Aljosa Visnar, Director of Petrol - We will invest about 100 million euros in Serbia

Aljosa Visnar (Photo: lična arhiva)

Petrol Group, the regional leader in the fields of distribution and sale of oil and oil derivatives, registered about 2.7 billion euros worth of revenue in 2010, 17% more than in 2009 and 7% more than planned. The net profit of the company Petrol amounted to 47 million euros, 9% more than planned and 36.6 million euros more than in 2009. Aljosa Visnar, the Director of Petrol in Serbia, speaks for eKapija about the company's development and new investment cycle.

eKapija: Petrol Group has invested approximately 20 million euros in Serbia since 2003, about 4m of which in 2010. Will these investments result in the company's greater market share in 2011?

- The oil company Petrol has a built reputation outside the borders of Serbia and we want drivers in our country to have the same quality of fuel and services and to see us in the same way as foreign countries do. This year should be the year of intensive development of retail gas stations. New greenfield investments are in the pipeline, as well as acquisition of already built gas stations and their reconstruction. All that should result in a greater market share.

eKapija: Out of 400 million euros, which Petrol Group plans to invest prior to 2014, how much should be invested in Serbia?

- The main strategic directions of development of Petrol Group are the activities that will help us become the largest and unique regional group in the fields of oil trade, gas storage and sales, and production and sale of electricity obtained from alternative renewable sources. What guides us in our operations is the top quality of all products and services, a business orientation with a focus on ecological solutions that will enable sustainable development. Since we want Petrol to be a competition to the strongest and best oil companies that are present in Serbia from earlier, our aim is a quick and controlled expansion. How quickly we will be able to do that depends on the conditions in a local environment, as well as on prices. Petrol currently has 313 gas stations in Slovenia, 79 gas stations in Croatia, 38 in Bosnia and Herzegovina, 3 in Montenegro, 3 in Kosovo and Metohia, and 5 gas stations in Serbia. Half of the planned investment of 400 million euros in the region will go to the markets outside Slovenia. More than half of that amount will be invested in Serbia, which is our strategic market.

eKapija: You have recently stated that the plan is that the company opens 60 gas stations in Serbia. How quickly will they be opened and in which strategic locations?

- In spite of difficult terms of provision of funds for implementation of investments, Petrol continues to fulfill its business plans and strategically expands to the market of Southeast Europe. Since the markets in the region of Southeast Europe are specific, each in its own way, the company Petrol adapts to the actual situation. We have decided to primarily direct investments into expansion of the retail network, that is, gas stations. In the first phase, we will focus on opening city gas stations all around Serbia. In the second phase, we will expand the network of stations alongside regional roads and open certain number of them alongside the motorway. Once the import of oil derivatives is liberalized and if the terms are acceptable, we will pay our attention to rental and construction of storage facilities for derivatives. The other segment of development of the company Petrol in this market is development of affiliates: Petrol Gas Group, which has a concession for natural gas in Pecinci, and Rodgas AD, which has a concession for natural gas in Backa Topola.

eKapija: Do you maybe plan to rent existing gas stations and redesign them or have brand new ones built?

- Regardless of the market it operates in, the company Petrol applies the highest standards of the European Union. Although the law in Serbia is more liberal than the one in effect in the EU countries, when opening new or renovating the existing gas stations in Serbia, Petrol always acts in accordance with the European regulations. From the financial point of view, that costs Petrol more because construction of a gas station according to the European standards doubles the expenses. Having in mind that we want to be present in Serbia for a long time and that we want the Government, local self-governments, users of services and consumers recognize us for our quality, I believe that such business approach pays off in a long run, especially when Serbia becomes an equal member of the EU. In order to fulfill our business plan, we will have to combine both modalities of opening gas stations. Locations are our priority and we will negotiate with local authorities or owners of gas stations, depending on the desired position.

eKapija: Do you find it difficult to acquire land?

(Photo: lična arhiva)

- Petrol opened its first gas station in Valjevo in mid-December and that was an example how a gas station can be built efficiently, quickly and to the satisfaction of investors, city authorities and Mayor Zoran Jakovljevic. We believe that we will have the same relation with local authorities in other urban areas and that they will provide us with the same support. On the other hand, as I already mentioned earlier, the rate of expansion of Petrol's network of gas stations in Serbia depends on the conditions in a local environment. Speaking of that, many built gas stations in Serbia do not have their property relations resolved, that is, they do not have all the required documentation, so that we are forced to give up procurement of such facilities because we want to act in accordance with Serbian legislation in each segment. That is why we believe that Serbia will persevere in its effort to make bureaucratic procedures easier and create an environment that will be suitable for business if it wants to attract foreign investments.

eKapija: What do you expect from liberalization of the market of oil derivatives? How will new regulations affect the operations of Petrol?

- Liberalization of the market of oil derivatives will happen gradually and the biggest oil company will keep its privileged position for some time. Now we have a situation that excise taxes on imported gasoline are increased by 4.8 dinars, while taxes on gasoline made in Serbia grew by only RSD 0.30 per liter. In that way, imported Euro-premium fuel of higher quality costs RSD 134 per liter because of the excise tax of RSD 49.50, while the price of BMB 95, with the excise tax of RSD 45, is RSD 119.40. However, changes have started and we believe that all oil companies will have equal status in the foreseeable future.

eKapija: How much lower retail prices of fuel can consumers expect?

- Prices in the market of oil derivatives should have dropped because of the fuel liberalization, but I do not believe it is going to happen in the near future due to new excise taxes.

J.Đ.