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Business

BP taps local distributor AKR to open Indonesian gas stations

Convenience stores planned in effort to challenge state-run leader Pertamina

A BP logo is seen at a filling station in London.   © Reuters

TOKYO -- British oil major BP looks to open roughly 350 gasoline stations equipped with convenience stores in Indonesia over 10 years, teaming with local conglomerate AKR Corporindo to cater to drivers in Southeast Asia's largest new-car market.

The Indonesian partner will take a majority stake in a joint venture, with initial plans for 14 directly managed sites selling BP-brand oil starting in the second half of next year, AKR CEO Haryanto Adikoesoemo told The Nikkei during a visit to Japan. Franchise locations will be added later.

AKR, a distributor of petroleum products, operates around 130 filling stations in Indonesia under its own brand. Adikoesoemo said the company hopes to meld its transportation network with BP's brand appeal and convenience store know-how. Indonesia presents a major opportunity, as the country has only about 6,000 gas stations -- not enough for its needs, he said.

AKR Corporindo CEO Haryanto Adikoesoemo sees room for growth in Indonesia's retail gasoline market.

BP stations specialize in high-value-added products such as high octane gasoline and lubricants. The company hopes to whet the appetites of middle- and upper-class consumers by adding food, drinks and daily necessities.

Just this year, the British company acquired the retail service station business of Australian retailer Woolworths. BP is widening its footprint in the Asia-Pacific region and, a spokesperson says, sees Indonesia as a sure bet for growth.

Private-sector operators have made little headway into the country, where the bulk of gas stations are run by state-owned oil company Pertamina. Among other rivals, British-Dutch oil major Royal Dutch Shell operates only about 80 locations. BP thinks that combining fuel and retail will help increase its Indonesian locations' earnings potential, helping it penetrate the market.

Elsewhere in Southeast Asia, Japanese convenience store chain Lawson is teaming with gas station operators opening more locations in Thailand, while compatriot FamilyMart Uny Holdings does the same in the Philippines.

(Nikkei)

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