Eastern Withdrawal for Chevron

Following review, company will shift focus from East to West Coast, Southeast

By 
Angel Abcede, Senior Editor/Tobacco, CSP

SAN RAMON, Calif. -- After review of its U.S. portfolio, Chevron has decided to withdraw its motor fuels operations in some areas of the eastern United States, including Delaware, Indiana, Kentucky, North Carolina, New Jersey, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, Washington, D.C., and parts of Tennessee. Approximately 1,100 independently owned and operated retail stations will be debranded.

The San Ramon, Calif.-based company said that it expect all of the stations to continue operating under other brands and to have programs in place to [image-nocss] assist retailers with the transition. It expected to complete the planned market exits by mid-year 2010.

"We're always looking at our business," Gus Santoyo, public relations manager for global downstream at Chevron, told CSP Daily News, which reported on the move in a Flash on Friday. "Globally, we've made divestments in certain areas and acquisitions in others. It depends on how it plays to our strengths."

"Recently, we conducted a U.S. review and decided there were better ways to align our marketing operations with our manufacturing-system assets," he said. "In doing so, we've decided this is the best action at the current time. We have no plans for other withdrawals. It's just that we've got a long-range, strategic plan. Now, there are definitely economic dynamics especially the [global] ones of late, and we are making sure we are quickening the pace of our strategic plan so we're in line with the current economic environment. But we're not doing anything different."

He also said, "If you look at the states we're leaving, we're not in the top position or we have fairly low market share. We're focused on areas where we do have strength. The West Coast is one of those. We'll also remain in many parts of the SoutheastFlorida, Georgia, Mississippi, Louisiana, Texas.... We do plan to continue to grow the brand [in places] where it makes sense."

Santoyo added, "These [stations] are all independently owned and operated, and we'll be assisting them to debrand and to operate with other brands. We're hoping to get it done by the end of the second quarter."

The stations account for about 8% of Chevron's total U.S. sales volumes, the company said. The fuel markets in these states are well served and should not be affected by our withdrawal, it added.

Chevron continues to supply more than 5,000 Chevron and Texaco branded stations in the eastern United States, and it will continue to develop and grow its retail presence in other areas of the U.S. marketplace, said the company.

Chevron's lubricants operations in the Eastern United States and at the Pascagoula refinery will continue operating as usual.

Chevron continues to look at its portfolio and seek ways to better align its marketing assets with its Manufacturing system to improve efficiencies, increase enterprise profitability and maintain a strong position in the U. S. marketplace. Optimizing our system in this manner means shrinking in some areas, while growing or adjusting operations in others.

Angel Abcede, CSP/Winsight By Angel Abcede, Senior Editor/Tobacco, CSP
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