Business Strategy

Ultragaz

Ultragaz continued to intensify its actions focused on innovation and increased proximity to its customers in the business, household and reseller segments. In 2021, it renewed its brand image and summarized its strategy in the phrase Somando Energias (Combining Energies), which represents its purpose of improving people’s lives by using its experience and capacity to innovate in creating energy solutions for individuals and businesses. It seeks to achieve this purpose through annual launches of solutions in the customer segments for industry, commerce and services, agribusiness, and condominiums and households. One of the highlights in 2021 was the launch of the agribusiness solution called Ultragaz Secagem de Grãos – Arroz (Ultragaz Grain Drying – Rice), which, by using temperature and humidity sensors, controls the grain drying process, thereby optimizing energy consumption and reducing costs for the farmer. 

In addition, it continues its pathway to increasingly digitize its solutions, enabling the evolution of its relationship strategies with customers in the business, household and reseller network segments.  At the end of 2021, the Ultragaz app, launched the previous year, had recorded over 1.7 million downloads. With regard to its infrastructure, the start-up of bottling operations in Miramar (PA) and storage and distribution in Mucuripe (CE), in the first quarter of 2022, will allow Ultragaz to participate in the expected expansion of the LPG markets in the North and Northeast regions of Brazil.

Ultracargo

The investments in capacity increases and productivity gains in Ultracargo resulted in increased efficiency and value generation for customers, and contributed to the record revenues recorded in the last quarter of 2021. The company continued with its objective of expanding its activities in strategic port terminals, especially in the North and Northeast regions, and of increasing the size of its port operations to capture opportunities in the bulk liquids handling sector. In 2021, it accelerated the completion of the expansion project in the Itaqui port terminal (MA), which added 46 thousand m³ of capacity, and it made a successful bid in an auction for a concession in an additional area in the same port for the construction of a new terminal, which will be connected to the existing one and will add a static capacity of 79 thousand m³. The start of operations at the new terminal in the port of Vila do Conde (PA) was also brought forward by one year. It has a capacity of 110 thousand m³, and marked Ultracargo’s market entry in the North region of Brazil. The other priorities of the company are the continuous improvement of its operations, based on the lean production and six sigma concepts, and the digital transformation of its business activities.

Ipiranga

Ipiranga is committed to the continuous evolution of the value proposition of the complete service station, and one of its priorities is to leverage operational and logistical efficiency. In 2021, the company’s focused on restructuring the Transport, Planning and Logistics Execution areas and reviewing two of its main processes: advanced model of sales and operations planning (S&OP) integrated to its strategy, and order to cash. Another strategic pillar is pricing. The company has already achieved an improvement in margins after establishing an area dedicated to Pricing Intelligence. 

To increase the quality of its network, and the services provided to consumers, the company has carried out a number of initiatives including establishing an exclusive relationship strategy for large resellers. Ipiranga also aims to selectively expand its network, in line with its plans to increase efficiency. In 2021, Ipiranga closed down 340 service stations and opened 337, so at year-end the network consisted of 7,104 units, only three less than at the previous year-end. Using an approach that it calls “engagement through enchantment” the company is committed to strengthening the value of its brand in the eyes of its main stakeholders (employees, resellers, business customers and end consumers). In 2021, the Ipiranga brand was elected the 13^th most valuable brand in Brazil in the ranking published by the Interbrand consultancy. 

The strategic pillars of the AmPm business are aimed at strengthening the value proposal for franchisees, consolidating company-owned stores, improving the quality of the services offered through a differentiated consumer experience and exclusive own-brand products, and operational excellence. The plan to gradually expand the network will focus on quality and increasing the number of stores near the distribution centers. In 2021, AmPm made good progress in refurbishing its stores and in incorporating its digital package, which together improve the consumer’s experience and strengthen the brand’s presence in a variety of channels. The company also accelerated the program of opening company-owned stores, enabling it to continually develop the package of solutions offered to franchisees. By December, the company had implemented the new AmPm store concept in 162 stores, incorporated the digital package in 450 stores, and increased the number of company-owned stores to 206.

KMV/abastece aí

The E-aí Clube de Automobilistas (E-aí Motorists’ Club) is a digital platform that combines the KM de Vantagens loyalty program and the abastece aí digital payments app. The platform upgraded and strengthened its technology in 2021, and ended the year with 2.8 million active accounts in the digital wallet and 36 million registered customers in the loyalty program. The platform has been run independently of Ipiranga since 2020 and its operational strategy is to continually improve the user experience when filling-up with fuel, increase the partner base and invest in the ongoing development of new products and services that are important to the motorist and the surrounding mobility eco-system.

Public policies and the regulatory environment

The Ultra Group has an Institutional and Governmental Relations area that reports to the Corporate Development and Advocacy Executive Directorate. The area monitors regulatory issues and public policies to identify those that could impact the strategy, prospects and results of the Group or the individual companies in the portfolio.

The area’s work includes relations with many different stakeholder groups (government authorities, representative associations, the media and opinion makers, academia and organized civil society) and these interactions are carried out in accordance with the best practices in ethics and integrity, such as the formal registration of meetings in a dedicated system, and with the support of the compliance team.

Some of the most important themes currently monitored by the team are as follows: tax simplification; combating the irregular marketing of fuels; infrastructure; energy transition; and bio-fuels. read more information on these latter two topics

The simplification of taxes in the sector, which is supported by the Group, would have positive effects on the efforts to combat irregularities in the fuel market, such as: tax evasion; adulteration of fuels; and volumetric fraud (tampering with the pump and the amount of fuel supplied). These irregularities cause damage to all the participants in the fuel distribution value chain. The government receives less tax, regulated resellers and distributors lose revenue and consumers purchase lower quality or less fuel.