Success in tough times in Ireland

Republic of Ireland oil price margins

Margins in the Republic of Ireland

The market for both distributors and equipment manufacturers in Ireland can, at best, be described as challenging, says marketing consultant John Switzer

“Product and fuel volumes have decreased significantly from just a few, short years ago.  Economic confidence remains subdued, with consumers hesitant to spend and borrow. Consequently, it’s no surprise that the new build and new to oil markets have both ground to a halt. For distributors, last winter was the mildest for several years with many tanks unfilled since before last autumn. And on top of all this, renewables are becoming an ever-more significant competitor.

“But, despite the doom and gloom, it’s important to remember that opportunities for growth and success do remain.

Margins holding steady

“Across Ireland, we’ve noticed a reduction in the number of new entrants to the distribution industry, during recent years. In some areas, this has also been accompanied by consolidation amongst existing players, to the benefit of remaining suppliers. And whilst product volumes are down, margins are holding steady. At the same time, distributors are re-evaluating their business models; some are moving away from peripheral activities to concentrate solely on fuel distribution, whilst others are expanding into businesses such as boiler servicing and tank installation.

Northern Ireland oil price margins

Margins in Northern Ireland

In Northern Ireland, the industry is benefitting from the boiler scrappage scheme announced recently. The looming arrival of new fuel storage regulations at commercial, industrial and institutional premises, presents both challenges and opportunities for fuel distributors.

 In the current age of austerity, every business must respond to short-term challenges, but should also look toward the longer term.

At an industry wide level, better communication is required about the collective contribution to the economy and local communities, and to position oil as a modern, highly efficient, and environmentally responsible fuel choice.

Oil to remain at the heart of the economy across Ireland

Speaking on behalf of one of his clients, Carbery Plastics, John added: “Having been around for 35 years, this isn’t the first economic downturn that Carbery has experienced, and it’s unlikely to be the last. However, an upturn is sure to arrive, and oil will remain at the heart of the economy across Ireland. Carbery continues to invest for the future, as experience shows that when the market improves, those which have continued to progress during tough times will be better placed to prosper. The company is in the midst of its biggest new product development initiative for many years, and continues to grow inEurope.  Closer to home, a new oil tank installer scheme is being launched, and the on-site tool manufacturing business is set for expansion.”

 

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