CTX) in the marriage of convenience

The new agreement includes a number of elements that benefit from Woolworths' expertise in the food supply chain and Caltex's fuels

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A new key element is a new 15-year wholesale fuel agreement. the cost of fuel for the 638 sites owned or operated by Woolworths is estimated at $ 80 million per year.

In addition, Woolworths added 125 other Caltex sites to its fuel repurchase network and extended its Woolworths rewards program to over

and the third layer of the new relationship is an agreement of $ 500,000. long-term wholesale food supply for the entire Caltex network.

Indeed, Caltex secured its position as a long-term fuel supplier for the Woolworths sites at half the cost it would have incurred had the BP agreement been reached, while Woolworths increased the reach and value of its rewards program and added a new dimension and revenue to its convenience store offering.

Should Woolworths pursue the remainder of its response to the failure of BP's deal – which relates to an initial public offering of its fuel and related convenience business (while retaining the possibility of a commercial sale) – will have always mobilized a large mbad of capital to reinvest in its main high-yielding supermarkets, has distanced itself from a traditional source of volatility in its profits and created a scale for the logistical foundations of a local business of which Banducci has great ambitions. Although, at first glance, Caltex's result may seem "less bad" than the one it faced with BP's deal, there is something better than replacing a $ 150 loss of earnings. million by a loss of $ 80 million.

In anticipation of the loss of the Woolworths contract, Caltex had, of course, undertaken an acquisition strategy (Gull in New Zealand, Milemaker and Seaoil) to replace most of the expected benefits.

He has now secured his position as a long-term provider of Woolworths, the benefits of these volumes stemming from the cost of supplying his supplies to the impacts on his local infrastructure and his distribution chains.

The benefits exposure of Woolworths' loyalty and buyback programs acceded to the Woolworths food supply chain and reached an agreement to co-brand and roll out up to 250 new "Metro" convenience stores operated by Caltex on sites controlled by Caltex. . Julian Segal, CEO of Caltex, has doubled the group's exposure to the benefits of Woolworths 'loyalty and buyback programs, has acceded to Woolworths' food supply chain and has signed a partnership agreement with Julian Segal, Caltex's CEO, has doubled the group's exposure to the benefits of Woolworths 'loyalty and buy-back programs, acceded to Woolworths' food supply chain and entered into a co-brand agreement up to To 250 new "Metro" convenience stores operated by Caltex on sites controlled by Caltex

Photo: Dominic Lorrimer

This does not question Caltex's "Foodary" convenience offer , but strengthens the basics and

In preparation for an IPO of the company, Woolworths has inflated the management team for its fuel operations, appointing its director of development and development. Company, James Goth Angus Armstrong, Chief Operating Officer.

Should it be launched, the company would have more than 534 owned or operated sites across the country, with very competitive fuels and grocery stores. wholesale agreements and benefits of the ongoing relationship with Woolworths through loyalty and supply agreements. Woolworths having interrupted the growth of his network while the BP business was still alive, he would also have an organic growth trajectory, with Banducci saying that he was continuing to expand the network to ensure that the Customers of all Woolworth supermarkets have access to the fuel reduction offer from a nearby site.

Although Banducci has indicated that the IPO option could be executed in the next 12 months, the case that there was when the BP agreement was agreed late 2016.

Then Woolworths was under real pressure heavy losses on the home improvement experience of failed Masters and the cost of making itself competitive with Coles. After reversing the performance and profitability of the supermarkets, putting the disaster of the Masters behind him and curbing the disconcerting losses in his department store business at a discount, the need to free up cash and capital does not exist. is not as urgent today, even though the notion of exit from the fuel trade remains as rational as it was then