It’s not often jobs and fuel supply are paired together positively in the same sentence – but this month, as local company Caltex Eastern Cape Marketer (CECM) doubles in size, both job creation and access to fuel is set to rocket.
CECM yesterday launched its major investment in the Eastern Cape economy and labour market after purchasing 41 additional Caltex service station sites from Chevron last month in a deal totalling over R120-million.
Industry leaders and members of the business community came out in force to celebrate the ground-breaking deal which some, like head of the Nelson Mandela Bay Business Chamber (NMBBC), Kevin Hustler, hailed as “pioneering”.
“A deal of this magnitude, R120-million, is an immense contribution to the economy,” said Hustler. “We need robust commitment like this to create sustainable jobs in the Eastern Cape and the region.”
The move makes CECM, with 88 dealers and more in the pipeline, the biggest branded marketer in Chevron’s Africa Middle East Pakistan region. The impact for the province is staggering for job creation, local economic development and growth of the supply chain, especially for small and medium sizes businesses in the fuels industry.
“The deal is the result of the single biggest disposal by Caltex brand owner Chevron under the branded marketer programme,” said Clive Berlyn, CECM chief executive.
“All Caltex sites in the province are now supplied by a local East London company, which employs and develops local people, purchases from local suppliers and makes its corporate social investment in the province.”
The economy of the Eastern Cape benefits as profit from fuel sales that previously left the province now remains here, the company said.
Berlyn compared the latest investment to the pioneering deal of R10-million concluded in 2005 when CECM originally signed with Chevron – the brand manufacturers and distributors of Caltex products in South Africa – to become its first branded marketer in South Africa.
Its role is to supply fuel, quality assure service levels, support with training, business acumen and marketing efforts and ensure compliance to legal and best practice requirements for running a service station. In effect it is the custodian of the Caltex brand in this region. As the first master franchisor in South Africa, CECM – a level 3 BB-BEE contributor – has been the pioneer of this system for Chevron South Africa.
“During our trading operation during the first seven-year period we increased our volume of fuel delivered to retail sites by 80%, mainly in rural Transkei and surrounds. We started out with 34 sites and subsequently acquired another four from Chevron,” said Berlyn.
“We have since opened nine new service stations, of which 70% have gone to historically disadvantaged South Africans, covering almost all the rural areas of the Eastern Cape.”
In July 2012 a new agreement with Chevron saw an additional 41 dealers join the network, which now covers the entire Eastern Cape, including dealers in the two metropolitan municipalities.
John Hopkins – CECM Network Planner and Port Elizabeth sales manager – said opportunities for expansion were now on the cards and this would impact on job opportunities and development of the sector.
“We are a small organisation – compared with others – and there are some real assets in being smaller. We react quicker to queries, we are hands on with trucks and deliveries and we ensure that the fuel stations never run dry and that there is always a consistent supply,” said Hopkins, talking about the future of the organisation in the region.
“We are looking to expand the network – and we have an obligation to grow the linkages, multiply job opportunities and strive to give better service to our service stations. As such we are looking for opportunities to build, buy and assist in the development of service stations; not to mention the search for worthwhile occasions to give back to communities.”
Jabulani Mabasa, Chevron’s Branded Marketer Manager, said it was very proud to have chosen the “right person” in Berlyn to carry on its work in the province. “We don’t take this choice lightly, it took us 19 months to approve the marketer, and for us it was a no brainer, because of the type of people this organisation [CECM] has,” said Mabasa. “We would never give our brand to someone we cannot trust.”
CECM is strongly committed to the local Eastern Cape community, with a particular focus on education as key to the future development of the area. It also focuses on sport as a means of building individual character, a team spirit and a sense of self-discipline. In 2011 Corporate Social Investment spend was 2.1% of net profit after tax and in 2012 it is projected to be 1%.
Hustler added that he was encouraged to hear that profits would be ploughed back into the business and community. “This investment is a sign that people – domestic and international – have confidence in the Eastern Cape and are seeing opportunities and seizing them,” said Hustler, adding that the jobs created would fuel the economy into the future.
CECM endorsed this view: “Job creation is the critical need for South Africa at the moment, and particularly the Eastern Cape. The only route to true sustainable, job creation is through investment. The Eastern Cape has a viable economy and huge potential – but only investment can unlock prospects. This is why we have committed to the development of the province,” said Berlyn, paying tribute to his late partner and fellow founding director, Richard Ndungane, who “always shared the vision of expansion”.
“We are proud to have been entrusted as custodians of the Caltex brand in the Eastern Cape. The opportunities we create as we grow our business create benefits for the people of the Eastern Cape. We therefore welcome and encourage the people of our province to support us as we strive to support the community in the future.”