Business Overview
In the Petroleum Business, Cosmo Oil, a core company of the Cosmo Energy Group, is mainly engaged in crude oil procurement, production, distribution, and importation and exportation of petroleum products. Cosmo Oil Marketing, which is also a core company, sells Group products, including petroleum products, to corporate and individual customers.
Business Strategy
As the production and sales division for petroleum products, the Petroleum Business ensures world-class, stable operations and stable supply to customers, providing value ahead of competitors by developing brand products that address the diverse needs of customers given the accelerating trend towards decarbonization. At the same time, we are developing products and deploying services by seizing business opportunities, including the shift to EVs and the expansion of green electricity, the development and popularization of new fuels such as SAF*1, as well as the expansion of CASE*2, MaaS*3, cashless payments, and so on.
Identified Risks
- Risks related to crude oil price and crude oil procurement
- Risks related to petroleum product prices and demand
- Risks related to accidents at and leakage from refineries and other facilities
- Risks of business continuity associated with rapid environmental changes
- Risks related to book value devaluation of inventories due to a decline in profitability
Opportunities
- Globally accelerating trends toward carbon neutrality and measures for shifting to a decarbonized society Measures for shifting to a decarbonized society
(initiatives regarding the shift to EVs, green electricity, and new fuels) - Recovery in demand for jet fuel attributed to the relaxation of COVID-19 border controls
- CASE (mobility supply, maintenance, etc.) trends
- Changes in customer trends, digitalization, and the wider use of cashless payments
Strengths
- Maintaining high operating rates at refineries despite declining demand
(a supply shortage position associated with fuel supply to Kygnus Sekiyu) - Reinforcing connections with customers, and presence of connections with service station dealers as our partners
- Development of brand products
(Commitment Compulsory Car Inspection, Cosmo Denki (Electricity), Yasashi (friendly) Car Sharing, and Cosmo My Car Lease) - High level of customer satisfaction, diversification of payment methods, and value creation focused on branding activities
In our Oil Refining Business, we began supplying fuels to Kygnus Sekiyu in FY2019, and were able to do so without lowering the operating rates at our refineries despite us maintaining a supply shortage position. We believe that, amid the ongoing consolidation of the oil industry, our strategy of placing importance on the supply-demand balance has proved effective.
In the Petroleum Sales Business, we launched Cosmo My Car Lease in FY2014 in response to the changing environment surrounding , and the in FY2019 on the back of the trend toward digitalization. Furthermore, we will continue to address diversifying car life needs by expanding Cosmo My Car Lease Store nationwide as a specialty store for vehicle sales.
In the Electricity Retail Sales Business, we began to sell and Cosmo Denki Green for households in FY2019. Further, from FY2020, we began to provide Cosmo Denki Business and Cosmo Denki Business Green services to our corporate customers. In September 2021, we released , a one-stop solution to help companies and local municipalities introduce and effectively utilize renewable energy and EVs for a decarbonized society.
*1 SAF: Sustainable Aviation Fuel This fuel is produced mainly from biomass-derived raw materials, including plants, as well as waste and waste food oil from restaurants and households. It enables the reduction of CO2 emissions compared to fossil fuels.
*2 CASE: An acronym for Connected, Autonomous, Shared & Services, and Electric.
*3 MaaS (Mobility-as-a-Service): A next-generation transportation service that combines conventional means of transportation and traditional transportation services with various technologies, such as automated driving and AI.