Mabanaft – majoring in innovative independence

After serving the majority of his years in the industry working for oil majors, Mark Rolph joined Mabanaft in 2008, becoming the company’s managing director later that year. As the presence of independent wholesalers continues to rise in the UK, Fuel Oil News was keen to learn more about Mabanaft’s role

“I believe the change in Mabanaft’s business profile really began back in 2002 when with gasoline in surplus, refiners became extremely competitive in the                                                                                                                                 retail grade sector,” said Mark.

Today, independent wholesalers who previously invested in blending remain strong in the retail market, whilst Mabanaft has concentrated more on the commercial market reselling distillates including kerosene.

Reliable supply at a competitive price

“One thing’s for certain – a distributor can’t sell product if he can’t buy it,” said Mark.  “The ageing and apparent fragile oil industry infrastructure has driven distributors – in business to sell oil – to increasingly look to independents as an alternative source of supply.

Mabanaft, which serves customers across the UK, has storage facilities at locations from the east coast of Scotland down to the Thames Estuary, onto the south and west coast, at Cardiff and in the north west. The company also has facilities at Belfast and is keen to further expand its presence.

“It’s vital that distributors see Mabanaft as a reliable supplier; so appreciative of previous issues, we ensure that our terminals are well stocked. Over the 09/10 winter, we honoured all our contractual deliveries, although we did have to apply some allocations on spot business at Cardiff. (Domestic kerosene availability is becoming stretched during our winters as demands on refineries to produce alternative grades increase.)

“Profit margins for oil wholesalers and retailers alike could certainly be better. Mabanaft believes that – compared to its competitors – it provides a wide range of pricing options to assist customers in optimising margins and supporting them with a more balanced portfolio of price risk management.”

The UK – refineries or storage depots?

“Oil majors moving their activities and operations back to more core areas of their business is understandable. Refineries are costly to run, and with the volatility in oil pricing that we’ve seen in the last decade, making a margin from these expensive machines is not consistently certain. Only time will tell as to how the new refiners will manage the UK market. Potentially these refineries could become just storage locations, like Shell Haven and the previous Gulf refinery at Milford Haven.”

An innovative approach

Situated in London’s Victoria district, the Mabanaft office open plan work space enables front, mid and back office operations to work seamlessly together enhancing communication between all areas of the business.  “The team is superb – we work and make decisions together. We’re doing well, diversifying and growing our business in a very tough climate.

“Innovative ideas can come to fruition much quicker than in a larger corporate culture.  When we realised that Mabalive (FON June page 6) had potential, we were able to develop it quickly and launch it earlier this year.  Customer feedback says Mabalive is easy to use and customers are hooked on it. Registrations to the site are growing at a pace.”

Last year Mabanaft became the first independent to utilise a rail path, from Immingham to Cardiff, for the distribution of oil; the company has just recruited two new members of staff to help expand and develop rail supplied business. “We’re also working on some innovative ideas with our partner DB Schenker which, if we can realise them, will be quite unique,” added Mark.

Mabanaft’s parent company, continues to diversify and expand. Marquard & Bahls owns Oiltanking, which is now one of the largest public oil and petrochemical storage companies in the world.

In the UK, Mabanaft itself has made acquisitions – and in Mark’s words ‘has not taken its eye off the ball’ as to potential future acquisitions and mergers.  In 2010, Mabanaft continued to diversify and moved ‘quietly’ into marine fuels, a business which it continues to steadily grow.

Major v independent

FON was curious to discover how Mark had found the transition from major to independent.  “At first, it was not easy moving from a large corporate entity having laboursome, albeit necessary, protocols in place, to basically a family run business where the decision making process is as thorough but quicker. It’s exciting, and an environment within which most independents in the oil industry are seen to work.

Following the restructuring of the Association of UK Oil Independents (AUKOI), I was pleased to see the emergence, and be a part of, the Downstream Fuel Association (DFA).  The DFA has much to do to build on the lobbying undertaken by the previous AUKOI organisation as government sees the growing commitment and importance of the independent sector.

“The DFA executive management is doing a great job – the DFA is a now a credible organisation which government feels has a true voice.

“One thing I can certainly thank a major for is my excellent training.  I certainly intend to be around this industry for a good while longer, it’s in my blood and there has never been a dull moment. I’m pleased to still be a part of it and to be able to continue to make a contribution.”

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