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Oil Refining Niche-Product Business Strategy

Situation

  • The client was one of the biggest by-product producers in oil refining (like butanes, propane-propylene fractions, aromatic hydrocarbons, petroleum solvents, sulphur and sulphuric acid) on the market
  • These products, historically dealt with by specialist traders, were transferred to B2B business units with the aim of increasing margins on sales, including with a view to integrating the whole chain

Aim

  • Analyzing the oil refinery niche-product market
  • Forecasting different market scenarios for the niche-products and building forecasts for the niche product market in Russia according to the chosen scenarios to 2020
  • Forming and choosing strategic business development alternatives for the niche-product market in Russia
  • Expert support as part of organizing possible export of MBP pellets and the bunkering business

Approach

  • To analyze the butane, isobutene, propane-propylene fraction (PPF), benzene, toluene, nefras, sulphur and sulphuric acid markets in Russia to understand the technological processes, workflows and to map the sectors
  • To conduct 15+ recorded interviews with market players
  • To build a complex market analysis model, allowing for optimal consumer price levels to be identified for specific oil refining by-products in Russia
  • To analyze the international LPG market situation, assess the impact of shale gas on the market

Results

  • The strategy helped find the opportunity to increase margins on sales 1.5 times without the need for additional investment
  • For each product, analysis was provided by comparing the global and Russian markets, the balance between supply and demand, and digital alternatives

 

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