McAleese Group may park Cootes trucking brand

McAleese Group, owner of the Cootes fleet, is planning to restructure its fuel distribution business. Photo: Michael Clayton-JonesThe Cootes trucking brand may be scrapped by the McAleese Group almost 50 years after it was founded, as the group tries to restore its reputation following last year’s fatal fuel tanker crash in Sydney.

McAleese, which bought Cootes from private equity group CHAMP in 2012, is considering renaming its fuel distribution business McAleese Oil & Gas as part of a restructure. It expects to make a decision on the brand name by the end of March.

McAleese executive chairman Mark Rowsthorn said it was reassessing the branding of Cootes’ fuel tankers and the age of its fleet and customer service as it tried to retain key clients such as Caltex.

Caltex has been developing its own fuel transportation business, revealing on Monday it had bought the fuel division of privately held transport group Scott’s for $95 million. The purchase includes 28 service stations and 18 fuel depots, mostly in regional Victoria, South Australia and NSW.

Mr Rowsthorn expressed surprise at the acquisition, telling analysts he had only learnt of Caltex’s purchase on Monday morning, and had not discussed it with Caltex.

”At first glance, I don’t think it’s an issue with our contract, but clearly it’s too early to tell,” he said.

Along with Origin Energy, Caltex is one of Cootes’ most important remaining fuel customers after the company lost a national transport contract with Shell last month to rival Toll Holdings.

Cootes has also lost BP’s NSW fuel distribution contract, which is being retendered nationally.

Toll said last week it was hopeful of winning the national BP contract.

Analysts said while Cootes’ Caltex contract was for distribution in metropolitan areas, not regional areas, the Scott’s purchase could make it more difficult for McAleese to renew the contract when it expires in March 2015.

”We believe this presents a risk for Cootes,” Deutsche Bank analyst Cameron McDonald said.

Caltex Australia chief executive Julian Segal said the group would consider renewing Cootes’ contract. ”If Cootes would be in a position to reassure us of the reliability and safety of the trucks then they would be considered,” he said.

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