BY MAUREEN N. MARATITA
IP&E which does business as Shell the Northern Mariana Islands has confirmed that Delta Management Corp. is managing its five gas stations.
Delta took on management from Oct. 1 of the Dandan Shell station as well as continuing to manage stations at Highway Express, Puerto Rico, San Roque and Susupe.
Brian J. Bamba, managing director of IP&E Holdings LLC, which does business as Shell, told the Journal, “We’re focusing on the existing network and maybe making some improvements.”
The long-term arrangement will have advantages for Delta and James T. Arenovski, its president, Bamba said. “It may allow Jim to not only scale up his business and make a little bit more investment in the convenience operations, but the market is a lot smaller.”
Shell did not need multiple operators, he said. Bamba said Arenovski was not only an excellent operator, but the relationship with Delta was also a long one.
“He’s won awards not only within his own operations, but he’s been recognized on larger stages as an agent for us,” Bamba said. “He has a really good management team.”
As to the market, Bamba said, “It works to our advantage right now. During the slow time we’re focusing on positioning ourselves for when the volumes do turn around.”
The petroleum market had dropped considerably, he said.
Petroleum products was one of the top imports to the NMI, accounting for 13% in 2017 — other than jet fuel, aviation gas and propane. As to consumption, Bamba said, “We saw a large proportion of our volume drop.”
However, he said, while the bottom line was an issue, “We focused on the health and safety of our people. We really took care of our people and encouraging them that the protocols we put in place to take home with them, so that they could take care of their families as well.”
Future growth may come, he said, “I wouldn’t rule that out.” Shell would reconsider in the future what that growth meant in terms of volumes to its network, he said. “If it warrants in the future, we’ll build brand new sites.” The former station sites are “well beyond their prime,” he said. In addition, Bamba said, “The density of the population has shifted around.”
Shell would look at traffic patterns in the future he said, as well as economic activity, government activity, housing and “maybe places like Kobler and other places around the island where we really don’t have a presence.”
As the economy recovers, he said, “It presents us with opportunities to look at revitalizing our network.”
Given its group presence in the Micronesian region, Bamba said, “We’re constantly looking at ways that we can improve our business presence as well as our reach of products and services that we provide.”
Supply and distribution into other islands is a challenge, he said into other islands such as Tinian. “We’re looking at it — often. I think it’s a breath of fresh air that the military is going to build up in Tinian and that’s prompted us to look at things.”
In Guam, Shell has added value to its C-stores.
“When we started what I would call the transformation of the convenience store industry on Guam, we knew that at the time that the stores that were operating at the Shell service stations were tired and there wasn’t a whole lot of focus paid to them.”
Shell launched Foody’s in 2014. Aside from varied food with a focus on health, the six restaurants also offer natural ingredients in shakes and smoothies. “They’re really a pleasant success for us,” Bamba said. “We’ve developed an offer our customers find very attractive and bring a lot of convenience and premium product and service to the market.”
In addition, Shell has rebranded its loyalty program as PACIFICPOINTS; customers can also accumulate points from IT&E as well as Foody’s. Bamba said although the customer base was loyal to Shell’s Lucky 7 point program, “It also needed to evolve into something a lot more automated … . We also wanted to bring new value.”
Foody’s price point is user-friendly. “We try to do as much as we can to bring value to our customers,” he said. “We’ve worked with a lot of local distributors to ensure that we have that offering and we’re competitive.” Foody’s had also shifted attention to the driver, he said. Foody’s now has nine locations in Guam.
Bamba said the Saipan market is significantly different from Guam when it comes to convenience stores, but that the present time would be appropriate to build foundations. “There’s a lot of mom-and-pop convenience operations; … the competition’s a little bit different.” There is the potential for growth,” he said.
Arenovski said the competition in Saipan is plentiful and includes medium sized supermarkets. Outlets carry value brands, he said.
“Those guys work on very low margins.” His stores take a different approach, he said. “We make sure we’re carrying known brands that people want as a convenience item. As a convenience store, we’re offering everything that people need — from the tobacco products to candy and chips.”
The Shell stores also offers unique products, he said. “We also made a decision a long time ago to do the wine and cheese, which has been very successful. We have the largest selection of beer, craft beer … over 40 varieties — imported from micro-breweries through the West Coast and mid-West.”
In addition to light fresh foods, the stores are now offering Triple J Payless Superfresh products, he said. “We’re trying to see how their sandwiches and basic salads go in a couple of our stations — Highway Express and Puerto Rico. These are high-quality sandwiches — chicken and Brie, turkey and Brie, pasta salad, Cob salad — these are great offerings for the people on the go,” Arenovski said.
“Every mom-and-pop store has the same stuff. We’re trying to differentiate ourselves and drive people inside the store,” he said. Staff are drawing customer attention to the new offerings, he said.
After 23 years in business, Arenovski said the Shell stations have always differentiated themselves.
“We have the cleanest bathrooms for example. We get compliments all the time on our friendly staff. They’re well trained; they’re engaging; they know the products in the store. We take great pride in making sure our staff engage with the customer.”
The result has been that the Shell stations are seen as a premium place to work for its under 50 employees. “We’re very selective in who we hire. We’re not looking for the ‘warm body.’” Employees are local, Arenovski said.
Lower gas consumption is understandable, he said. “People aren’t traveling as much; they have less money in their pockets.” People are buying according to need, Arenovski said.
Gas purchases are less frequent, he said.
The stations concentrated on pandemic adherence, he said. “We’ve gone through a huge amount of COVID protocol,” he said. “It hit home very early.” Most importantly, Arenovski said, “We don’t want the fueling experience to have any negative connotations or be a negative experience.”
Prior to Super Typhoon Yutu in 2018, Shell also had stations on Airport Road; in Gualo Rai on Middle Road; and in Koblerville on Beach Road.
Bamba said there was not a pressing need to re-open those sites, which had taken about 18 to 24 months to close and which still had some environment requirements from the Bureau of Environmental and Coastal Quality.
IP&E purchased the assets of Shell in Micronesia in November 2009. IP&E is a business unit of Prospector Investments Ltd.
Delta Management was formed in May 1998 and began doing business in Saipan in December 1999. mbj