SHELL FEATURE

FEATUR

E

S H E L L

2 www.southafricamag.com

Shell began operating in South Africa well over a century ago, initially trading in paraffin and kerosene to bring both heat and light to communities of Southern Africa.

Shell S O U T H A F R I C A

Shell FEATURE

3www.southafricamag.com

S ince energy is closely linked to economic growth, Shell’s presence has been inextricably tied to South Africa’s industrialisation,

infrastructure development and the increased use of transportation.

“We are naturally proud of Shell’s long association with Southern Africa,” says Bonang Mohale, Country Chairman & VP of Shell Oil Products Africa, South Region.

“This is an important and strategic country for Shell and we’re delighted that for several years now Shell has retained its preferred fuel brand status in this highly competitive market.”

Shell operates a number of oil-related businesses in Southern Africa including fuel retailing, chemicals, aviation, marine, lubricants, commercial fuels and bitumen. The company employs around 1400 people and operates some 750 strategically located service stations, with a market share of nearly 20 percent.

The company also refi nes crude oil through the 180 000-barrels per day SAPREF refi nery, South Africa’s largest oil refi nery, jointly owned by Shell and BP.

Located in Durban, SAPREF contributes about nine percent to South Africa’s gross domestic product. The refi nery also manages and operates the single buoy mooring (SBM) on behalf of various petroleum companies. About 77 percent of South Africa’s crude oil imports are handled through the SBM.

Mohale, who joined Shell on 1 January 2009, has been at the helm of the South African company during one of its most challenging periods to date.

During 2010 we focused on

bedding down the system, so we’re

now reaping the benefits

of a simplified, uniform platform which ultimately

ensures a stronger focus on the customer


“The global economic recession had a profound impact on the oil industry,” says Mohale.

He elaborates that oil prices peaked at about $147, then halved from over $120 a barrel the previous year to just below $60 per barrel in the middle of 2009.

Against this backdrop, the company revised its short-term strategy to focus on reducing costs and generating cash.

“The recession led to the market for our products collapsing, while our margins remained under severe pressure since our cost base had increased substantially. The matter needed to be addressed with great urgency hence the emphasis on cost management.”

The focus on cash, Mohale explains, stemmed from a number of large projects that Shell’s Upstream business had embarked on that require significant cash injections for many years before they start to generate profits.

Mohale set tough targets for his leadership team to ensure the company survived the recession and was able to take full advantage of an anticipated economic upswing.

“Each Shell business and support function had to implement specific cost saving measures,” he says. “In addition, we implemented a freeze on all non-contractual spend – unless it was Health, Safety, Security & Environment (HSSE) or business critical. We also placed a moratorium on most business travel and, regrettably, we also had to reduce our headcount by about 200 staff.”The Retail business made deep cuts to its marketing budget by reducing sponsorship activities and exploring synergies across the different businesses to integrate marketing campaigns. The business also re-negotiated agency retainer fees to reduce costs.

The Commercial business launched an asset-neutral project to improve

5www.southafricamag.com

Shell FEATURE

competiveness and also expanded its Deliver for Own Account (DFOA) model whereby a Shell distributor delivers product to customers on a commission basis.

The Supply and Distribution (S&D) business set about renegotiating all its primary road transport contracts, while simultaneously reducing its vehicle fl eet by about 20 percent. S&D also reviewed the company’s depot footprint in the process to optimise its network, eliminate ineffi ciencies and

reduce costs.“It was a grueling

year, but we ended 2010 on a high note,” says Mohale enthusiastically. “We achieved all our numbers, especially our profi t targets and most other business objectives.”

But three accomplishments in particular stand out for Mohale. For almost two years, Shell South Africa had been implementing Downstream-One, a global project that introduces simplifi ed processes and systems. The new system,

Across the world Shell is concentrating

its Downstream footprint on those markets that are considered core and where the

company has the right combination of growth potential

which includes a SAP platform, went live on 1 October 2009.

“During 2010 we focused on bedding down the system, so we’re now reaping the benefits of a simplified, uniform platform which ultimately ensures a stronger focus on the customer,” Mohale says.

Shell is also the first international oil company operating in South Africa to achieve a Level 3 Broad-Based Black Economic Empowerment (BBBEE) contributor status.

Mohale says this was achieved through a concerted transformation programme, underscored by the employment of young black women through the company’s graduate recruitment programme and the development of black entrepreneurs through

Shell’s retail network programme. “We are proud of this accomplishment because it is a key milestone in our ongoing journey to build capacity and ensure meaningful participation of previously disadvantages individuals and groups in the economy.”

This achievement is, however, preceded by several other transformation milestones.

In 1998, Shell South Africa embarked on a refinery processing deal with its BEE partner, Thebe Investment Corporation. This deal was followed by an aviation marketing joint venture with Thebe in 2001.

In 2002, Thebe acquired a 25 percent interest in Shell South Africa Marketing (Pty) Ltd and in 2008 Thebe’s equity participation was extended to Shell’s entire


Shell FEATURE

P14687 VPN AD 82.5x117.5 P.indd 1 1/11/11 11:13:42 AM

I M P R I N T I N G Y O U R I M A G E

Contact us: 021 505 2200Contact us: 021 505 2200

p r i n t @ u s s g r a p h i c s . c o m

w w w . u s s g r a p h i c s . c o m

LITHO | WEB | SCREEN | DIGITAL | F INISHING

AS SPECIALIST LARGE AND SMALL FORMAT LITHO, WEB, SCREEN AND DIGITAL PRINTERS COVERING THE FULL SPECTRUM OF THE PRINT/ADVERTISING MARKET WE ARE PROUD TO BE ASSOCIATED WITH SHELL SA.

WE ARE PRIVILEGED TO INCLUDE THEM IN OUR CLIENT BASE OF BLUE CHIP COMPANIES.

The company is 100% owned, managed and controlled by entrepreneurial Black South Africans emanating mostly from the Engineering disciplines, with sound corporate background and impressive business qualifications. The guiding philosophy of management is to deliver tangible benefits to clients in chosen markets and to create value at shareholder, managerial and operational levels.

MADLANDUNA Corporation has extensive experience in

delivering projects within the petroleum sector. The company has executed projects for Shell SA Marketing (Pty) Ltd worth in excess of R200 million in the past four years. Services offered have ranged from engineering design work to project management work. Work completed has been in the following disciplines:• Electrical engineering• Mechanical engineering• Civil & Structural engineering• Project Management

The type or nature of the work completed or currently underway is in

the following broad areas:• New fuel tanks (2 x 10 million litre) installations at Alberton depot • Bund wall design and installation• New COC facility• Rail siding fall arrestors• Storm water management plans• Power Supply and Motor Control Centres• Acculodes, control and instrumentation systems for fuel loading gantries• Lighting and Earthing systems• Fire fighting systems

Health, Safety, Security and Environment (HSSE) issues always feature

prominently in the work that we do. This is particularly important in the petroleum industry because we have to work in environments that contain hazardous products. Consequently, we often conduct HEMP (Hazards and Effects Management Plans) and HAZOP (Hazards and Operations) studies to mitigate and/or eliminate project and operational risks.

Cost Management forms an important and integral part of our project management plan as well. We strive to achieve

project and business objectives at the least cost possible. This is achieved by ensuring that engineering designs are innovative and efficient, that planning is rigorous and that project execution is disciplined.

Amongst engineers and project managers at MADLANDUNA Corporation, there is 112 years experience in executing projects. The team is comprised of registered engineers, professional construction managers and project managers.

The company is well equipped to continue to provide Shell with engineering and project management services in a professional manner. MADLANDUNA Corporation will, as it always does, ensure meticulous planning and flawless execution in all the projects.

For more information please contact Sandile Magenuka. Tel:+27 11 783 4949 Fax: +27 11 783 9814.E-mail: [email protected] Sandown House, Sandton Close 2, Corner off Norwich Close & 5th Street, Sandton.

www.madlanduna.com

Sandile Magenuka - Director Pr. Eng, B Sc. Eng, MBA

Mthunzi Luthuli - MDB Sc. Eng, MBA

MADLANDUNA Corporation Meticulous Planning, Flawless Execution

Madlanduna_DPS.indd 2-3 26/1/11 14:26:45

The company is 100% owned, managed and controlled by entrepreneurial Black South Africans emanating mostly from the Engineering disciplines, with sound corporate background and impressive business qualifications. The guiding philosophy of management is to deliver tangible benefits to clients in chosen markets and to create value at shareholder, managerial and operational levels.

MADLANDUNA Corporation has extensive experience in

delivering projects within the petroleum sector. The company has executed projects for Shell SA Marketing (Pty) Ltd worth in excess of R200 million in the past four years. Services offered have ranged from engineering design work to project management work. Work completed has been in the following disciplines:• Electrical engineering• Mechanical engineering• Civil & Structural engineering• Project Management

The type or nature of the work completed or currently underway is in

the following broad areas:• New fuel tanks (2 x 10 million litre) installations at Alberton depot • Bund wall design and installation• New COC facility• Rail siding fall arrestors• Storm water management plans• Power Supply and Motor Control Centres• Acculodes, control and instrumentation systems for fuel loading gantries• Lighting and Earthing systems• Fire fighting systems

Health, Safety, Security and Environment (HSSE) issues always feature

prominently in the work that we do. This is particularly important in the petroleum industry because we have to work in environments that contain hazardous products. Consequently, we often conduct HEMP (Hazards and Effects Management Plans) and HAZOP (Hazards and Operations) studies to mitigate and/or eliminate project and operational risks.

Cost Management forms an important and integral part of our project management plan as well. We strive to achieve

project and business objectives at the least cost possible. This is achieved by ensuring that engineering designs are innovative and efficient, that planning is rigorous and that project execution is disciplined.

Amongst engineers and project managers at MADLANDUNA Corporation, there is 112 years experience in executing projects. The team is comprised of registered engineers, professional construction managers and project managers.

The company is well equipped to continue to provide Shell with engineering and project management services in a professional manner. MADLANDUNA Corporation will, as it always does, ensure meticulous planning and flawless execution in all the projects.

For more information please contact Sandile Magenuka. Tel:+27 11 783 4949 Fax: +27 11 783 9814.E-mail: [email protected] Sandown House, Sandton Close 2, Corner off Norwich Close & 5th Street, Sandton.

www.madlanduna.com

Sandile Magenuka - Director Pr. Eng, B Sc. Eng, MBA

Mthunzi Luthuli - MDB Sc. Eng, MBA

MADLANDUNA Corporation Meticulous Planning, Flawless Execution

Madlanduna_DPS.indd 2-3 26/1/11 14:26:45


Shell FEATURE

value chain by acquiring 25 percent of Shell South Africa Refi ning (Pty) Ltd, which owns Shell’s refi ning interests in the country.

Shell also actively supports various social investment programmes with specific emphasis on environmental conservation, education and capacity building. By way of example, last year Shell signed a three-year multi-million rand partnership with Food and Trees for Africa (FTFA).

“The FTFA partnership will see a substantial greening programme being undertaken at 200 under-resourced schools across the country. Some 10 000 trees will be planted at these schools and numerous organic food gardens will be developed to support learner nutrition,” Mohale says.

The third noteworthy highlight for 2010 is that Shell achieved its highest ever Brand Preference score. “A score of 34 percent fi rmly entrenches our position as

South Africa’s preferred fuel brand,” a delighted Mohale adds. “This proves that we are living up to our commitment to meet and exceed customers’ requirements for energy products, which we have done through extensive research, understanding customer needs, and providing the right products

to meet these needs.”Mohale cautions, however, that as

signifi cant as the achievements are, complacency must never be allowed to creep in. “Our competitors will do their best to match our successes. But let me assure you, Shell people – as always – are up to the challenge.”

Beyond South Africa’s borders, in the midst of an already tough year, Shell announced in April 2010 that it would be divesting from 19 countries in Africa where it has Downstream operations. Only Shell South Africa was not included as part of the divestment review, although its LPG business, known as Easigas, was included.

We’re in business to

win

11www.southafricamag.comwww.expresspros.co.za blog.expresspros.co.za 0800 006 085 (Toll Free)

ceed

• Xpectations

Our promise is to serve you reliably, consistently, and personably with up-to-the-minute employment services and impeccably professional business standards.

Permanent & Professional Staffing

Employment Relations

Time & Attendance

Training Services Outsourcing

Call Centre Staffing

Recruitment Services

Assign Services is a proud service provider to Shell South Africa

Assign Services provides tailored-made, flexible solutions to companies on a national basis, specific

to their short, medium and long term needs.

MANAGED STAFFING SOLUTIONS

RECRUITMENT SERVICES | PAYROLL OUTSOURCING

PROPERTY CARE | CLEANING & HYGIENE SOLUTIONS


Mohale explains the decision is in line with a global Shell Downstream programme, The Three Keys to Winning, which drives the group’s selective growth ambitions, its desired footprint and its focus on operational excellence.

“Across the world Shell is concentrating its Downstream footprint on those markets that are considered core and where the company has the right combination of growth potential, supporting infrastructure, concentration of assets, people and brand strength.”

Shell is currently in exclusive negotiations with two joint buyers for the entire portfolio of African countries. Shell previously announced that the key features of a deal it is aiming for is one in which Shell would retain a shareholding in the businesses and the Shell brand would remain across most businesses and products including Retail and Lubricants. The company is also seeking to keep its current organisational structure

Shell FEATURE

largely in place, thereby minimising potential job losses. Looking ahead to 2011, Mohale is optimistic that Shell South Africa will once again deliver on its various targets.

“HSSE remains our first and most important priority, since running our business safely is the cornerstone of everything we do. Our goal to ensure zero harm to people and the environment is an absolute imperative so that everyone gets home safely.”

Mohale says that an immediate and urgent challenge for Shell South Africa is to ensure uninterrupted fuel supply to commercial and retail customers. In addition, the marketing businesses will focus on profitable volume growth and increasing brand visibility and market share through fuel launches and site upgrades.

“Operational excellence will remain a key theme with various targets set across the different businesses to improve the efficacy

Leading Logistics provider to the Fuel and Chemical Industry in

Southern Africa.Our track record speaks for itself

Gold Award – Logistics Achiever Awards 2010Gold Award – Logistics Achiever Awards 2009Gold Award – Logistics Achiever Awards 2008Gold Award – Logistics Achiever Awards 2007Gold Award – Logistics Achiever Awards 2006Silver Award – Logistics Achiever Awards 2006Bronze Award – Logistics Achiever Awards 2006Silver Award – Logistics Achiever Awards 2005Gold Award – Logistics Achiever Awards 2004Silver Award – Logistics Achiever Awards 2004

LAA Enviro Award 2010

Consumer Goods Council Awards 2010 for the Best Green Project - over R10 million

Focus on Excellence Awards: Best Transport Operator of the Year2006 | 2007 | 2008 | 2010

Award-winning Supply Chain Solutions from

To read more about our Supply Chain Solution successes please access www.unitrans.co.za

The Spirit of Can Do

C

M

Y

CM

MY

CY

CMY

K

1949 Unitrans LAA Ad 117.5 x 82.5mm.pdf 1 2011/01/18 9:39 AM

of our operations with particular emphasis on cost management and compliance with business principles and guidelines.”

He adds that the people-related focus areas are on improving change management and accelerating training and competence programmes for staff.

“We’re in business to win,” concludes Mohale. “The operating environment is tough and highly competitive, but our people have the requisite expertise, acumen and can-do attitude to rise to the challenge and ensure Shell remains South Africa’s leading oil company.” END

of our operations with particular emphasis

PRAGMAPragma is proud to be associated with

Shell, as their strategic partner for physical asset management services. The service

has bloomed into a comprehensive Facility Maintenance contract for Shell’s Retail and

Commercial sites in Southern Africa, and an Asset Care Centre for all Shell’s African

distribution depots. During this tenure Shell has experienced a sustained improvement of

equipment reliability and service levels.

South Africa Magazine, Suite 9 and 10, The Royal, Bank Plain, Norwich, Norfolk, UK. NR2 4SF

TNT Magazine, 14-15 Child’s Place, Earl’s Court, London, UK. SW5 9RX

ENQUIRIESTelephone: 0044 (0)1603 343267Fax: 0044 (0)1603 283602 [email protected]

SUBSCRIPTIONS Call: 00441603 [email protected]

www.southafricamag.com

The Campus, Twickenham57 Sloane StreetEpsom Downs, BryanstonJohannesburg, 2021South Africa

Tel: +27 11 996 7000Fax: +27 11 996 7777

www.shell.com/home/content/zaf/

Documents

SHELL FEATURE