Interview
An interview with Raphael Hüttman, managing director, Mabanaft
The appointment formed part of a management restructure aimed at supporting the ongoing development of the Group’s business interests in the UK. In an exceptionally challenging market, Mabanaft began to implement a change management programme designed to transition its operating model to more closely reflect the current and projected market environment in order to ensure a long-term and sustainable future for Mabanaft in the UK. In this interview he talks frankly about what has been achieved over the past year and why swift action and careful planning will ultimately pay dividends.
What have the past 11 months been like?
Exciting, challenging and more recently, rewarding. It’s a challenging market place and we, as a team, have had to decide on the best way to take the business forward. Change is not always easy; however it’s very rewarding to see that it pays dividends.
Please tell us about some of the changes
We appointed a new finance director and a new head of supply and operations. The combined management team brings together a great deal of expertise, together we took the opportunity to review the business and the marketplace. This led to the decision to step away from certain activities and focus on what is core to Mabanaft in the UK.
What are the benefits of being part of the Marquard & Bahls group?
Marquard & Bahls is a very strong group; we’ve shown substantial growth in profits in the last 10 years which is set to continue. We benefit in a number of ways such as financial strength and support as well as inter-group product purchasing at competitive rates. However the most important benefit is the breadth of industry expertise that we have access to whenever we need it.
How do you view the current environment?
The international supply market has been backwardated for the majority of the last 12 months; if you hold stock and you hedge, you risk losing money every month which makes it very challenging as we must continue to maintain sufficient levels of inventory for onward distribution to our customers. There is a great deal of volatility and uncertainty in the market. We must endeavour to balance this uncertainty and create a product for our customers that is not only attractive in terms of price but is also secure in terms of physical availability. In the UK market there has been a period of unprecedented change – we have seen consolidation of large parts of the customer base, refiners have increased their market share, and economic recession – all of which has led to changes in profile and demand. The underlying trend is a continued reduction in consumer demand and very intense competition. It is a challenging time for the industry.
What has Mabanaft done in response to market conditions?
We looked at the locations we were in, the kind of deals we were offering and the risk reward of these and decided to make changes. There are really good parts to our business; such as Grays, Belfast, Grangemouth – all of these are doing really well, but there were two locations, Cardiff and Immingham, that were not working for us. These changes – and the fact that some people in the industry are aware that our results last year were disappointing – have resulted in rumours. Honestly, there is no change in the service or in the product that we deliver; there has simply been uncertainty as a result of rumour. In these volatile times and with such a challenging market one shouldn’t be afraid of making the right decisions. Admitting that something doesn’t work and stepping away from it strengthens your business – that is what we have done.
Has your strategy been successful, have you achieved what you set out to do?
We are moving in the right direction and I believe that there is a great deal of potential in our organisation. While part of a very big group, in the UK we are a fairly small company – one of our strengths is the ability to make quick decisions. Here we have all of our expertise together in one room which facilitates interaction between supply, marketing, operations and finance – it’s something we can take full advantage of. In terms of financials, our result this year compared to same period last year is substantially better. We are seeing that change pays off and that is rewarding.
Have you got more changes planned for the future?
I don’t foresee anything at the moment but it’s important to understand that in a market that will constantly change, we as a company have to change as well. If you stop changing or do not adapt to market forces, I believe that is the beginning of the end. We have to remain flexible – that’s our strength as an organisation.
What are Mabanaft’s plans for the future?
In locations we are committed to we are looking at opportunities to grow our position. We are currently negotiating investment into terminal infrastructure in the UK that will allow us to sell additised product, something customers have been asking for and that we have not previously been able to offer at all of our locations. We are also looking to invest in new IT systems to allow us to offer electronic invoicing and online administration. This will increase efficiencies within our organisation which will in turn allow us to offer more benefits to customers.
In terms of commitment to the UK – we have been in the UK for more than 60 years and we’ve had very good times and more difficult ones. As a group we feel that the UK market place is an important part of our business and we remain committed to adapting to the prevailing market.
You sound very positive …
Yes I am – there’s more work to do and the environment remains tough – there’s nothing we can do about that – but there’s a lot we can do to cope with it.
www.mabanaft.co.uk