PKN ORLEN set to strengthen its international position
PKN ORLEN has maintained a consistent focus on strengthening its position in Central and Eastern Europe, as envisaged by the ORLEN2030 strategy. As part of its geographic expansion on what are seen as the key growth markets for the entire ORLEN Group, it will build a fuel retail chain in Hungary, which will position PKN ORLEN among the region’s leading players. Topics discussed during a recent meeting between the President of the Management Board of PKN ORLEN Daniel Obajtek and the Hungarian Prime Minister Victor Orbán included the strategic aspects of energy security in this part of Europe.
The discussion was attended by Zsolt Hernádi, Chairman-CEO of Hungarian MOL Group, which PKN ORLEN has selected as its remedies partner for the retail segment in connection with the ongoing process of acquisition of the LOTOS Group.
“Prime Minister Viktor Orbán, Daniel Obajtek, President of the Management Board of PKN ORLEN in Poland and Zsolt Hernádi, Chairman-CEO of MOL Group, discussed energy sovereignty in Central and Eastern Europe and strengthening of the North-South energy corridor. Additionally, the meeting also touched on the agreement announced a few weeks ago between MOL Group and the Polish company. Following an asset swap deal, MOL will enter the Polish fuel retail market, where it may become the third largest player, while PKN ORLEN will become the fourth largest fuel retailer in that country. This cooperation is a great sign of the economic dynamism of the two countries. It also strengthens the V4 cooperation and benefits the CEE economic relations. At the meeting, Viktor Orbán made it clear that the Hungarian government is pleased with MOL's acquisition and welcomes Polish investors in Hungary, as Polish and Hungarian customers will emerge as winners through the fair market competition of the two companies,” announced the office of the Hungarian Prime Minister.
“Our business decisions are not only strengthening the ORLEN Group's position in Central and Eastern Europe, but – what is even more important – are bringing benefits for the entire region. There is great value in that, as a business organisation, we have the potential to ensure the region’s security and independence in terms of fuel and energy supplies. We consider Hungary, where we are already present on the wholesale market, as a natural development direction, this time for our retail business. We are successfully delivering our strategy. Our growth plan is to expand into more foreign markets, and this is exactly what is happening. I am confident that the partnership between our two countries, grounded in our shared history and experience, will allow us to fully leverage the ORLEN Group's capabilities and strength of the market,” said Daniel Obajtek, President of the Management Board of PKN ORLEN.
Under the agreement signed with MOL Group, PKN ORLEN will acquire 144 service stations in Hungary, placing it well on track to achieving its strategic objectives. In a single asset swap deal, PKN ORLEN will gain an over 7% share of the Hungarian retail market, becoming the fourth largest fuel retailer in terms of the number of service stations in that country. PKN ORLEN’s share of the Hungarian wholesale market is already at 5% in the case of gasoline and 4% in the case of diesel oil.
PKN ORLEN expects to keep expanding its foothold across the region and develop its retail segment. Going forward, retail is seen as one of the key drivers of the ORLEN Group’s strong position both at home and abroad. Over the recent years the segment has posted record-breaking results and, in line with the ORLEN2030 strategy, it is to be further strengthened, mainly by expanding the network of service stations. By the end of this decade, the ORLEN retail network in Central and Eastern Europe is to comprise at least 3,500 locations, of which the share of foreign stations is to go up from 37% to 45%. The effects of these efforts will translate directly into the Group’s financial performance, with retail EBITDA estimated to increase one and a half times by 2030, to about PLN 5bn.