The FINANCIAL — Rompetrol Georgia, one of the leading oil importing companies, already has around 120,000,000 litre sales on the Georgian market. According to Dan Voicu, General Director of Rompetrol Georgia, in the year 2008 Rompetrol finished with 100,000,000 litre sales. “That was for 12 months, now in only 8 month we have already had a 20% increase in sales,” Voicu says.
General Director of Rompetrol Georgia says that the company is continuing to develop its network and its expectation in terms of volume will be quite high by the end of 2009. Dan Voicu, in his interview with The FINANCIAL declares that the company has been extremely innovative this year and will continue to offer even more innovations in the future as well.
Q. What new packages have you added to your retail services for the year 2009?
A. we are now closing the third quarter and all our operations are still in the initial budget. As you know one of the best features we launched on the local market in 2009 is the branded fuels under the label Efix, which was a great success for our network. Efix has two dimensions, one is for Euro Premium and the second for Euro Diesel, although it is quite a sophisticated product we manage to offer it at a very good price and consumers are quite responsive to this.
The other innovation is the Fill&Go programme which was launched in 2008. Corporate customers of Rompetrol benefited from this new product, thus we felt a strong increase in our corporate sales. Recently we launched a new programme, for the potential stations to be franchised under the Rompetrol brand. Today such stations are already active on the market under the brand Partner Rompetrol.
As well as all this we have a committed network development plan, which, I think, we properly succeeded to implement.
Q. You planned to open 5 new units to be launched on the market. How many new stations have you added to your network?
A. We managed to fulfil our network development plan for 100% , and for today we have 50 stations all over the country with 20 units in Tbilisi and I think our network is covering all the needs, in terms of the company and consumer as well. In these 50 units we include all our brands on the market, the classical Rompetrol stations, as well as the newly launched Partner Rompetrol and the small initiative – Rompetrol Express station.
Q. What can you tell us about Rompetrol Georgia’s CSR activities in 2009, what was the budget of CSR activities this year?
A. As you know we had one clear direction for the CSR activities and it was the focus on Children of Georgia, we usually like to call it Future of Georgia. We had several initiatives on the market and all of them were focused on the above mentioned central idea. Besides this we had strong involvement in the refugees’ funds. Â
Rompetrol Group had been actively cooperating with the TBC fund to help refugees from the occupied territories and for now the donated amount from Rompetrol to TBC fund is around GEL 1,000,000. As a first step, recently, at the beginning of the scholar year we, together with other partners of TBC fund, inaugurated a new school built for refugee children.
Q. The company estimated that total sales will reach 150 million litres in 2009. What can you tell us about this fact? Have total sales reached 150 million litres yet over the first eight months?
A. Rompetrol Georgia, besides its success on the local Georgian fuel market, it thought to be a very nice success story inside the Rompetrol group as well and for today, with a realistic estimation for 2009, sales should be over the initial figure of 150,000,000 litres.
Most probably we will go even another 10% over this initial estimate and as for the first 8 months of this year I think we already have around 12,000,000 litres imported on the local market, which, I think, gives us enough energy and resources to make sure the estimations for 2009 will be easily over boosted.
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Q. How have Rompetrol Georgia’s’ activities changed after KazmunaiGaz entered your company?
A. First of all, this change in the structure of shareholders happened in two stages. The first stage was in summer 2007 when KazMunaiGaz acquired 75% of the Rompetrol Group. Starting from that point, a proper partnership between those 2 companies was launched, and obviously we benefited from some synergies between the operations of the companies.
The second stage took place in summer 2009 when the Romanian Entrepreneur Dinu Patriciu sold its remaining 25% in the Rompetrol Group to KazMunaiGaz, so after this step KazMunaiGaz owns a 100% share in the Rompetrol Group. As for today, we feel that the company is in the state of optimization, in which we have a higher focus on performance indicators and less on development plans, as we used to have before now. I think together with the KazMunaiGaz Group our company is heading towards a positive position.
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Q. Dinu Patriciu, who sold his remaining 25% of shares in Rompetrol this year, has become one of the shareholders of People’s Bank in Georgia. In your view, why did he decide to sell his shares in Rompetrol and buy one of the banks in Georgia, can we say that the banking sector is more attractive nowadays?
A. I would say that Georgia in general is attractive and Dinu Patriciu is quite an active entrepreneur, always looking for new business opportunities. The Georgian business environment proved to be quite attractive for him and I don’t think that the banking industry will be his only presence here, in Georgia, and definitely we will see him involved in some other industries as well.
Q. In your last interview with The FINANCIAL you mentioned that the company continued to grow and that the crisis had no affect on your company’s operations. What can you tell us at the moment, are there any obstacles that your company is facing in regard to the economic crisis?
A. The year 2008 was a successful year but 2009 is, by far, even more successful, and as at our previous discussions, I will mention that there are no signs of the crisis in our company. Anyhow our industry is quite a major one in terms of daily activities and I think it’s not easy to feel high drops in the consumptions, but most probably, as I have mentioned before, diesel consumption for the high careers of the logistic and transportation industry in general has dropped. As we are focused more on the gas market, we may underline that we have felt no large effect from the crisis in our business.
Q. Rompetrol Georgia was the first largest importer of Euro Regular gasoline (RON 93) on the Georgian market. What can you tell us about this fact, how acceptable is RON 93 for your consumers?
A. Rompetrol is today the biggest importer of European fuel, so I think this is a summary of our efforts and performance for this year. Obviously our Euro Regular is our main product. It is probably more than 50% of our turnover but in general our mix of products is very well suited and designed for the local market. Efix Euro premium is another stronger component in our portfolio and the less active is Euro Super.
Besides these well appreciated fuels in the local market, we are also bringing the extreme quality of Euro Diesel. I would like to emphasize that we are not distributing low quality diesel. We focused our product portfolio on Euro products.
Q. Oil prices fell under USD 65 in London, amid weak energy demand in the United States, the world’s biggest oil-consuming nation, analysts said. What can you tell us about the existing oil prices in Georgia, how do they correspond to world market prices?
A. This is a hot current subject to discuss but I think that it is built artificially. As once mentioned, the Georgian market is quite responsive to international trends and in the last weeks or even month the international price has been quite stable with only minor variations. I think we can say that this has been reflected also on the local fuel prices, which for the recent period has been quite stable.
From case to case, there are lots of imputes in building the price: besides the international quotations, we are forced to consider the exchanges between the USD and local currency GEL, which has an impact on the price, and then from player to player in our industry there are logistic costs which are quite important.
We were focused on wholesale business around our terminal in Batumi which obviously gave us lower logistic cost. But today, as our operations are in the retail segment and when you speak about retail, practically we are forced to be focused on the Tbilisi market, which for us as a western importer of fuel, puts a high pressure on logistic costs.
I would like to remark on the efforts of the Georgian Government, as the excise level in Georgia is quite acceptable for the consumer. If you take a look at the western market, I can make a comparison with the market in Romania, from where we are importing fuel, there the fuel is more expensive. There is the same situation in neighbour Turkey, if you make a quick analysis, you will see that prices are quite a bit higher than in the Georgian market.
Q. What can you predict about the oil prices for the winter 2010, will they increase or decrease?
A. I think that the trend of the last 3 months and stable quotations for our industry will somehow remain the same for the following 3 month. So most probably we will remain in this interval from USD 60 to USD 70 per barrel, but as you know it is hard to predict prices as lots of international changes affect the price.
It’s hard to have clear expectations, but if there are no major changes in economics, I guess the prices will remain in the same range as now.
Q. Is Rompetrol Georgia going to offer some novelties to its consumers?
A. As we tried to keep a phase of innovations in our operations, I think today, summarizing the first 3 quarters of 2009 we may notice that we have been extremely innovative. At least every quarter we tried to generate some new product with these positive trends and apparently for the following quarters we will try to generate some new products and services as well, to keep up these positive trends.
I would not like to reveal the exact products but most probably we will try to put some focus on the quality and the origins of our fuel. As we are importing 100% from the European Union we struggle to keep our fuel free from any kind of low quality sources.
We will try to make sure that this line is kept properly and for the consumer we will try to make sure the services which have been developed till now are developed well.
We have the new division of franchisation so we will try to make sure that they are also complying with our international standards.
Q. What can you tell us about our future plans?
A. As for future plans, we feel today that the company has reached a maturity level in terms of volumes, turnover and network development, so most probably now we will be focused more on the services provided on the distribution point and in order to make sure not to miss some market opportunities, we will try to have a network extension with a franchise programme which is simpler to implement and follow up.
By the end of 2009, we will try to summarize our operations and make sure the budget and selling plan for the year 2010 are well applied to our new infrastructure.
Written By Tako Khelaia
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