Contract Bangalore has bagged the Shell retail account, estimated by market sources to be worth Rs 5-7 crore. As is known, the government has exempted Shell India from the 26 per cent mandatory divestment clause and allowed the global oil major to open 2,000 retail outlets in the country.
While there is a Rs 2,000 crore investment criterion for entry into the retail segment, Shell doesn’t have a problem on this score. The oil major is present in India through eight to nine companies and their aggregate spends are tagged at close to Rs 3000 crore. Contract Bangalore would be the sole in-charge of these 2,000 retail outlets, scheduled for a phased launch.
The development was confirmed by Dipak Marwah, Senior Vice-President, Contract Bangalore. “There was no pitch for this particular account. We bagged this piece of business on account of Shell’s global alignment with J Walter Thompson (a sister concern) and the fact that all of Shell’s marketing in India is currently being serviced out of Bangalore. We were informed about our part in Shell’s retail venture around two months back, but since we were waiting for the launch of Shell retail in Bangalore, we kept things quiet,” he said. Marwah also said that Shell was looking at a phased launch of the planned 2,000 retail outlets. “Mass media would essentially be used for the promotion of Shell’s initiatives in India as and when more retail outlets are set up,” he added.
When asked about the size of the Shell retail business, Marwah chose not to comment.
However, he did mention that the win was a significant one for Contract Bangalore.
Royal Dutch/Shell, the world's third largest oil and gas group, had applied for a licence to sell petrol and diesel from about 15,000 filling stations across India quite some time back. Shell India had approached the Foreign Investment Promotion Board at least twice in the past three years seeking a deletion of the divestment clause. The proposal was finally cleared by Finance Minister P Chidambaram in August 2004. As a result, the government has exempted Shell India from the 26 per cent mandatory divestment clause, and also allowed it to open retail outlets in India.
Shell has been keen for quite sometime to have a strong presence in the retail fuel sector in India. Its presence in India goes back almost 75 years, when it established the pioneering oil and gas distribution company, Burmah Shell, as alliance between Burmah Oil Company and Asiatic Petroleum (India) in 1928. Since then, the Shell logo has remained one of the better-recognised corporate symbols in India.