Glencore’s Astron Energy has invested billions in overhauling its petrol station network in South Africa. The brand is also looking to expand its footprint and compete with traditional oil giants BP and TotalEnergies.
Since buying American giant Chevron’s Southern African assets in 2017, Glencore has pumped billions into the business and is reaping the rewards.
Its Astron Refinery in Cape Town is able to produce 100,000 barrels of refined petroleum products a day. It produces petrol, diesel, jet fuel, and liquefied gas for local use and export.
Glencore CEO Gary Nagle said the refinery is cash-generative for the company and is pleased with its operations following the commodity giant’s results earlier this year.
The Swiss-based company has significant operations in South Africa outside of Astron, ranging from coal mines to aluminium smelters.
Despite not being a South African company, Glencore has a strong connection with the country through its leadership and history.
The company’s past two CEOs were born and raised in Johannesburg. They rose through the ranks of the company to eventually lead the world’s largest commodity trader.
Ivan Glasenberg, the man who made Glencore into what it is today, grew up in the Johannesburg suburb of Illovo and was educated at Hyde Park High School.
Glasenberg attended the University of the Witwatersrand, which would become a training ground for many of Glencore’s commodity traders.
He made the company in his image, with many of its best traders a replica of Glasenberg – a South African accountant with an insatiable appetite for work.
Glasenberg climbed the ranks as a coal trader before becoming CEO and turning Glencore into a blue-chip company listed in London.
‘Mini-Ivan’ Gary Nagle, also a Wits-trained accountant, took over the position of Glencore CEO in 2021 when Glasenberg retired.
Glasenberg, now worth $8.8 billion (R160.1 billion), regularly visits his relatives in South Africa.
Nagle remains fiercely defensive of South Africa, seeing massive potential in the country. Following BHP’s attempted takeover of Anglo American, Nagle made a clear statement of support for his home country.
Nagle praised the tax regime and said infrastructure and power problems in the country were manageable.
“If you look around the world, we have seen changes in royalties across the board — except for South Africa. They have not touched royalties and taxes,” he told the Financial Times.
“Yes, it has issues on infrastructure and power, but the industry can work together to deal with that.”
Nagle added that there had been “recent strong improvements” at state-owned rail operator Transnet. “We think Transnet will go to a public-private partnership and will continue to improve.”
Glencore has put its money where its mouth under Nagle, pumping money into South Africa through Astron Energy.
Astron has operated in South Africa for over 100 years in various guises, starting in 1911 as the Texaco Company. Its retail business, Caltex, was launched in 1936 as a partnership between American giants Chevron and Texaco.
The company launched its refinery in Milnerton in 1966, with numerous upgrades being implemented since then.
In 2017, Glencore bought all of Chevron’s South African assets for $1 billion and set about rebranding its petrol station forecourts and the refinery to consolidate its brands under a single identity.
Since then, the Swiss company has pumped money into South Africa to upgrade and maintain the refinery while expanding its petrol station network.
Much of the attention has been focused on the rebranding of the 850 Caltex petrol stations around South Africa, with Astron seemingly painting the country orange.
This rebranding project has been underway since 2022, with over 300 stations being rebranded so far. On average, 20 sits are rebranded to Astron every month.
However, despite receiving much less attention, most of Astron’s revenue in South Africa comes from its refinery in Cape Town.
The refinery is the third-largest in South Africa and is estimated to generate R95 billion in value for the local economy and supports 56,917 jobs directly and indirectly.
“We have made significant investments in our refinery in Milnerton and our extensive retail network, which speaks to the solid future we envisage for our company,” Astron’s Communications Manager Suzanne Pullinger told Daily Investor.
“From a perspective of remaining in the country, we see a lot of upside in terms of the future prospects of the country, and we will probably be making additional investments into the refining capacity and energy securitisation in the country.”
Astron also operates a lubricants manufacturing plant in Durban, which it has invested heavily in to create a world-class facility able to produce 60 million litres of lubricants a year.
The plant produces Astron’s flagship brands such as Havoline and Delo, alongside specialised lubricants for industrial users.