Mumbai: Bharat Petroleum Corporation Ltd (BPCL) has launched a pilot project to construct cinema halls at its petrol pumps along national highways, as part of a strategy to derive 30 per cent of its revenues from non-fuel sales.
Situated in the vicinity of BPCL's 'Ghar' petrol pumps, the halls will screen movies and programming beamed via a satellite network.
According to Keshav Shenoy, general manager, highway retailing, BPCL, this will directly increase non-fuel revenues for the company. BPCL is aiming at road travellers, in addition to localised communities to partake in its entertainment offerings.
George Paul, general manager, says that gradually, BPCL's petrol pumps are becoming happening places, and the company needs to leverage its customers for non-fuel revenues, which offset a large degree of risk that arises from government administered fuel prices which are later compensated by the ministry through issue of oil bonds.
For the venture, BPCL has partnered Cinemata, a subsidiary of Sony Entertainment Television, to source content for its amphitheatres, which will be open-air so as not to 'intimidate' customers, and which will accommodate a seating capacity for 200 people.
BPCL has 7,800 fuel outlets across India, and presently makes about Rs 180 crore from these initiatives, with margins ranging from 7-8 per cent. Some pumps at prime locations near New Delhi earn about Rs 140 per square feet, which is a major accomplishment for the PSU oil major.
BPCL is seeking to tap the forecourt customer, ie vehicle owners filling petrol or diesel, to buy other products and offerings. Till now, BPCL has averaged about 5-10 per cent, and hopes to achieve the international average of 25-30 per cent within the next five years.
Additionally, the Ghar outlets will provide the services of a barber, a doctor on call, and a launderette, said Paul. Covering an area of 3-5 acres, the outlets are being set up along national highways at a distance of 250km. Forty per cent of the Ghar will be designed for re-fuelling, with the remaining 60 per cent free for non-fuelling revenue generation.
BPCL's highway retail has also caught the interest of big format retailers, such as Bharti-Wal-Mart, Carrefour and the Aditya Birla group's Trinetra, which have their own agendas for the project, which range from interests in BPCL's real estate, prominent display of brand names, etc.
However, discussions with them weren't fruitful, as the companies could not synergise with BPCL's plans. Instead, BPCL is now partnering food chains such as McDonald's, Pizza Hut and Subway, which has drawn many first time customers who come in to refuel. Dealer consortiums are encouraged as a means to source supplies, with the company stepping in at times to derive pricing.