Dec. 24, 2013
Cosmo Oil Co., Ltd.
Showa Shell Sekiyu K.K.
Commencement of Discussions Concerning Integration of LPG Retail Operations
Cosmo Oil Co., Ltd. (Head Office: Minato-ku, Tokyo; President, Representative Director, Chief Executive Officer: Keizo Morikawa; hereinafter, “Cosmo”), Showa Shell Sekiyu K.K. (Head Office: Minato-ku, Tokyo; Chairman, Representative Director, Chief Executive Officer: Shigeya Kato; hereinafter, “Showa Shell”), and Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Kuniharu Nakamura) have agreed to begin discussions on the integration of their domestic liquefied petroleum gas (LPG) retail operations owned by their respective corporate groups.
- Background and objectives
Demand in the domestic LPG market continues to remain sluggish due to accelerated energy-saving efforts and competition with other energy sources including electricity and city gas. At the same time, as an environmentally clean distributed source of energy, LPG still serves as an important source of residential energy for 25 million households nationwide.
Under such circumstances, Cosmo, Showa Shell, and Sumitomo Corporation will integrate their LPG retail functions with the aim of further streamlining their sales and logistics networks in their LPG retail operations and expanding their customer base. In addition, by proposing value in their home solutions and energy solutions business fields, they will also strive to develop their LPG retail operations on a sustainable basis and establish a structure that ensures a safe and secure supply of LPG to customers.
The following operations will be considered for integration.
- LPG retail operation of the Cosmo Oil Group
- LPG retail operation of Enessance Holdings Co., Ltd. (Established in 2008 by Showa Shell and Sumitomo Corporation with equity stakes of 51% and 49%, respectively; hereinafter “Enessance.”)
- Structure for discussion
An Integration Examination Committee will be established in order to discuss the type of integration, corporate business strategy/management structure, governance structure, and other matters. Specific details of the integration will be decided upon during the discussions.
- Planned future schedule
April‒June 2014 Conclusion of a basic agreement
October‒December 2014 Integration of retail functions and commencement of sales operations
*The integration will be implemented upon approval by relevant authorities.
1. Framework for the integration of LPG retail operations
|2. Outline of the integrated retail company’s LPG business|
|Sales||： Approx. 60 billion yen p.a.|
|Direct retail customers||： Approx. 240,000 users|
|Main sales regions||： Hokkaido, Tohoku, Niigata, Kanto, Chubu, Kyushu|
Corporate Communications Department,