The Czech Republic

Production

Total oil and lubricant production in Paramo amounted to 82.7 thousand tonnes, i.e. a 7.5% drop compared to 2007.

 

 

 

 

 

 

Oil production volumes in Paramo a.s in 2007–2008 (tonnes)

	2007	2008	Dynamics
Oils and lubricants	44 777	42 341	-5,40%
Base oils	14 310	13 405	-6,30%
Process products	20 440	16 443	-19,50%
Other products	9 966	10 559	5,90%
Total	89 493	82 748	-7,50%

The largest, 19% drop was reported by the company in process oil production, whereas side product and slack waxes production went up by nearly 6%.

Development of the oil, lubricant and paraffin segment focused mainly on technological aspects of base oil production and searching for optimum solutions given the changing price environment and raw material availability, including additives and components. In the case of Paramo, raw materials for base oil, being a key component of lubricants, are broadly available, including group I, II and III base oil. The optimisation project included measures aimed at ensuring production integrity. Analyses were prepared concerning hydrocracking oil quality and quantity trends, and possible methods to stabilise output and quality parameters were proposed. Moreover, lubricant blending processes based only on two raw materials: HCVD and SHS 130 R were designed.

In order to maintain the range of available products, adaptation of the existing HCVD was designed and discussed. In 2009, the company will continue operational testing of the processing of the modified raw material. With respect to optimisation of lubricant production in Pardubice and Kolin, product formulations were designed and verified to enable better utilisation of base oil portfolio.

In the industrial area, there was a significant interest in multifunctional types of oil which have several applications and may replace several different oils. Mogul Multi oils were added to the offer, used as lubricants for hydraulic devices, wires etc. With saws, Mogul Alfa Profi oil is used, also in BIO variant (environmentally friendly). The most recent requirements concerning oil, with respect to high efficiency and compatibility with exhaust gas catalysts, are met by innovative passenger car oils MOGUL EXTREME. Quality operating properties in other products were improved through reformulation. This concerns, among others, oil for small lawn mower engines and other devices, i.e. TSF ALFA 4T. Once accepted by engine manufacturers (MAN, VOLVO, TATRA, TEDOM), automobile oil is more competitive.

Sales

In 2008, Paramo reported a 26% share in the Czech market. Paramo base oil is used by the company to produce own lubricants and exported to mature markets, mainly to Switzerland, Germany, Poland, Hungary, Austria and the Netherlands. Paramo base oil export in 2008 amounted to 13.4 thousand tonnes. Lubricant sale volume in 2008 amounted to 42.3 thousand tonnes, including 22.1 thousand tonnes on the Czech market, and 20.2 thousand tonne – exported.

The condition of the oil segment in Paramo a.s. was affected by changing crude oil prices and fluctuations on the currency market. While oil product importers reported increased sale value in the first half of 2008, export staggered. Reduced sales of Paramo a.s. products were mainly due to the import of low-price no-brand products. The results achieved in the second half of the year were much better, thanks to lower crude oil prices. The company took the chance to make up for the loss from previous months.

Paramo a.s. marketing strategy was based on two lubricant brand segments. MOGUL lubricants have been and will remain premium products applied by reputable car manufacturers. Paramo, on the other hand, is an economy brand. It meets all the quality standards and customer requirements. Marketing measures prepared for the two segments were target group oriented and fitted within the allocated budget.

Investments

Paramo a.s. major 2008 investment projects included construction of a new cooling tower for the purposes of Solvent Dewaxing. Moreover, the company implemented an operating and service cost cutting programme.