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 Strategy
Focus Our marketing businesses, underpinned by world-class manufacturing, create customer value for BP. Our retail, lubricants and business-to-business sectors reach 13 million customers a day. Our retail strategy provides differentiated fuel and convenience offers to some of the most attractive global markets. Our lubricants brands, BP and Castrol, offer customers benefits through technology and relationships. We seek deep business-to-business customer relationships that can evolve into strategic partnerships. Growth in margins, combined with improved operating performance, led to a result of $3,689 million in 2003, a 77% improvement following a difficult 2002. BP achieved substantial gains in productivity throughout the segment. We continued our focus on cost efficiency. Gains were made possible principally through initiatives in procurement, information technology practices, commercial optimization contributions and the benefits of integrating the Veba business. Our performance in refining was underpinned by consistency in availability. This has collectively averaged 95.5% at our facilities in 2003, including record availability in the second quarter, compared with 96.1% for the whole of 2002. Refining throughputs were comparable with 2002, despite mandated divestments. We concentrated on optimizing our assets, capturing margin and leveraging our global scale and presence. Our customer-facing businesses – retailing, lubricants and business-to-business marketing – delivered higher profitability from a lower volume base as a result of our portfolio high-grading programme. BP's retail location sales continue to outpace the industry rate, despite slower growth in the US and German markets. As US and European economies recover, we expect to maintain and then grow our strong position through close management of our site operating models and differentiation in our customer offer. A clear example of this differentiation is the launch of our BP Ultimate gasoline and diesel fuel in the UK, Spain and Greece in 2003. These upgraded products deliver greater performance with fewer emissions than standard fuel grades, and have produced very positive early results with customers. The reimaging of retail locations, including the full conversion of all BP service stations in Germany to Aral, continued in 2003. A total of 6,326 sites were reimaged with the BP helios, bringing the total number of sites with the helios to some 16,745 worldwide. In our lubricants business, our Castrol and BP brands are recognized around the world. In 2003, we maintained, and in many cases grew, market share. We are now focused on pursuing key customer segments and markets in the lubricants sector – in which we believe that brand presence and customer relationships give us a premium position. Business-to-business activity strengthened in 2003, with a recovery in aviation fuels and the development of new partnerships and strategic relationships. These selected co-operations include joint technical developments, cross-marketing of products and services and the pursuit of common ground on environmental issues. |
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