Maxol to spend £9m to upgrade filling stations in Republic

IRISH oil company Maxol will invest £9 million this year to upgrade its filling stations in the Republic, as part of a £30 million four year programme. The firm had a turnover of £210 million last year, though pressure on margins on both sides of the Border, meant that group pre tax profit was lower than the £3 million recorded in 1994.

The petrol trade in Ireland is very competitive and very small. Maxol suffered substantial losses in the late 1980s because of price controls in the Republic. It invested heavily in Northern Ireland at a time when motorists were crossing the Border in large numbers to buy petrol.

Since then, the firm's fortunes have changed significantly. All the key sites in the Republic are scheduled for development.

There was a time when petrol in the Republic was over £2 a gallon more expensive than in Northern Ireland. One Maxol station just north of the Border had a weekly turnover of £30,000, while another just south of the Border, had sales of just £2,000 per week.

Maxol built a string of stations on the northern side of the Border. Now petrol prices have evened out and the swing has gone the other way. As redundant forecourts have again become viable, Maxol is revamping them and giving them top priority. New stations in areas such as Donegal are also being opened.

Maxol believes its image has to be up graded. Forecourt facilities have been poor in many cases. All major towns in Leinster have been targeted, though Maxol 55 it is not just chasing population.

One of the biggest developments will be in Westport, Co Mayo. By the year 2000 all major Maxol stations will have been revamped. They will contain new pumps, shops and car washes and all the other facilities which are now expected on large forecourt. The investment programme has been almost completed in Northern Ireland where Maxol claims top class network.

The firm has conducted training courses for its staff. Incentive schemes have been introduced. "We believe in the local independent petrol retailer. Our experience is that the small man produces the best results," said Mr Tom Noonan, general manager of Maxol, which is owned by the McMullen family.

"There is a trend to have large oil companies operating filling stations. We question that. Our competitors are some of the largest companies in the world. We can be sharper on our feet."

Since 1990, as Border controls were removed, Maxol has been trying to integrate its northern and southern subsidiaries. Unlike many of its larger competitors, Maxol conducts all Ireland marketing promotions. Its gift catalogues and stamps are interchangeable.

"In the past, Maxol has viewed promotions as a cost effective way of making up for marketing deficiencies. Now we need to offer a complete package - competitive prices, as well as sophisticated forecourts and shops," Mr Noonan said.

Maxol's home heating operation is not as big as the petrol retailing side of the business, which accounts for over half of all group sales. The company has 30 home heating distributors in the Republic and 15 in Northern Ireland.

Diesel is a growing part of the business, while petrol sales are largely static. Industrial fuels and lubricants are other areas of operation.

Kerry and the satellite towns in Dublin are targeted for expansion by Maxol. "A lot of these towns are in fairly inaccessible locations and there are two car families. We're happy to locate wherever there are lots of chimney pots," Mr Noonan said.

Surprisingly, filling stations in towns which have been bypassed can benefit from the new roads, he said. Freed of traffic congestion, motorists are more inclined to get their petrol there.