46 / 113
Others
PAL is GB Auto’s lubricants business,
distributing GazpromNeft Lubricants
at GB Auto-branded and third-party
points of presence in the Egyptian
market under an exclusive strategic
alliance with Gazprom Neft. The com-
pany announced in January 2014 that
it entered into an exclusive strategic
alliance to distribute Gazprom Neft
Lubricants, giving GB Auto access to
a 400-450 tons per year market that
grows at an annual pace of 2-3%. The
company aims to take the partnership
to other regional markets, possibly
incorporating other lines of business
from Gazprom Neft’s downstream
portfolio, following a successful roll-
out in Egypt at both GB Auto-branded
and third-party points of sale.
GB Auto’s Retail arm operates retail
after-sales outlets, known as 360, to
distribute tires, tire parts, batteries,
parts and lubricants. These points of
presence also offer services including
tire installation, battery services, and
the sale and injection of lubricants in
select locations
The company’s western-style pre-
owned car operation, Fabrika, is now
operational at all GB-owned points of
presence in Egypt, with operations
having started in 2014 and the mar-
ket proving receptive. Management
anticipates further announcements
regarding product representations
within GB Auto-branded service cen-
ters and third-party points of sale in
the near future.
2016 Business Review
PAL operations showed substantial
and promising growth in 2016, as
revenues jumped 84.6% y-o-y in FY16
to LE 62.7 million compared to LE 33.9
million in FY15. The division has been
exhibiting steady growth since its
launch, but has recently faced com-
petition from multinational counter-
parts who produce locally and are not
subject to the same FX challenges.
GBAuto signedanagreementwithShell
in 2016 to supply GB Auto’s after-sales
service centers across its brand portfo-
lio with motor oil, which is expected to
boost the company’s bottom line.
Fabrika recorded sales revenue
increases of 184.1% y-o-y for FY16,
with its top line coming in at LE 1,19.3
million compared to LE 42.0 million
last year. The business began record-
ing net operating profits for the first
time in 1Q16 and has remained on a
steady path of growth since, with the
company continuously expanding
its product and services offerings to
1.4
%
2016 ANNUAL REPORT
44
Our Business Units