Fifteen of them will be installed in the province of Pontevedra. The company expects to close 2021 with five new service stations: two in Vigo and the rest in Mos, A Coruña and Ourense.
Galicia is a mature market as far as traditional service stations are concerned, however, a niche is opening up in the territory for low-cost gas stations. Its low penetration in the community, with a 2% market share, together with the high price of fuels have become two catalysts for many operators to finalize their expansion plans in Galicia.
This is the case of Plenoil, which is underpinning its strategy to become a major player in the region with the opening of up to 35 automatic gas stations by 2023. The company specializing in the low-cost gas station segment has an ambitious plan ahead. If it currently has eight refueling points in Galicia, its intention is to finish this year, with less than a month to go, with five more. Two of these five openings will take place in Vigo: one at number 52 Rúa de Gandarón and the second at Estrada de Moledo.
The remaining three new gas stations will be located in the Concello de Mos, in the city of A Coruña and in the city of Ourense. In this way, the province of Pontevedra will add three new gas stations under the Plenoil banner to the four already existing in Meaño, O Porriño, Valga and Vilanova de Arousa.
“Galicia is a clear area of expansion because there has been very little competition and because prices are very high,” says Plenoil CEO José Rodríguez de Arellano. While the Galician market currently accounts for just under 10% of the group’s turnover, the executive estimates that it will exceed 15% of turnover by 2023. “We expect to be at 120 million euros of turnover in this market,” he assures.
Distribution of stations
Regarding the distribution of Plenoil’s low-cost gas stations, Pontevedra will be the winner with 15 new installations until 2023, another 10 will go to the province of A Coruña and the rest will be distributed between Lugo and Ourense. An expansion to which the group will allocate around 18 million euros and which will create more than a hundred jobs in the community.
Plenoil’ s low-cost gas stations are manned during the day and automatic at night. The company’s intention is to gain presence in the main cities of Galicia and increase its penetration in towns with more than 25,000 inhabitants, as well as in the main coastal towns, even if they do not exceed this figure. All of this is part of the company’s intention to grow in the national territory.
A proposal that aims to reach more than one hundred gas stations by 2021, 40 of which were installed this year. A deployment to which Plenoil allocated 20 million euros. But that’s not all, because the company will land in the Portuguese market in January 2022, after opening its first office in the country, in Porto, in November.
The low-cost fuel company closed 2020 with a turnover of 125 million euros, a figure it intends to more than double for the current financial year to 320 million euros. Plenoil closed last year with a gross operating profit (ebitda) of 6 million euros, which is expected to rise to 10 million euros in this year’s accounts. If the business plan is achieved, the company’s revenues would reach 550 million euros by 2022.
Arrival of low-cost companies
The low-cost gas station segment has abruptly burst onto the market with a proposal based on lower fuel prices than traditional service stations: “the average price is between 10 and 15 cents cheaper,” says Plenoil’s CEO.
The formula adopted by the company, according to the manager, is the reduction of margins: “We ended up with a final operating result of approximately 2 cents per liter,” says Rodríguez, who adds to the equation the rental of land as opposed to the purchase and the offer of only two products (diesel and gasoline), which he says reduces its structural costs.