Londis in forecourt deal with Texoil for 20 stores

WHOLESALE FOOD and drinks group ADM Londis has signed a deal with fuel distributor Texoil to operate forecourt shops at 20 new Texaco service stations.

Londis said the new stores would generate annual retail turnover of €50 million and create 300 jobs.

The new filling stations will be predominantly located in Munster and the west of Ireland and are part of a joint €25 million investment by the companies.

The first three stations will open in June at Foxford, Co Mayo, Lemybrien in Waterford and near Monaghan town. The station at Lemybrien will have parking for 23 trucks, shower facilities and a restaurant.

Ten sites will open this year with the same number in 2009. The stations will be a mix of existing forecourts and greenfield locations.

Londis already operates 80 forecourt shops with a number of fuel companies, including Top, Esso, Campus and Statoil.

Wholesale turnover at ADM Londis grew by 6 per cent in 2006 to €355 million and it operates more than 370 convenience stores.

"Texoil has very ambitious expansion plans and we're glad to have been chosen as its retail partner," said Stephen O'Riordan, joint chief executive of ADM Londis. Mr O'Riordan said the forecourt shops would focus on "fresh food and food to go".

Texoil was formed in 1995 and is one of Ireland's leading fuel distributers. It is jointly owned by Chevron (Ireland) Ltd and Irishman Tom Kirrane. It employs 160 staff at depots across the country. Latest accounts for Texoil show that it achieved a pretax profit of €2.4 million in 2006 on turnover of €207 million. The company buys 90 per cent of its fuel from Chevron.

Mel Lundy, Texoil's head of retail, said the move into operating forecourts was a response to the effect of alternative fuels on its traditional home heating oil business. "That's a market that will get tighter over time," he said.

"We feel we have the expertise to drive the retail business forward and be a major player in the forecourt market."

Mr Lundy said Texoil hopes to have a network of up to 50 sites within five years. "We will be very aggressive in our expansion," he said.

Its move comes as Chevron Texaco exits the retail forecourt market here. The California-based company is expected to sell its 35 company-owned service stations over the next 18 months, although it will continue to supply fuel to this market and to licence the Texaco brand to station owners.

Londis will publish its 2007 results on April 29th. Mr O'Riordan said it was a year of growth but declined to provide specific numbers.

In relation to 2008, Mr O'Riordan said that "business was reasonable at the moment" against the backdrop of a slowing economy.

"There's a bit of pressure on footfalls and I think this will be a year of consolidation," he added. "It [the economic slowdown] has to have some impact on retail."

Londis expects to add 40 more stores to its chain this year.