Pilipinas Shell bares 5-year business transformation strategy

Pilipinas Shell Petroleum Corporation is embarking on a five-year business transformation strategy to recover from the financial beating it experienced in 2020 due to the economic impact of the COVID-19 pandemic.

In a statement on Wednesday, Pilipinas Shell president and CEO Cesar Romero said that in the next five years the company will undertake three major changes in its strategic priorities:

• Transforming its supply chain from manufacturing to full importation
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• Changing its business model from retail to mobility
• Shifting to lower carbon operations and introducing lower carbon products and services.

“The company is strongly positioned to meet the resulting recovery of energy demand as well as the growth in consumer spending,” Romero said.

“Moreover, we intend to do our share in contributing towards Royal Dutch Shell’s aspirations to be a net-zero carbon business by 2050,” he said.

In 2020, Pilipinas Shell posted a net loss of P16.32 billion as it incurred heavy expenses due to the cessation and transformation of its refinery in Tabangao into an import facility. 

The transformation of the Tabangao refinery facility into a full import facility has enabled Pilipinas Shell to focus on improving its efficiency and operational standards, according to Romero.

To recall, in August 2020, Pilipinas Shell announced it is permanently shutting down its refinery in Tabangao, Batangas City as it shifted its strategy from manufacturing to importation to sustain its business amid the economic impact of the COVID-19 pandemic.

Despite the initial losses due to the move, the company is optimistic that the refinery’s conversion will reduce capital and operational expense exposure, lessen vulnerabilities to variability and product pricing, and bring about growth.

The company’s tank farm, shipping, and road transport assets offer flexibility and have proven their resilience to changes in the market, Romero said.

He added that Pilipinas Shell’s facilities are capable of handling a broad range of vessels, and operate in a safe and environmentally considerate manner.

Pilipinas Shell’s retail business model is also shifting from a gas station to a mobility site, which will not only cater to cars and standard vehicles, but will also have offers in e-mobility for cyclists and pedestrian customers.

“Pilipinas Shell aims to build 60 to 80 new sites per year to reach its overall target of having 1,500 mobility sites by 2025, achieving its goal to grow alongside the Philippine economy by increasing fuels volumes by 4% per year and convenience retail profits by 15% per year,” Romero said.

Pilipinas Shell is also gearing up to innovate low-carbon and carbon-offset products while shifting to low-carbon operations. — BM, GMA News