Business Daily from THE HINDU group of publications
Thursday, Aug 30, 2007
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Business Daily from THE HINDU group of publications Thursday, Aug 30, 2007 ePaper |
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Marketing
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Retailing States - Tamil Nadu Essar’s flagship petrol station in Chennai
R Balaji Chennai, Aug. 29 Essar Oil Ltd is set to inaugurate a flagship petrol station, its first in Chennai. According to company spokespersons, construction work on the retail outlet for automobile fuel coming up at Anna Nagar is at an advanced stage and likely to be completed in less than two months. Payback Period
Such an outlet, a ‘showcase piece’, is promoted as a ‘destination point for multiple activities’ — apart from petrol and diesel sales, facilities would include an ATM, ‘a decent eating point’ etc, the officials said. Essar Oil’s petrol stations are all franchisee-operated and the company has three models. Land cost apart, franchisees have the option to set up a mini outlet with an investment of about Rs 12-13 lakh; a regular at about Rs 20-22 lakh; or a premium outlet costing more than Rs 30 lakh. Essar’s business model for such retail outlets emphasises on a fast return on investment with a payback period of less than four years. A flagship outlet can cost more than Rs 60 lakh, and Essar has very few of them. In Tamil Nadu, there is one in Chennai and another in Tirupur. Essar has been steadily ramping up its presence in petrol stations in Tamil Nadu but focussed mostly on small towns and cities, and in Chennai it has till now stuck to the suburbs, where it has five outlets. It has over 55-60 outlets in the State and another 25 are in various stages of construction. According to officials, Essar plans to set up about 350 petrol stations in South India — 240 are in operation and the rest are under construction.
More Stories on : Retailing | Petroleum | Tamil Nadu
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