Raúl Silva
Country Manager Mexico
Petroassist
/
View from the Top

New Arrival Spells Change for Retail Sector

Tue, 01/21/2020 - 20:36

Q: What were the incentives that spurred Petroassist’s arrival to Mexico?

A: Despite Petroassist’s recent arrival to Mexico, we have been selling fuel dispensers, including our P2000, P4000 and P5000 models since 2015. The Energy Reform and the arrival of the major oil companies set a clear opportunity for us. Prior to the Reform, our services were not needed in the same way as they are now. Speaking of maintenance, previously in most situations, the maintenance of the forecourt equipment was made ad hoc by an employee that worked at the gas station and that accumulated this responsibility with some other. Due to the absence of competition, there was little reason for PEMEX to be overly concerned with maintaining high standards. Although there were many different owners, they all worked under the same flag. PEMEX’s business would not be affected if a major accident occurred, and customers would not leave as all the market had the same brand. Now, with the arrival of new competitors, we are starting to see an increasingly number of gas stations being managed and maintained in a more structured way, following European and American standards.

Q: How does the retail sector’s distribution in Mexico affects the way Petroassist is investing here?

A: In Europe, five or six companies may cover 80 percent of the market, but Mexico is different. The market is granular, with many companies accounting for a small number of gas stations each. Currently, as a company, it is difficult to reach the estimated 9,000 PEMEX stations, because most of these PEMEX distributors do not value our services as they continue to allow dispatchers to carry out the maintenance of their stations. We are now increasingly investing into all areas of our operation, proving our long-term commitment with this market.

Q: What are your main contracts in Mexico and how does the company differentiate itself?

A: In Mexico, we have mainly worked with the Spanish oil company Repsol, which is also our client in Europe, and with which we have maintained a long-term partnership. We mostly sell fuel dispensers, install electrical and mechanical infrastructure, and provide multi-brand maintenance services to all kinds of forecourt equipment. Recently, we signed a contract with Shell, and we will be working directly with Pragma Asset Management to provide preventive and corrective maintenance for their petrol stations. In Europe, multi-brand maintenance contracts are normal. Besides Petrotec, our dispenser brand, Petroassist is also able to give service to equipment of other brands. In Mexico, maintenance providers have an entrenched culture of servicing exclusively the brands they represent. This is evidently the worst cost-effective option. We are probably one of the few, if not the only company, with more than 30 years of multi-brand maintenance experience operating in Mexico. European and American maintenance contracts have strict service level agreements, broad scopes and strict safety requirements. Our mission is to prevent as much as possible incidents, and when not possible, to solve them. For this to happen, we count with a sound operating structure, backed by robust procedures, tested and improved throughout the years. Besides dispensers, we maintain all the other forecourt equipment, including consoles, water-air dispensers, pumps, emergency buttons and vapor recovery systems.

Q: How important is cross-selling for gas station companies?

A: The market is still too young and dynamic, and every company is spending a tremendous amount of resources. The focus is in attaining the largest chunk of PEMEX’s share, because once gone, the best chance of getting new affiliates is lost. Owners of small gas station groups should be signing contracts with private companies now. The new brands are major differentiators and promote heightened sales for the gas station owner, nevertheless, in three, four years, every other gas station will be one of the majors, and the differentiation will naturally move on. After this, other services such as convenience stores, carwash or mechanic workshops will also be important for attracting costumers.

 

Petroassist is an international subdivision of Petrotec Group, a Portuguese product supplier and service provider to the fuel retail industry. It is also involved in the EPC process of petrol stations, fuel storage and distribution facilities.