Engen seeks to expand bakery footprint

Isaac Pinielo | Friday June 5, 2015 16:01

Corner Bakery is a brand exclusive to Engen in the petroleum retail forecourt market.

In the latest annual report of 2014, Engen’s management indicated that Corner Bakery aims to become the largest bakery food service brand in sub-Saharan Africa by 2015. According to Engen managing director, Chimweta Monga, the company’s bakery division will continue to be a strong differentiator in the company’s convenience offering. “This has given us a strong competitive advantage as no other oil company offers a similar product. We expect to grow the Corner Bakery footprint,” he enthused.

Monga indicated that the Corner Bakery brand is growing rapidly, attracting a loyal following for its fresh food and bakery products such as pies and bread, with some stores selling more than 1,000 loaves of bread per day.

“We will therefore be rolling out more stores in 2015. All new Engen service stations with Quick Shops will also include a Corner Bakery as part of their initial design,” he said. Monga pointed out that the company’s retail division performed well ahead of the market, achieving growth of around four percent and reaching its targets for the year.

He attributed this to the advantages of the Quick Shop and Corner Bakery offerings, ongoing training of staff at the retail outlets and the ability to meet consumer demand for fuel in peak periods.

“All Quick Shops performed well. We intend to have three new service stations and two with Quick Shops, scheduled to come on stream in 2015,” said Monga.

He noted that the company was involved in a number of promotional activities during the year in order to increase sales at its retail outlets. The expansion of the bakery division is in line with Engen’s network growth, which included the opening of a new retail outlet in December in Ghanzi.

The sale of bakery category products in the forecourt convenience market was pioneered by Engen South Africa in the mid 1990s. Since then, the Corner Bakery brand has been expanded into Namibia, Botswana, Zambia, Mozambique and Mauritius. The brand plans to expand into all African countries in which Engen has fuel outlets, including Zimbabwe, Tanzania, Kenya, Democratic Republic of Congo, Burundi, Rwanda, Equatorial Guinea and Ghana, amongst other sub-Saharan countries.

In the meantime, the company’s financial statements for the year ended 31 December 2014 show that revenues declined by 0.8 percent from P2.62 billion in 2013 to P2.60 billion in 2014.

The decline was attributed to the decrease in the international oil price which also resulted in gross profits declining by 26.9 percent from P247.4 million in 2013 to P180 .9 million in 2014.

“We were however also negatively affected by the weakening of the local currency against the Rand. However, mitigation plans have been put in place to hedge against losses resulting from foreign exchange contracts,” said the MD.

He assured shareholders that Engen, which is the only oil company listed on the Botswana Stock Exchange (BSE), will improve its performance in the year ahead. He also said the company is planning to increase its profit and add more value in order to pay a healthy dividend for its shareholders.