Trade progress, from oil to distributors

2024-09-29 08:40:00, Aktualitet CNA

Trading businesses dominate the list of largest companies by revenue for 2023.

The largest are oil trading companies, both wholesale and retail. Another group of enterprises that generates high levels of income are distributors, or wholesale importers of various products.

NAFTA, MARKET STABILIZES IN 2023

The fuel trading sector is highly dependent on price movements in annual revenues.

While in 2022, the increase in prices was strong, due to Russia's attacks on Ukraine, which made black gold more expensive in the world and here, bringing it up to 260 ALL per liter, in 2023 the market stabilized, with fuel that was traded at around 180 ALL/liter. From March 2022 to June 2023, the Transparency Board operated, a government-created mechanism that set ceiling prices for the majority and the minority.

After the import of fuels fell by 9% in 2022, as a result of the decrease in consumption from high prices, in 2023 the increase was 10.4%. Imports reached 614 thousand tons, the highest level ever recorded.

Consumption recovered from the drop in prices, as it was further boosted by the arrival of a large number of tourists to the country.

Trade progress, from oil to distributors

In 2023, the annual turnover of the 22 largest hydrocarbon wholesale and retail trading companies was ALL 246 billion, with a decrease of 15% on an annual basis, influenced by the reduction of fuel prices on the stock exchanges and the exchange rate. In a large part, the turnover of companies increases fictitiously, passing from one subject to another, as a result of two-level trading (wholesale and retail) in the way fuel trading is structured in Albania today.

Four enterprises in the field of wholesale trading of hydrocarbons are ranked among the 10 largest "Monitor 200" in 2023.

"Kastrati Group ", which carries out wholesale trading of hydrocarbons, has been positioned for years as the largest operator in oil trading. In 2023, "Kastrati Group " reported a turnover of 69.5 billion ALL (-25.4%), about twice as high as the second competitor on the list, "GEGA OIL GROUP", which had a turnover of 36.5 billion ALL (-17.5%) .

"Europetrol Durrës Albania" reported income of 22.1 billion ALL (+11.8%) and "Kastrati sh.pk", which carries out retail trade, 20.1 billion ALL (-6.8%).

In fifth place is "Bolv Oil" , with an income of 12.5 billion ALL, with a decrease of 5.3% compared to the previous year. " Olsi" sh.pk, the other operator of the group, which sells fuel at retail, recorded a decrease of 16.6%, to 6.3 billion ALL.

Eroil, the sixth largest operator after Bolv Oil, reported revenues of ALL 9.6 billion, down 38.6%, after doubling annual turnover a year ago.

"Skenderi G", the retailer of "Europetrol", fell by 6.2%, to 7.9 billion ALL.

"Tenet", with activity in the transportation and wholesale trading of oil and gas, recorded an income of 7.4 billion ALL, with a contraction of 14%. The company is 50% owned by "Kastrati". According to the annual report, "economic activity in the country in 2023 was affected by the volatility of product prices in the world market and by fluctuations in currency exchange rates. This is expected to affect the economic indicators of 2024, due to the increase in prices in the market, as well as the world political situation".

The ranking is followed by "Nosta Oil", with an income of 5.7 billion ALL, with a 24% decrease.

"Al.Global Oil", which bought ARMO's bitumen refinery over three years ago, has reported income of 5 billion ALL, with an increase of 23%, from the activity of selling bitumen.

Unlike the weight in annual turnover, fuel trading enterprises have little impact on the economy, both in terms of employees and added value. The biggest contribution is in the payment of VAT, while the declared profit rate is very low, on average 1-2%.

With the exception of consolidated businesses, fuel trading entities have the largest swing in entry-exit of the largest list. Market operators claim that as easy as it is to get into this business, it is just as easy to get out.

In 2023, there were no new entries in the ranking of the largest, while "Krasniqi SA" and "AFT" have left the list.

DISTRIBUTORS SLOW GROWTH, POSITIVE EFFECT FROM EXCHANGE RATE

Distributors, focused on the FMCG (fast-moving consumer goods, generally imported) segment, have continued to grow in 2023, but at slower rates than a year ago, due to slowing inflation, but also a relatively weak consumption, influenced by population flight.

Annual consumption of the population, according to INSTAT, increased by 3% in 2023, the lowest rates since the pandemic, after expanding by 7.4% the previous year.

The main concern remains the demographic changes, as a result of immigration, especially of young people, and the gradual aging of the population, which is having its own effects both on the purchasing habits of the population and on finding the workforce. The fall of the Euro, on the other hand, has been a positive factor, which has helped importers to amortize the increase in import prices.

The return of the country to a tourist destination has compensated, to some extent, the drop in consumption from emigration, especially at the peak of the season. Operators report an increased growth of products in commercial networks in coastal areas, where alcoholic beverages hold the first place.

However, the profile of the tourist who comes to Albania is that of a consumer with a relatively low budget, who is limited in spending, or is not ready to pay a lot in a country he mainly came to, as it has been advertised for the prices of his cheap.

In their comments on forums, tourists emphasize that especially in supermarkets, the prices are the same as in European countries, which operate in markets where the consumer has a much higher income than the Albanian consumer.

Trade progress, from oil to distributors

"AGNA Group", with the two companies "AGNA" and "Alfa", has maintained its position as the largest distributor in the country. " AGNA" had an annual turnover of 15.8 billion ALL, with an annual decrease of 10%. "Alfa" reported 12.8 billion ALL in revenue, with an increase of 4.5%. "AGNA Group", including the two companies together, had a turnover of about 29 billion ALL in 2022, with an annual decrease of 4%.

According to the annual report of "Agna", during 2023, there was a slowdown in price increases from foreign suppliers. However, they remain high. "But, on the other hand, the devaluation of the Euro has caused that not all the effect is reflected in the sales prices.

It is expected that there will be a stabilization of the purchase and sale prices of the products traded by the company". The company states that for 2024, the main goal is to cope with price increases and labor costs, which are expected to stabilize.

"On the other hand, the exchange rate risk is high. However, we notice the continuous trend of the strengthening of the Lek, which, if it continues, will mitigate the effects of the increase in import prices, protecting the sale prices from further growth". "Agna" adds that from 2022, beer production is being carried out entirely at the Glina Factory. "During the year 2023, the packaging of the beer of the international brand 'Moretti' also began.

In 2023, the production and sale of the soft drink 'Aranxhata' was introduced and started, and in 2024, production quantities are expected to increase. In 2024, the company hopes to start the full production of 'Amstel' and 'Moretti' beers at the Glina Factory. The company says it is expanding into renewable energy production and building accommodation and residential structures, owning 50% of a company's equity.

"Inter Distribution Service" (IDS) (part of the "Infosoft" group) has continued its strong growth for the second year in a row, reaching an annual turnover of 19.4 billion ALL (+9.7%). For the second consecutive year, IDS has reported a higher annual turnover than "Agna".

According to the annual report, "in the coming years, the work and investments started will continue with higher intensity both in terms of consolidating the brands of the products we trade, as well as the addition of new products based on expertise and customer needs for quality products. Numerous funds will be spent in the future for the better organization of the company, as well as the qualification of the management and sales staff".

"Philip Morris Albania" has increased by 11%, to about 15 billion ALL, maintaining the third place. According to the activity report, in the global market "Philip Morris International" (PMI) has a wide range of premium, medium and cheap brands.

The portfolio consists of international brands, where the leader remains "Marlboro", which accounts for about 39% of total cigarette sales in 2023. Other international brands, part of the portfolio, are "Chesterfield", "L&M" and "Philip Morris". ". These five international cigarette brands have contributed to about 79% of cigarette sales volume in 2023.

" Tobacco Holding Group" had an income of about 10.4 billion ALL, with an expansion of almost 11% on an annual basis, being ranked in the fifth distributor in the country. According to the data in the annual report, the company is a distributor of "BAT", "Peja", "Pernot Ricard", "Prince Caffe", etc.

"Marketing & Distribution" is the sixth largest operator in the country. In 2023, it declared revenues of 9 billion ALL, with an increase of 6.6% on an annual basis. According to executives from the "Marketing & Distribution" company, the company imports and distributes about 6,500 food items, including the most popular brands from the European Union countries, such as Italy, Germany, etc., as well as alcoholic beverages from the USA.

According to its managers, the highest sales period is marked in the months of July-August due to the increase in the flow of tourists. In these months, the highest consumption is for detergents, dishwashing preparations, baby products and coffee.

While profits have decreased, due to the funds spent on the salary increase policy, bringing them to a net level of up to 1,000 euros for employees in support professions, such as drivers of goods distribution vehicles, warehouse workers, forklift operators, etc.

"Marketing & Distribution" executives predict that the upward cycle of profits will return in 2025, as the effects of wage increases have continued to be felt until August 2024.

"Albanian Distribution & Development" grew by 3.8%, reporting revenues of 6.2 billion ALL. "The company markets a wide range of products that include alcoholic and non-alcoholic beverages, energy drinks, cleaning and personal care items, etc. From year to year, the company has increased the range of products, expanding its product portfolio", the annual report states.

"ELKA-SA" increased its income by 5.1%, to 5.7 billion ALL. In addition to the trading of various products, "ELKA-SA" is an exporter and also engaged in the production sector of chips, chocolate cream, croissants.

"Our objective is the Snack products that during 2024 the company intends to expand to new markets, such as Croatia, Montenegro, Bosnia, the Czech Republic, etc. Also, during the year 2024, the company is expected to complete the works for increasing the production capacity of the factory, with the aim that at the end of 2024, the increase of these capacities will be completed, which will enable an increase in production", the annual report states.

However, the company foresees a bad situation in all aspects of the business in 2024, as a result of the rising trend of prices for raw materials and goods in international markets, price fluctuations for electricity and gas.

"British American Tobacco" (BAT) has significantly increased revenues by 14.6% to 6.1 billion ALL in 2023, marking a double-digit expansion for the third year in a row. According to the annual report , the increase in income by 14% during 2023 is not only attributed to the increase in sales volumes, but also to the increase in excise duty. Based on the annual excise tax calendar, the latter increased from ALL 6,750 in 2022 to ALL 7,000 in 2023.

The company says that the tobacco industry is very vulnerable to legislative changes carried out in a given period, which may lead to increased costs, decreased tobacco consumption or withdrawal from the market of specific products.

"Primall" , which is active mainly in the sale of cigarettes, reported an annual turnover of 3.6 billion ALL, with an expansion of 10.3%.

"Interlogistic" had an income of 3 billion ALL, with a slight increase of 3.1% on an annual basis.

"Inter Trade & Distribution" declared an annual turnover of 2.9 billion ALL, with an increase of 14.4% in relation to 2022. According to the annual report, the improvement of the indicators came mainly as a result of internal factors, related to the improvement of the structure of sales, better organization of work, investments in technology and in the qualification of human resources.

A second no less important factor is the large investments made with the funds of suppliers, but also those of the company in marketing and promotion, making it possible not only to build new brands, but also to consolidate existing ones. . Finally, the low level of the exchange rate, as well as the interest rate, has also had an impact."

"Interbrands" reported revenues of 2.6 billion ALL, with an increase of 14.8% on an annual basis. According to the annual report, "a number of changes have occurred in the structure of the products sold. It has also been noticed a decrease in sales of certain products and product groups, as well as a rapid increase in expenses, which will undoubtedly affect the financial result". The low level of the exchange rate, as well as the interest rate, has also had an impact.

"Ferra" , focused on the trading of food products, mainly sugar, rice, oil, etc., and in other secondary activities, recorded a decrease in revenue by 9.8%, to 4.3 billion ALL, after a strong growth of 40 % last year, which was driven by the increase in the price of sugar and oil.

According to the activity report, the year 2023 is estimated to be at the level of expectations, taking into account the industry in which it operates and the results achieved in previous years.

Although the main activity has slightly decreased, during 2023 the number of employees and their remuneration has increased, as well as the spaces and opportunities for continuous qualification, reasonable remuneration and contribution to their personal realization have been further expanded.

For future developments, the company has planned to proceed through new investments towards increasing and improving capacities, improving management in all sectors, expanding trade in the regional market, Kosovo and North Macedonia, etc.".

"Teuta Durrës", which operates in two main sectors, packaging and distribution of food products, has resulted in an income of 3.4 billion ALL in 2023, with 12.7% expansion on an annual basis.

According to the annual report, the company's activity has expanded and increased from year to year, through the increase of the range of products put on the market, the expansion of the distribution network throughout the country, and this is evidenced in financial terms with an increased turnover of about 12.7%.

During this year, the products have also found distribution in the market of Kosovo".

The competition among distribution companies for the distribution of some key products appears strong. "Tobacco Holding Group", in its activity report, provides some information on the market share occupied by the main companies for some products.

In the beer segment, the largest company is "Alfa", which owns 35% of the market, with 194 thousand hl. The main product of "Alfa" is "Elbar" beer, which is produced in the Glina factory, while "Amstel" and "Moretti" are planned to be produced in the factory.

The second largest company is "Tobacco Holding Group", with 34% of the market, or about 190 thousand hl. This company is a distributor of "Peja" beer.

The third is "Eurolab International", with 14% of the market (80 thousand hl).

Other operators, including local ones, have less than 3% of the market.

Of the brands, the most sold is "Peja" beer, with 35% of the total, followed by "Elbar" (21%), "Peroni" (12%), "Amstel" (8%), "Heineken" (6 %)./ Monitor.al

Trade progress, from oil to distributors