The FINANCIAL — “There are many speculations on the financial crisis, but we believe that the environmental crisis that is still to come will have no less of an impact on every country in every continent,” LukOil’s Deputy Director says in an interview with The FINANCIAL.
“According to our internal statistical data the consumption of the fuel is steadily stable. No dramatic increases or decreases have been recorded unlike the earlier period in August and September, when sales dropped significantly,” Gocha Sultanishvili, LukOil Deputy General Director, told The FINANCIAL. He added that as of today the Georgian economy is not suffering as badly as in other countries. “We have been receiving substantial injections of donor funding as a sign of good will and support.”
“As in any other sector in Georgia and around the world, the petroleum market is experiencing difficult and unstable times. In addition to the global impact Georgian importers of petroleum products had to make an effort to overcome the August-September crisis to find ways to supply local market. We successfully managed to control the situation and keep up with demand. Our team is closely monitoring both international and domestic developments so that we are in the loop.”
Q. Georgian consumers of petroleum products have a choice to make as a number of solid brands are present on the local market. So why should they choose LukOil Georgia?
A. The main reason for why customers should choose LukOil’s fuel is the quality. This is the first and the most important factor which at the same time is the principal one in our view. No matter how well you try to present something, if the quality is not of the highest standard then there is no chance of getting even close to lead position.
Our fuel is of the highest European standard and there is no question about it. Together with this quality we also offer high quality service.
At LUKOIL Georgia we believe that we have a very special approach to customer care. We will not diminish the merits of our competitors, and thus, can talk only about products and services that we provide to our consumers. On a daily basis our company serves thousands of retail and corporate clients. In order to be more responsible and responsive to what people’s needs are we were the first petroleum company to introduce a hotline where every client can call and share with us their opinions, ask for assistance or urge us to resolve certain situations. We enjoy compliments, but on the other hand we have a very strict and critical assessment procedure for our staff, especially operators, who have direct contact with consumers. Even though we run the biggest network of gas stations, we are still working hard to enlarge it both in the capital and regions so that we are better accessible and visible to the whole population.
During the most turbulent and stressful conditions of the month of August there was not a minute when LukOil Georgia closed down any of its gas stations. On the contrary, we felt we had to work even harder and support the Government of Georgia in keeping up the spirit and confidence among regular citizens by providing an unlimited supply of petroleum products.
Q. What’s been the impact of the global financial crisis in your particular case?
A. Oil and gas issues are becoming more and more important as we see the downfall in the world economy brought on by the financial crisis. At the moment we very much depend upon the situation on the international market. The usual trend under the circumstances that is likely to affect the sector is the decrease of prices on petroleum products. Though there are always factors that may hinder this process.
Q. Many companies around the world and in Georgia are being forced to dismiss staff due to financial constraints. What about the employees of LukOil Georgia?
A. LukOil Georgia pays special attention to the management of human resources. The company employs up to 1,000 people. For years we have been putting in place strong mechanisms to protect our staff, create a safe and healthy working environment, provide a competitive benefit package to increase motivation and productivity. All these efforts cannot be wasted and we will continue caring for these people who have been loyal to the company and excelled in their everyday work. We will go through the difficult times together because the management of LukOil Georgia strongly believes in investing in people, giving them opportunities to learn and grow as the company evolves and expands.
Q. Can you expand more on the pricing policy of LukOil Georgia and what would be your forecast of the nearest future?
A. We are frequently approached with questions on current as well as upcoming prices of fuel and other petroleum products. We very much depend upon the price fluctuations on the international market. With the ongoing market downfall fuel prices are inevitably decreasing, and our customers have noticed that LukOil Georgia is following this trend through lowering local prices.
However we have to bear in mind that there is another important factor that determines pricing policy on the petroleum market. These are changes in the exchange rate of the local currency against the USD. We are importing our goods from Europe paying in a foreign currency, therefore any rise or fall will have its say in payment transactions. This will automatically reflect on the prices.
Q. We are talking about the financial crisis and economic downfall, but LukOil Georgia is growing and innovating. Your company announced about the introduction of a new, revolutionary product. Tell us more about it.
A. EURO 5 is a new generation of fuel specially produced for the European market. It is extremely environmentally friendly without any harmful emissions; therefore it is safe for humans and the nature surrounding us.
We are positive that Georgian drivers will appreciate the costs and benefits of EURO 5 as by buying a certain quantity they will be able to cover longer distances in comparison with ordinary fuel. EURO 5 will save money and also the time that drivers would otherwise spend repairing their vehicles.
Georgia is the first country in the region where EURO 5 will become available. By having EURO 5 Georgia is taking one step forward towards the west.
Q. You mentioned that EURO 5 is an environmentally friendly type of fuel. Why do you put so much emphasis on this?
A. Due to the peculiar nature of this activity any petroleum company should bring environment and safety issues to the top of their list of priorities. With current global climate change this is even more important. There are many speculations on the financial crisis, but we believe that the environmental crisis that is still to come will have no less of an impact on every country in every continent.
EURO 5 is a clean product indeed and in addition to its technical superiority it will make a difference in the long-run when we become mature enough to address pollution issues, especially in Tbilisi with our increasingly heavy traffic.
Q. What about your plans in both the short and long-term?
A. LukOil Georgia is oriented towards growth and expansion. We are always looking at ways to better perform, but not in the self-centred sense of the phrase, but rather to improve for the sake of the market and consumers. We are always building high expectations and from there it takes much effort not to delude anyone.
In the upcoming year 2009 we will be putting more of an emphasis on the environment and education as well as sport and healthy lifestyle. Our corporate and social responsibility aspects will still be at the top of our agenda.