The whole matter began in 2004 when BP Malaysia and LTAT concluded talks to sell BP's 70% stake in BP Malaysia Sdn Bhd to LTAT. (Ref: Gulf Oil and Gas, 3rd January 2004. LTAT To Purchase BP's Shareholding In Malaysian Fuels Business.) From the press release, we now know that this 70% was taken up by LTAT's subsidiary company, Boustead Holdings Berhad.
Boustead Holdings is an established conglomerate in Malaysia. From the Company Profile on its official website:
Boustead Holdings Berhad, one of Malaysia’s oldest diversified conglomerates, was founded in 1828. Listed on Bursa Malaysia in 1961, Boustead today has 133 subsidiaries of which 3 companies are listed and 16 associate companies of which one is listed and has total assets in excess of RM8 billion and more than 12,000 employees. The major shareholder of Boustead today is Lembaga Tabung Angkatan Tentera (LTAT)
The group chart of Boustead Holdings Berhad is impressive and can be found here. Other businesses in the group include banks, insurance, cargo freighting, paints, tertiary education, and many others. But it was only in 2005 when Boustead Holdings Berhad acquired its 70% stake in BP Malaysia Sdn Bhd, and began the ball rolling on its venture into the world of petrol retail. By August 2006 Boustead Holdings Berhad would announce, that its venture into petrol retailing was profitable, contributing "handsomely" to its coffers. It would also launch a new fuel, Infiniti. (Source: BHPetrol News and Media Archives, 10 August 2006. Boustead awaits SC nod for Islamic REIT listing.)
SAP, a leading provider of enterprise resource planning (ERP) software, provides some details of BHPetrol's success story. (Source: SAP website. Boustead Petroleum Marketing: Oil and gas firm handles expansion with SAP (R) application management.) BHPetrol has a revenue of US$450 million and employs 200 staff. It offers the following products and services: "Gasoline and diesel fuel, liquid petroleum gas, and engine lubricants". In another SAP report, "Success Story", it was reported that BHPetrol's yearly revenue hovers around the US$658 million mark. (Source: SAP. Boustead Petroleum Marketing: SAP (R) consulting helps oil and gas player pull off rapid implementation.) Apparently SAP's ERP solution paid off as one employee was quoted: "The SAP software is much more user-friendly than
our legacy solution".
BHPetrol also upgraded its pay-at-the-pump solution by subscribing to Verifone's Linux-based OP 4100. From a case study report at Verifone's website:
The OP 4100 is the first pay-at-the-pump device with an EMV-approved contactless solution, and as such was the first to follow and utilize the card association’s most stringent hardware specifications.
With VeriFone’s OP 4100 and PAYware EMS configuration, BHPetrol has created the unique customer payment experience it wanted to set it apart from the competition. The company is now able to deliver consumer messaging directly at the pump — via a central server to individual stations or system-wide. Operations can use the same system to deliver security and programming updates. Overall, the PCI PED approved OP 4100 system has proven to be exceptionally customizable and easily managed with in-house resources and,
most importantly, it has provided the control, security and image BHPetrol was after.
To date, BHPetrol has retrofitted nearly 800 of its Dresser Wayne and Gilbarco pumps. And thanks to the ease and simplicity of the OP 4100 retrofit solution and re-installation of the data cable, the stations were upgraded at an amazing rate. Taking just 30-45 minutes to completely fit and configure two OP 4100 modules into a
dual-sided pump, BHPetrol was able to upgrade three stations per day. That’s 24 OP 4100 installs in one day, with the typical station having four dual-sided pump islands (eight OP 4100s per station).
With such an innovative approach, combined with VeriFone’s unique solution, BHPetrol has efficiently and successfully positioned itself
in Malaysia at the forefront of secure payment technology, customer service and marketing.
By May 2008, Boustead Holdings Berhad would state in its press release that its petrol business had contributed to a "marked increment in segmental contribution" to the group revenue. (Source: Boustead Holdings Bhd website. Boustead first quarter profits up 138%.) From the same press release:
Since its inception as a modest trading entity for more than 180 years, the Boustead Group has grown by leaps and bounds to comprise more than 80 subsidiary and associate companies, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group's operations are focused in six key areas; plantation, finance & investment, property, manufacturing and services, trading and heavy industries. As at 31 December 2007, Boustead Holdings Berhad combined paid-up capital is RM315 million, while its shareholders’ funds stands at RM2.5 billion. Market capitalisation currently is in excess of RM3.3 billion.
BHPetrol also benefits from Boustead Holdings Bhd's ownership of Affin Bank. In November 2006, BHPetrol announced that it was working with AffinBank and MasterCard to introduce PayPass, a credit card utilizing a contactless payment system for purchases below RM110. (Source: Daily Express (Sabah), 9 Nov 2006. AffinBank and BHPetrol launch contactless fuel card.) The report also quoted BHPetrol managing director Tan Kim Thiam saying: "We are opening about 10 to 12 service stations a year."
In its 2008 Annual Report, Boustead Holdings Berhad also states: "BH Petrol is already exploring prospects tomake further inroads into the liquefied petroleum gas segment." (Source: ListedCompany.com. Boustead Holdings Berhad Chief Executive's Review: Extracted from Annual Report 2008.)
BHPetrol's loyalty points program utilizes GHL Systems Berhad's NetTransact PivotPoints Loyalty Solutions. GHL System Bhd lauds its work for BHPetrol as a success story. From the GHL website:
BHPetrol is one of the first companies in Malaysia to use GPRS as a method of communications to carry the transactions from the point of origin (the petrol station) to the heart of the communications network located within the BHPetrol headquarters in Menara Maxis. This opened up new vistas of opportunity especially in areas where physical phone lines (last mile) may be scarce. Additionally, BHPetrol was one of the first in the industry to utilize wireless credit card terminals in their forecourt.
PivotPoints Loyalty Solutions is built on GHL Systems' NetTransact platform, the most cost-effective integration and application platform available for building new, custom applications and integrating existing applications and infrastructure. NetTransact is specifically designed to reduce costs, enable growth, and jumpstart innovation. Over the years, newer or enhanced PivotPoint modules were added upon the existing BHPetrol's NetTransact platform from time-to-time, allowing BHPetrol to keep up with ever-changing business requirements.
(Source: GHL Systems Bhd. Nettransact Pivotpoints Loyalty Solutions Success Story: BP Malaysia's BHPetrol Ecard Loyalty Program.)
In light of its shareholding structure, being 30% by LTAT and 70% by Boustead Holdings Berhad, it can be said that BHPetrol is a 100% Malaysian-owned company. In September 2007, the Star reported that BHPetrol would not make race a criteria for applicants who wished to operate a BHPetrol petrol station. The announcement came about after Democratic Action Party Youth chief Nga Kor Ming "told reporters that he had received numerous complaints that non-bumiputras were not considered for a licence to operate a service station". (Source: The Star, 12 September 2007. All can apply to operate BHPetrol service stations now.)
Finally, in its 2008 Annual Report, we find some recent news about BHPetrol. It remains profitable despite challenging times.
Boustead Petroleum Marketing Sdn Bhd (BH Petrol) posted a smaller profit as a result of substantial inventory holding losses. BH Petrol invested a total of RM38 million to strengthen its market position in the retail petroleum, liquefied petroleum gas (LPG) and lubricant businesses. A significant portion of this investment was for the acquisition and construction of twelve new service stations strategically located across Peninsular Malaysia.
Meanwhile, BH Petrol’s brand awareness and market acceptance continue to be enhanced via effective marketing programmes. Testament to this is the growing popularity of its Infiniti brand of petrol based on customer feedback and increase in customer usage.
We also remain committed to growing our non-fuel business, specifically the service station’s retail segment. In the LPG segment, BH Petrol completed the acquisition of the remaining 50% of the LPG bottling plant in Pasir Gudang.
(Source: Bursa Malaysia website. Boustead Holdings Bhd 2008 Annual Report, from Cover to page 34.)