The FINANCIAL — Wissol, the leading local oil company, named Golden Brand of the year, stated its consolidated sales revenue at USD 196 million in 2007. The sale of diesel and gasoline of Wissol amounted to 156,626 MT in 2007 with an increase of 40% versus 2006.

ADVERTISEMENT

The FINANCIAL interviewed Samson Pkhakadze, Wissol Chairman of the Board of Directors, regarding the company’s further strategy in parallel to the growing prices on oil and the sector’s development priorities in the local market.

Q. What are the major advantages Wissol could benefit from by winning Golden Brand awards?

A. Every award is an honour and recognition of the company’s achievements. In 2007 we have received over 10 awards that makes us very proud.  At the same, a significant component in any successful corporate stories is an enhanced responsibility towards all stakeholders and especially towards our valued and loyal customers. Meanwhile, it’s a motivation to drive and continue further growth and development.

Q. The oil business is one of the most competitive sectors in the country. Could you remember the top highlights in 2007 conditioning Wissol’s winning Golden Brand awards?

A. 2007 has been a highly dynamic and efficient year for the brand. Nowadays Wissol is by far more than just a network of petrol stations. In 2007 we have decided to diversify our business and quickly started to enter different areas across energy sector. Nowadays we operate in aviation refuelling market, we have developed CNG (compressed natural gas) stations and have acquired gas distribution companies in Marneuli and Telavi regions. Now our group has sub-brands such as Wissol Petroleum, Wissol Gas, Air Wissol and Wissol Gas Distribution Company.

In parallel with these developments, we have expanded our chain of petrol stations both in Tbilisi and outside of the capital.

 

Recently at the board we have made a decision to further diversify business as well as expand our current portfolio. There are lot to be done in 2008 and on.

On the background of above-mentioned, the most important area is our continuing activities in corporate responsibility direction. We executed a couple of very interesting projects in this area which strengthened our strong standing as a responsible corporate citizen of our country.

In 2007 taxes paid by Wissol to the state budget were significantly increased. In 2006 Wissol has contributed 43 million Gel to the state budget whereas in 2007 we have paid almost 76 million Gel.

In 2007 we have fulfilled our most important strategic objective and became the distributors of the highest quality petroleum products in Georgia. We have started to secure supplies from Italian API that significantly increased comparative advantage of the company. We have signed long term supply contract with Italians. Shift to Italian fuels was immediately resulted in significant growth in our sales figures.

 

Wissol loyalty Pirveli Card has been another success story for the company. Through this plastic card our customers are now eligible for a discount of up to 5%. We have already distributed over 20, 000 Pirveli Cards.

Wissol has activated hotline, so in case of any problem any client will be taken an adequate care of.

Q. How impressive was the company’s success story in 2007 in terms of sales statistics compared to 2006?

A. Consolidated sales revenue in 2007 was USD 196 million. The sale of diesel and gasoline of Wissol amounted to 156,626 MT in 2007 with an increase of 40% versus 2006.

Q. As you told the FINANCIAL recently, “A further diversification of the portfolio, acquisition of natural gas distribution companies, further increase in taxes to the state budget, continuing activities in corporate responsibility direction, of a largest land terminal in West Georgia - these are set as company’s priorities in 2008. How confident are you about accomplishing all the above on the background of growth in prices on world oil markets?

A. As you know this unprecedented surge in isn’t the Georgian phenomenon. This is very bad, this is extremely bad not only for consumer but for producer nations as well. There are only handful oil producer countries that are benefiting from this price surge. And even in such countries it’s doubtful whether high prices are beneficial for their societies at large. What makes story even worse is that we can do nothing against high but try somehow to adjust to it. I expect that we will see further increase in this year and unfortunately there are some underlined fundamentals for that.

As for our plans for 2008, in February we have launched the biggest land terminal in Samtredia with over 32 000 cbm capacity. We can store their gasoline, diesel and aviation fuel. We are currently building a terminal for handling bitumen on the same area.

Samtredia terminal is the key fuel storage facility in Western Georgia. It can store half the amount of oil products Georgia consumes monthly. The terminal allows us to satisfy the demand for oil products in Western Georgia and we are happy to supply any of our products to any fuel station in the region. Local corporate customers can now also avail themselves of our products at a more acceptable price as we have reduced logistic costs there. The terminal is equipped with Italian technology that is a step forward in the modernization of the industry.

Wissol holds a 25% share of the oil market in Georgia and is thereby the market leader. The investments made in the new terminal will further enhance Wissol’s market competitiveness.

We have just started and during next 2 years we will be building oil terminal in Tbilisi with 25 000 cbm capacity.  Currently we are leasing an average size oil terminal in Tbilisi .

Q. What are your arguments while claiming that a diversified business portfolio could to some extent weaken the negative influence on the local market?

A. Natural gas is less dependent on the global price changes on oil. Because of logistics involved, etc in natural gas market you have fixed prices for a longer time periods. Simultaneously natural gas prices are almost half of a price on petroleum products.

Hence, we offer cheaper to low income car owners who run on CNG.

Currently, the number of vehicles that run on gas is moderately small and could be  around 5 or 6%. Besides, setting up a CNG station requires far more investments than that for a petrol station.  However, we still think that the sector has potential to grow and most important we express our willingness to stand by low income families.

Q. Corporate Social Responsibility (CSR) has become a part of business activities for large oil companies worldwide. What’s Wissol’s vision of CSR?

A. We believe that, wherever we operate Georgian wide, our activities should generate economic benefits and opportunities and enhance the quality of life of our stakeholders; that our conduct should have a positive influence; that our relationships should be honest and transparent; and that we should be held accountable for all our actions.

The areas that the company is focusing on are as follows: customers, employees, community and society, health, safety and environment performance, and control and finance.

Ethical principles, a keen sense of our social responsibilities and an awareness of these responsibilities with respect to our customers, employees, public authorities, the environment and society in general continuous to grow, and we are determined to further strengthen this commitment in our business. In 2007 the company spent over GEL 1 million on charities.

Q. How many filling stations Wissol operates now and how promising are expectations in this respect for 2008?

A. Wissol owns the largest network of service stations. Currently the company operates 60 service stations and has over 100 licenses/ sites ready for construction in the portfolio. Couple of more Wissol service stations will be in operation by the end of 2008 bringing enhanced convenience to our customers.

Q. As you mentioned, “One could not even think of providing high quality products to the local market before 2004 as 70% of the products on the market were smuggled products.” How would you evaluate the sector development and market competition in Georgia by now?

A. During 2004-2005 smuggling was fully eradicated from the market.  We quickly capitalized on new opportunities that suddenly came to the market, activated our business, significantly increased our investment budgets and as a result of all these have created critical, strategic physical infrastructure in the industry. At the same time, as, after evaporation of smuggled products, everybody was given same level field we shifted to European quality’s products. In previous years when smugglers had 30-40% or more lower prices at their pumps we couldn’t afford ourselves to import expensive European petroleum products. But once situation has dramatically changed for good, we set a strategic objective for becoming a #1 premium brand in Georgia with distinguished, highest quality petroleum products in the chain. After partnership with Italian API in 2007 we have achieved our strategic goal.

About the company:

Established in 2000, the company completed its process of re-branding two years ago and entered the market with Swiss investments under the name Wissol. Today Wissol Group, one of the biggest business groups in Georgia, is the leader in the energy sector and is presented on the market through its sub-brands: Wissol Petroleum, Wissol Gas, Air Wissol %26amp; Wissol Gas Distribution Company.

The company has the widest base of corporate, retail %26amp; wholesale customers. JSC Wissol Petroleum Georgia is proud to have the trust of its stakeholders and safeguards this trust through maintaining the highest quality petroleum products and quality services in its chain of retail stores. Innovative thinking is the main asset of the company. All novelty products and services in the sector are pioneered by the company. Wissol is the first and only company in the local Energy sector to have received an ISO 9000:2001 Quality Management certificate.

Compressed Natural Gas (CNG), the environmentally friendly fuel, has been available at Wissol stations since 2007. Last year Wissol Group has intensified its activities in the natural gas industry by acquiring gas utilities. Wissol Gas Distribution Company is currently distributing gas to end customers such as households, private and public companies, etc. The group is set to make further investments in gas utilities in different regions of Georgia.

In 2007, Wissol Group made solid investments in the New Tbilisi Airport. Modern %26amp; technologically advanced hydrant system infrastructure was created by affiliated company of Wissol group, Air Wissol Ltd, for aircrafts refuelling.

“The fundamental base for our success is our unending effort to achieve further growth and development. Today we employ over 1,200 people and each one of them is rigorously focused to bring company to the highest standards in the industry” quoted Rusudan Kbilashvili, PR manager of Wissol Petroleum Georgia.

Wissol Group acknowledges the importance of contributing to the development of society at large, thus implementing policies and projects that affect and concern all of the stakeholders. Wissol supports the development of society through implementing social investment and charitable projects focused on the environment, safety, integration of disabled children’s to Georgian society, education, sports and culture.

The list of the awards and certificates received by the company during 2005-2008:

2008 - Diploma - The biggest employer in the industry - The Union of Oil Products Enterprisers, Importers and Customers

2008 - Diploma - The owner of the largest network of service stations - The Union of Oil Products Enterprisers, Importers and Customers

2008 - Diploma - The company with high social responsibilities - The Union of Oil Products Enterprisers, Importers and Customers

2008 - ‘Favourite Brand - Golden Brand’, organized by The FINANCIAL and Global Idea

2007 - Award as the largest tax payer to the Georgian State budget - The Union of Oil Products Enterprisers, Importers and Customers

2007 - Diploma - The biggest employer in the industry - The Union of Oil Products Enterprisers, Importers and Customers

2007 - Diploma - The owner of the largest network of service stations - The Union of Oil Products Enterprisers, Importers and Customers

2007 - Diploma - The full service provider at service stations - The Union of Oil Products Enterprisers, Importers and Customers

2007 - Diploma - The company with high social responsibilities - The Union of Oil Products Enterprisers, Importers and Customers

2007 - Wissol was awarded the quality certificate by the Georgian Quality Foundation (GQF)

2007 - Diploma ‘New Horizons’ for the active propaganda of certification and operation according to management systems, SGS

2006 - Diploma - Consumers’ Choice by TM Golden Brand Organized by Global Idea

2006 - Best Company/Businessman Award by GORBI and Georgian Times 2006

2006 - SGS () awarded JSC Wissol Petroleum Georgia with the certificate of Quality Management System ISO 9001:2000.

2006 - National Investment Agency of the Ministry of Economic Development of Georgia together with the PR Company Profile awarded Wissol with diplomas as winner in two nominations: ‘Leader’ and ‘Trust and Reputation’.

2005 - Award in Business Ethics and Business Conduct by the American Chamber of Commerce

Written by Kate Tabatadze

Tags: , , , , , , , , , , , ,

Related posts