Caltex Australia head speaks up to define its corporate image

Julian Segal, head of Caltex Australia’s only listed oil refiner and a leading transport fuel supplier, says his company has to overcome an image problem. He went on to correct some perceptions that he hopes to change. Segal asserted that Caltex business is about the sourcing of product, distribution of product and supply to the customer. “That’s what Caltex has been doing for the past 100 years …that’s what our strength has always been,” he explained.
Caltex currently supplies 30% of Australia’s transport fuel, which is likely to place the company as the fourth-best performer of Australia’s top 100 stocks this year, with an increase of 62%. The company supplies fuel to more than 2,000 petrol stations and owns an extensive distribution network, including import terminals, pipelines and barges that supply the retail, mining, transport, aviation and marine industries.
The Caltex refinery business has run second to the marketing and distribution business in terms of profit for the past five years. This is significant because Australian refineries are unable to compete with the larger and more efficient refineries in Asia. Segal explained that if five of the eight refineries due for closure remain open, then Australian refineries are expected to supply only 40% of the country’s transport fuel needs by 2020, down from 95% in 2000. He reiterated that Caltex began in 1900 as an oil importing company and therefore does not consider moving away from refining as a great leap. Segal emphasized that for Caltex, what is important is the ability to source the product and possess the distribution capability to bring it where it’s needed.
Caltex’s marketing and distribution business is forecast to make a record A$730 million-740 million (US$760 million-779 million) profit, while the refineries contribute A$100 million (US$105 million) due to the strong performance at Lytton and improved refining margins. (December 28, 2012)