By Mohamed Adel
Egypt’s demand for lubricants has seen Shell Egypt alter its outreach to achieve a competitive edge in the country and introduce new production lines. Daily News Egypt talks to Shell Lubricants Managing Director Saher Hashem to find out more about the company’s plans to make itself a market leader in the lubricants sector.
What is Shell Lubricant’s expansion plan?
Globally, Shell Lubricants lead the international lubricants market for the seventh year in a row, and that’s what we aspire to maintain
With the presence of a Shell Lubricants factory in Egypt, more than 90% of our products in the country are locally produced from our factory. Our plan is to work on increasing our market share and become the lubricants’ market leader.
What is the rate of the company’s daily production?
The company’s daily production depends on many factors among which is the marketing plan of our product portfolio. The type and the quantity of the pumped products into the market is directly related to market demand and the marketing calendar.
Is there any future plan to increase the production?
New production lines are currently being installed in the factory, scheduled to start operating in the near future. The Egyptian markets’ need for lubricants ranges between 400m to 450m litres per annum, which places it among one of the top twenty markets, globally, in terms of size and we are keen to cater to that demand.
Where does Shell Lubricants import raw materials?
We import the needed raw materials in coordination with the Egyptian General Petroleum Corporation (EGPC). This happens in cases where raw materials aren’t locally provided through EGPC’s refineries. We also import part of the base oil used in our premium products from other Shell globally contracted refineries.
Why is Shell’s share in the Egyptian market low?
On the contrary, Shell Lubricant’s share in the Egyptian market holds a competitive share of the total market value that is expected to further increase by the end of 2014.
How do you market your products?
Shell has a large product portfolio that covers gasoline, diesel and industrial lubricants. We operate in the market through three main channels, the first being our distribution network which covers all of Egypt. We also have our business-to-consumer (B2C) network, where we have long-term partnerships with most of the top car agents and car dealers operating in Egypt. There are our business-to-business (B2B) network, mainly factories, with focus on industrial and heavy duty diesel engine oils. We mainly serve the cement, mining, power generation and agricultural sectors.
We always work with our partners on building long term relationships, providing them with latest technological solutions with premium services.
What is the latest factory you have contracted with?
The last contract was signed with Centamin, which extracts gold from the Sukari goldmine.
Has exiting the market affected your business? Has the new business model, which focuses exclusively on the lubricants market, affected the business?
Shell has not exited the Egyptian market but instead we have modified the form of our presence and chose to focus on the lubricants business, which we are committed to grow even further. Our products and services are still available under Shell’s trademark.
What is Shell’s pricing strategy in the coming period?
We will continue providing the oils and lubricants products to our target segment at competitive prices; however, we cannot comment on specific pricing details. Our policies depend on building sustainable relationships with our customers.
What are Shell’s chances for growth in 2014?
This depends on a number of factors, however we remain optimistic.
What has Shell obtained from the contract with the Bavarian Auto Group (BAG)?
Our cooperation started in 2007 when we supplied Shell Helix oil exclusively to BAG, which enabled us to target a distinctive customer segment requiring high quality products and services, which we provide. We renewed the contract once again in 2013.
What was the regional director of Shell in the Middle East aspiring for when he signed the contract with ARTOC Auto?
This partnership will potentially increase Shell’s market share and presence as ARTOC Auto is the sole Skoda cars agent in Egypt.
What are Shell’s latest products?
Earlier in April, Shell launched its new Shell Helix Ultra motor oil with patented Shell PurePlus technology which produces synthetic base oils made from natural gas. The product line also provides “superior wear and corrosion protection” that can help extend the engine’s life and reduce maintenance costs. The performance of the product has been great so far considering we are still in the awareness-building phase of the product.