson, PwC’s Energy, Utilities and Resources leader, commented:
“We believe the oil services sector has a significant contribution to make in the UK’s energy transition journey.
“From engineering expertise and innovation to project management and global operational scale, these businesses have a golden opportunity to not only channel this capability into market leading credentials that will be in-demand globally, but to play a role in shifting the conversation about how this industry fuels and sustains energy and employment into the future.”
Decarbonisation driven by digital technology, deals and diversifying skills
In many ways COVID-19 has accelerated the need to adopt and deploy digital solutions. Given the physical impact of coronavirus on the workforce, companies in the oil and gas sector have been forced to increase automation and use of digital technologies, such as remote controlled vessels and robots to inspect underwater pipe networks and conduct maintenance scans of industrial complexes.
Needless to say, while digital offers great potential for efficiency gains in the oil services segment, in the short term at least, it will be balanced against tight cost control. As a strategic imperative, investment in digital solutions cannot be cut off.
M&A is another means by which energy transition could be accelerated, with complimentary skills, technologies and credentials likely to be highly sought after as entry points into new markets. Premium valuations are already evident for renewable-facing businesses. The availability of finance will probably also be a driver of this transition.
As for the transferability of skills between oil and gas and low carbon, this is not always easy or evident. All oil services companies have core capabilities in particular areas – some may have skills that are transferable while others may struggle.
Have you selected a strategic pathway that will allow you to flourish in an increasingly volatile trading environment? Let us know.
With a brand-new website and the introduction of a sister company, Halso UK Fuels Ltd continues its exciting journey from modest beginnings to a thriving business recognised as one of the country’s experts in petroleum, gas & oil supply and distribution.
Progressing from its launch in a caravan in 1967 through the wooden huts which still exist to the current modern offices it has always been renowned for excellent customer care and service which remain second to none.
Supplying fuels to industrial, commercial and domestic customers, this family run business is now in its third generation. Emma Osborn-Wilkes, granddaughter of founder Sid Osborn, is managing director of both Halso and its new sister company EL Oils which has been trading in some capacity for the last 50 years.
Emma commented; “We still supply fuel, oils and lubricants to our local farmers and domestic, residential customers but now we also service commercial clients nationwide.
“It was little over 12 months ago we decided to diversify, offering our lubricants, oils and greases under our sister brand EL Oils. We find this to be a much cleaner way of showcasing our varied product portfolio.”
Emma continued; “Halso continues to be our brand for fuel management and distillates, and EL Oils offers our additional products, as well as services including tank cleaning, oil changes and tank monitoring.
“EL Oils, like Halso, is a very proud family business with high standards offering a personal service to all customers. We want to seamlessly support all of our commercial or domestic clients with their fuel, oil and lubricant needs. It’s our job to power your business and home.”
Following an extensive review of Mabanaft’s UK-based companies – Mabanaft Limited, BWOC and Thomas Silvey – the latter is now focusing on fleet solutions. This change sees the Mabanaft OnRoute fuel card division being merged into the existing Silvey Fleet business.
In a deal completed on 31st January, Mabanaft Ltd has acquired Avon Lodge, one of the UK’s top-tier independent truckstops. The transaction highlights Mabanaft’s strategic commitment to developing a network of truckstops across the country, offering drivers and companies good-value, high-quality truckstops outside of those owned by the oil companies and large group networks.
The Scottish Oil Club has announced a relaunch, with a new name and refreshed branding that better reflects its role as a discussion forum for professionals from across the energy sector.
Mabanaft has acquired Junction 29, one of the UK’s top-tier independent truckstops. Completed on 5th August, the deal marks Mabanaft’s strategic commitment to developing a network of truckstops across the country, offering drivers and companies good-value, high-quality truckstops outside of those owned by the oil companies and large group networks.
Guy Pulham, who has succeeded Mark Askew as CEO of the Federation of Petroleum Suppliers, is seeking ‘greater engagement of members, Government and other trade associations’
Earlier this month Guy Pulham started his new role as chief executive officer (CEO) of The Federation of Petroleum Suppliers (FPS).
Speaking to many fuel distributors in Ireland recently, the most frequently used word to describe the current market was ‘challenging.’
“It’s been a tough year to date,” said Donall O’Connor, managing director of online distributor www.ValueOils.com based in County Antrim. “Customers are trying to extract the best price for everything – including their oil – and at the same time they’re also buying lesser quantities. On top of that, oil is less attractive for heating and gas is making significant inroads.”
FON asked distributors what they were doing to tackle the tough times and to ensure their business survives, and even thrives.
Be prepared
“We spend a lot of time preparing the company for the busy periods, so that when they arrive we’re in the best position to take advantage of opportunities,” added Donall.
“Being web-based, we have a lower cost structure; 99% of our orders are online. That means we can compete at the sharper end of the price strategy, and offer a more attractive deal.”
“We introduced a budget prepayment scheme following customer feedback. While we don’t offer credit, customers can choose to put an amount on a card each month, and then just pay the balance when the bill comes in.”
Stay positive
Agreeing that customers are increasingly price focused is Gordon Halnon, of County Wexford-based Gordon Halnon Oils. “You can lose a customer for the sake of €10 here or there. Service is much less important to them.
“It’s extremely competitive but important to stay positive. Hold onto your customers as best you can – the market will get better eventually and we all want to be there when it does!”
Reward customers and staff
Another distributor spoke about benefits now being offering to customers and staff.
“We incentivise staff with new account and upgrade bonuses, and seasonal prizes – last year’s was a 42-inch television; this year we’re offering free iPads for the highest upgrade to our premium kerosene.
“When they purchase 700 litres or more of heating oil, customers are being offered 10ppl off their next fill of petrol/diesel from one of our retail sites.”
However, this distributor emphasised that the biggest way to safeguard business was to protect reputation. “Deliver on promises, be fair and do the right thing when situations arise.”
Diversify
Brian Uprichard, who owns Armagh-based Brian Uprichard Fuels, said: “We diversified about a year ago and acquired a petrol station. As well as added sales from petrol, we also have a kerosene pump for heating oil. For those who might be struggling, it’s a way to budget for small amounts of oil at a time.
“We’ve also put a PayPoint logo in the shop, so when customers come in to pay for petrol they see the logo and ask about the delivery business.”
Brian’s last piece of advice is the easiest to implement. “Get down on your knees and pray a lot!”
