LOTOS 2013 Report | Marketing segment

Feedback

Lotos

Integrated Annual Report 2013

GRI CONTENT INDEX Polski

Value growth strategy

Grupa LOTOS ranks among Poland’s major industrial producers. Every day, we process thousands of tonnes of crude oil and deliver thousands of tonnes of oil products to the market.

Paweł Maślakiewicz

Sales Director, Grupa LOTOS, CSR Strategy Leader in the Market Partnership to Build Lasting Customer

Statement by Paweł Maślakiewicz

Sales Director, Grupa LOTOS, CSR Strategy Leader in the Market Partnership to Build Lasting Customer Relationships area

Grupa LOTOS ranks among Poland’s major industrial producers. Every day, we process thousands of tonnes of crude oil and deliver thousands of tonnes of oil products to the market. Mobility is the good we offer. Since it would be impossible for us to reach our customers directly, it is key that we build lasting relationships with business partners, whose distribution networks help channel our products to end users. We have the pleasure of working with the industry’s leaders as well as - what is equally important - a number of smaller players, who guarantee stable supplies of LOTOS products to the market.

Paweł Maślakiewicz
Sales Director, Grupa LOTOS, CSR Strategy Leader in the Market Partnership to Build Lasting Customer

Grupa LOTOS ranks among Poland’s major industrial producers. Every day, we process thousands of tonnes of crude oil and deliver thousands of tonnes of oil products to the market. Mobility is the good we offer. Since it would be impossible for us to reach our customers directly, it is key that we build lasting relationships with business partners, whose distribution networks help channel our products to end users. We have the pleasure of working with the industry’s leaders as well as - what is equally important - a number of smaller players, who guarantee stable supplies of LOTOS products to the market.

In our effort to build lasting relationships with customers, it is key that we create and strengthen our image of a reliable, responsible supplier, who seeks to identify and satisfy market needs, while proposing innovative solutions that set positive standards for the entire industry. It is important that we demonstrate our maturity in the approach to commercial matters, but also to our role as one of the market’s major players.

In 2013, at an annual meeting with our key partners, we unveiled the LOTOS Group’s CSR strategy and showcased the achievements reinforcing our image of a responsible business partner. I am pleased to say that the presentation was very warmly received. We showed how, by combining our business capabilities with innovative ideas from other spheres of life, we can generate a whole new quality. Our activities for the support of culture, sport and the environment make us a partner of choice for our customers.

Last year, we also had the pleasure of presenting the LOTOS Group’s Code of Ethics, which provides a systematic framework for our corporate values. This landmark event, clearly communicated to hundreds of our business partners, has allowed us to establish a transparent platform of cooperation, providing a crucial tool for building our relationships with the market environment.

Another thing worth noting is the role we play in supporting the government in the law-making process concerning the energy sector. We take an active part in consultations over proposed amendments to the Mandatory Stocks Act and the Energy Law, and have whole-heartedly supported the introduction of legal measures aimed to eradicate criminal practices from our industry.

Thanks to our initiatives, the LOTOS brand has come to be associated not only with premier quality oil products, but also with safety, environmental-mindedness and responsibility for the market on which we operate.

Collapse statement

Marketing segment

A A A

Our marketing business is conducted domestically (sales to foreign companies) and through export sales, by sea and by land. In 2013, the LOTOS Group’s activities involving production and sales to the fuel, lube and bitumen industries were carried out through:

Grupa LOTOS and
subsidiaries: LOTOS Paliwa, LOTOS Oil, LOTOS Asfalt and LOTOS-Air BP Polska.

We also provided logistics services through Grupa LOTOS (management of storage capacities) and LOTOS Kolej (primary logistics).

In the area of aviation fuel, November 2013 saw the closing of a joint-venture transaction with BP Europe SE, concerning sale of a 50% equity interest in LOTOS Tank, which led to the establishment of LOTOS-Air BP Polska.

Achievements

Our 2013 performance relative to strategic objectives for the marketing segment was in line with plans.

The LOTOS Group secured a 33.4% share in the domestic fuel market, 3.4 pp above the target set in the business strategy for 2015. The market share fell by 0,9 pp on 2012, due to increased activity of the grey market, whose volume in 2013 was estimated at around 1.6 million tonnes.

The LOTOS Group’s share in the Polish retail fuel market reached 8.5% - which means we are on track to meet our strategic target for 2015. In 2013, our share of the retail market rose by 0.5 pp on 2012. The achievement of our strategic target, to gain a 10% share in the domestic retail fuel market by 2015, will be supported by sustainable development of the service station chain both in the premium and economy segments, and by increasing sales through the existing chain.

The target of generating sales in excess of our fuel production capacities, forecast for the end of 2013, was achieved at 8.7% - which puts us well on track to meet the 15% target by 2015.

In 2013, the volume of products sold by the LOTOS Group ran to 9.3 million tonnes, 8.1% down year on year. The greatest decline was seen in domestic sales of diesel oil, as the increased activity of the grey market took away some of the demand for the fuel, which was further sapped by the economic slowdown. A decline in export sales was due mainly to the overhaul shutdown of our refinery in the first half of the year, and ongoing efforts to optimise the sales mix in response to different refining margins spreads.

LOTOS Group’s share in the domestic market of liquid fuels (%)

Source: In-house analysis of Polish Organization of Oil Industry and Trade (POPiHN) data.

LOTOS Group’s sales [tonnes]

Source: The LOTOS Group in-house data.

Relationship capital

Value chain – logistics and sales

Mediaroom

LOTOS Tank takes off as fuel supplier at Warsaw Chopin Airport

E(x)plory Festival

15th edition of the Bielsko Jazz Blizzard

2013-2015 Effective and Rising Programme
6 months with the 'White and Green Future with LOTOS'

New LOTOS Rally Team presented

'Fill up with Emotions' LOTOS 70th Rally Poland

Press conference with Robert Kubica
The refinery in Gdańsk gets more efficient

Modern rubber-modified bitumen

The 1200 furnace and kestrels

LOTOS acquires interest in Norwegian licenses and doubles production
LOTOS and Grupa Azoty in PLN 12bn joint Polish petrochemical project

New LOTOS platform on the Baltic Sea

Direction: Production

New football centre in Kokoszki - the intent letter signed
Seals released into the BalicSea

Lotos Serwis

'In Search for Champion's Successors' brings great results

New LOTOS platform on the Baltic Sea 2

Statement by Paweł Maślakiewicz

Marketing segment

Achievements

LOTOS Group’s share in the domestic market of liquid fuels (%)

LOTOS Group’s sales [tonnes]

Mediaroom

Mediaroom

Share

Briefcase

Your feedback about this Report