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Wholesale

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Compare 2007 - 2009


In 2008, ORLEN Group offered wholesale trade in fuel and non-fuel products on the territory of Poland, the Czech Republic, Germany, Slovakia and Lithuania. The Group wholesale segment consisted of PKN ORLEN wholesale trade units, 5 Regional Market Operators, Petrolot Sp. z o.o., ORLEN Gaz Sp. z o.o. (Poland), Uniraf Slovakia (Slovakia), Unipetrol BUI (Czech Republic), AB Mažeikiu Nafta (Lithuania, Ukraine, Poland, maritime sales) and UAB Mažeikiu Nafta Trading House (Latvia, Estonia).

ORLEN Group – fuel

The total volume of fuel sold by ORLEN Group in 2008 exceeded the 2007 result by nearly 23% (i.e. 3.1 mn tonnes). More than half of our fuel offer constituted diesel oil, whose sales went up by approximately 24% compared to 2007. The highest demand dynamics was reported in the aviation fuel sector, whose sales in 2008 exceeded the volume of the previous year by approximately 54% percent.

ORLEN Group fuel sales on home markets in 2007–2008 (thousand tonnes)

          2007         2008  
  Poland Czech Lithuania other* Total Poland Czech Lithuania other* Total Change
Petrol 1 550 646 1 768 209 4 173 1 624 545 2 801 195 5 165 24%
Diesel fuel 3 441 1 175 1 977 320 6 914 3 943 1 088 3 160 370 8 561 24%
Light heating oil 943 19 9 207 1 177 921 25 8 286 1 240 5%
JET A-1 408 80 195 - 683 482 88 480 - 1 050 54%
LPG 240 86 141 - 467 263 98 187 - 547 17%
Total 6 582 2 006 4 090 736 13 414 7 233 1 844 6 636 851 16 564 23%

* Wholesale volume in Slovakia and Germany.

The increase in fuel sale volumes was mainly due to restored full production capacities at AB Mažeikiu Nafta. Upon completion of the overhaul of the Vacuum Distillation Unit, fuel sale volume from the Lithuanian refinery went up by approximately 2.5 mn tonnes compared to 2007.

The upward dynamics in refinery product sales in Poland was possible due to increased sales to network and basic customers as well as to key customers, namely to domestic and foreign corporations. Sales dynamics in 2008 much exceeded consumption dynamics. Temporary promotions at storage facilities (reduced SPOT prices for selected products) had a positive impact on sales.

The 16% drop in fuel sales reported on the Czech market was due to reduced diesel consumption in 2008. We managed to increase diesel export to Poland via PKN ORLEN by 150 thousand tonnes in the reported period.

ORLEN Group fuel, apart from home markets (Poland, the Czech Republic, Slovakia, Germany, Baltic States), was also sold to: the US, Canada, France, Spain and Ukraine.

ORLEN Group share in domestic fuel sales in 2007–2008

    2007 2008 Dynamics
Polska – PKN ORLEN* Poland 58,30% 61,60% 3,3 p.p.
Unipetrol** The Czech Republic 29,60% 30,90% 1,3 p.p.
AB Maźeikią Nafta** Lithuania 85,00% 89,10% 4,1 p.p.

* Share in wholesale and retail sales of petrol, diesel and light heating oil.

** Share in wholesale and retail sales of petrol, diesel and JET A-1.

ORLEN Group – Non-fuel Products

Total wholesale trade in non-fuel products by ORLEN Group in 2008 amounted to 6,186 thousand tonnes, i.e. 11% more than in 2007.

ORLEN Group non-fuel sales in 2007-2008 (thousand tonnes)

        2007       2008  
  Poland Czech Lithuania Total Poland Czech Lithuania Total Change
Heating oil III 969 165 1 126 2 260 961 146 1 798 2 905 29%
P fractions 300 - - 300 338 - - 338 13%
Sulphur 120 31 40 191 130 34 76 240 26%
Refinery 240 226 142 608 60 232 178 470 -23%
Ethylene 135 154 - 289 105 153 - 258 -11%
Propylene 14 33 - 47 6 27 - 33 -32%
Benzene 113 163 - 276 95 179 - 274 -1%
Glycols 102 - - 102 88 - - 88 -14%
Toluene 120 - - 120 103 - - 103 -14%
Paraxylene 32 - - 32 25 - - 25 -22%
Orthoxylene 26 - - 26 21 - - 21 -19%
Butadiene 60 - - 60 55 - - 55 -7%
C fractions - 170 - 170 - 211 - 211 24%
Polyolefins - 397 - 397 - 482 - 482 21%
Ammonia - 176 - 176 - 195 - 195 11%
OXO alcohols - 54 - 54 - 56 - 56 4%
Industrial oil - 29 - 29 - 21 - 21 -27%
Petrochemical 222 216 - 438 186 225 - 411 -6%
Total nonfuel 2 453 1 814 1 308 5 575 2 173 1 961 2 052 6 186 11%

In case of non-fuel products, the first three quarters of 2008 saw relatively high and stable demand for petrochemical products and very high price quotations of those products on European markets. Petrochemical product sales in 2008 were influenced by the scheduled standstill of Olefins II Plant and other related production units. Late into the 3rd quarter and in the 4th quarter of 2008, we reported visible crisis symptoms. The situation in the automotive and construction industries dramatically deteriorated, which devastated plastic product markets (polyethylene, polypropylene, PVC, polystyrene, polyamides, polyurethanes). In a very short period of time, petrochemical product quotations showed record price drops – even by 60%, and limitations in petrochemicals processing (due to reduced loads or temporary shut-down of installations) inevitably affected sales volumes in the 4th quarter, both in terms of quantity and value.

The key foreign customers for our non-fuel products were partners from Denmark, Germany and the Czech Republic.

Investments

After consolidating RORs (regional market operators) company management via the ORLEN PetroCentrum, we obtained better operating control over and more effective functioning of RORs. The measures taken enabled us to optimise sales channels and finish the restructuring of RORs, thus reducing their operating expenses.

In 2008, in order to improve wholesale customer service, we extended the contact-centre system supporting cooperation with existing and new customers.

Strategy

In 2008, we implemented strategic goals aiming at:

  • sales maximisation in Poland, the Czech Republic and Baltic States;
  • wholesale margin optimisation at the Capital Group level;
  • increased aviation fuel sales in the region.

In the non-fuel product sector, we focused on PTA pre-marketing and divestments in PVC and artificial fertiliser sectors.

According to the updated 2008-2013 strategy, we will be looking for possibilities to strengthen our commercial position in Ukraine and Belarus, and to increase our activity in the maritime sales sector.

Unipetrol is planning to improve ethylene and benzene efficiency, establish a new butadiene section and invest in products, like C9 and DCPD. An important event in 2009 will be the closure of the OXO alcohol plant.


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