Asia/Pacific News
Australia's Caltex Looks to Change Image
Australian oil and transport fuel company Caltex [ASX:CTX] is working to change its image to emphasise its focus on product distribution in the face of the closing of one of its two refineries, The Australian reports.
Caltex's Kurnell refinery in Sydney is set to close in 2014, and the site will be converted into Australian's biggest fuel import terminal.
"There is some perception that Caltex has two refineries and a couple of petrol stations," said Chief Executive Julian Segal.
In fact, Segal said, Caltex's biggest strength is in its petrol stations and its distribution network, which supplies a wide variety of products including marine fuels.
The company supplies 30 percent of Australia's transport fuel.
"The outlook for Caltex is great because of the diversity of markets we operate in," Segal said.
"We have significant opportunities for growth."
The refinery business has been less profitable than distribution in part because of competition from large Asian refineries: Australia is expected to go from supplying about 95 percent of its own transport fuel in 2000 to 40 percent by 2020, the Australian reports.
"Kurnell has been a difficult decision, but clearly it was the correct one in terms of rebalancing our supply chain in the current context of oversupply in the region, of very much bigger and more efficient refineries," Segal said.
"We had too much exposure to our own older, smaller, less efficient refineries."
Caltex has made moves to diversify its operations, including the December 2011 acquisition of Bailey's Marine Fuel Australia, a specialist marine fuel company, infrastructure developer, and fuel service provider that operates along the Western Australia coast and in Darwin and Sydney, for AUD 20 million ($20.7 million).
