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Exel keeps firm hold on brand

by CAR magazine on 23/10/2003

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Despite the intended merger with Sasol in January, the Exel brand is still expected to continue independently afterwards, said Maurice Radebe, Exel’s chief executive.

Despite the intended merger with Sasol in January, the Exel brand is still expected to continue independently afterwards, said Maurice Radebe, Exel’s chief executive.

This statement was made amidst rumours that once the merger had been completed, all Exel’s service stations would be rebranded as Sasol outlets. Radebe said that his company’s 189 branded stations would remain, and there would be more.

Radebe said it was important that the Exel brand should remain as “it epitomises the importance of empowerment in the oil industry. It is also known as a good brand for customer service and quality, but Sasol has a global presence and it made sense to maximise the value of the two brands.”

“We have been able to ensure the future of black shareholders in Exel, and the decision to keep the brand has been very important. This partnership with Sasol is one that works.”

There are currently only a few Sasol-branded service stations, but the company owned a number of sites which operated under other brands. Once its “Blue Pump” agreement expires in December, these outlets and would be rebranded from the beginning of January.

Although the deal had yet to secure the approval of the competition authorities it will bring Sasol closer to the 25 per cent black equity level stipulated by the empowerment charter for the liquid fuels industry, as reported in CARtoday.com in October.

“Black shareholders have had a stake in the medium-sized business of Exel, but it is important for black shareholders to own 25% of the new multibillion rand business it is an important deepening of empowerment presence in the industry.” Exel has a R2bn turnover, with an annual profit of R100m.

Overtrading has squeezed margins for petrol station operators, forcing many to close, and increasing competition through the new licensing system. Accommodating new entrants could result in “a bloodbath” with many, mostly black, franchisees going out of business, according to reports from representatives of African Minerals and Energy Forum (Amef), the Fuel Retailers’ Association and the SA Fuel Dealers’ Association as told to the Parliamentary portfolio committee on minerals and energy in August.

Radebe suggested there would be increased opportunities for black entrepreneurs through ownership of the new Exel and Sasol branded outlets, as well as empowerment through equity ownership and procurement.