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All fuel market participants certainly will agree that the advent of large, vertically integrated companies has brought many changes. A sudden reduction of wholesale dealers and middlemen between refined-product producers and the consumer is among the most important changes. Some believe this process continues to progress. However, it is still possible to build a successful supply company from scratch if this company offers a new, efficient solution to a client's problems.
When refined-product output reaches into the millions-oftons, oil companies find it difficult to work with suppliers that buy less than a certain fixed volume.
Therefore, it is more profitable for the needs of a smaller client to be cared for by a supply company that buys refined products in big volumes, divides the purchase into smaller volumes and then sells these volumes to smaller consumers. However, it is often the case that trading companies satisfy themselves with a stable income, and thus do not strive for growth. Much of their work is based on personal relations with suppliers, leading to a more intricate and sometimes chaotic business environment, which explains the frequent changes among fuel-market participants.
Taking note of this situation, a group of investors realized that through a more professional approach to the business greater success could be achieved. Thus, on Feb. 23, 2000, in the city of Kstovo in Nizhegorodsky region, the Complex-oil company was registered. Coincidentally, the Russian government issued a decree that from that same day, Homeland Defender's Day would be a public holiday.
What mainly distinguished this newcomer was a solid scientific base underlying all aspects of its work. "We strive to apply the most up-to-date methodologies everywhere: in marketing, in organization of business-processes, in customer-supplier relations management and in accounting," said Dmitry Parfenov, president of the Complex-oil group of companies. "Many of those methods are widely known but only a few companies practice them. We also use the latest methods in different fields of business organization, and in order to get familiar with these techniques, we use the services of leading consulting firms: Rosexpert, PricewaterhouseCoopers, Ernst&Young and others. We understand how to apply economics to the real world, and this enables us to consider the interests of our clients, suppliers and investors more efficiently and gives us an edge over our competitors," added Parfenov. In Russia, It is commonly held that Complex-oil's business model is a waste of time and money - there is no need to think, just do business! Some people are skeptical about such business practices as paying taxes, abiding by the law, through planning, adherence to plans and budgets, the development of different corporate behavior scenarios for particular market situations and the professional selection and training of personnel. It may be that during the initial stages of development a company loses some potential profits, but it would be difficult for a modern, profitable business to grow otherwise.
The concept adopted by Complex-oil is that the client should be provided with a wide range of services that may be required during the supply process. The company pays special attention to quality control, the search for rolling stock (tank-wagons), deliveries scheduling, monitoring the shipment process and of the situation regarding the parties' commodity-money obligations. The goal of all this attention to detail is to reduce service time. This concept demands a thorough preparation of interaction algorithms, the application of the latest business-technologies and a team of experts.
The results of this scientific approach have been the fulfillment of the intended development plans, and an impeccable reputation with clients, suppliers, banks, the controlling organization and the tax authorities. Today, instead of just refined products, the company offers an innovative new system for the supply of refined products, including delivery by various transportation, quality testing and real-time product-tracking during shipment. Complex-oil also boasts a connection with the tank-truck driver, a prompt drawing up of shipping documents, the signing of verification acts and final payment settlements in three to five days. This last element is particularly important, as it is common knowledge that large companies often spend months on verification acts and return of overpaid amounts.
Despite difficult start-up conditions including a competitive market and high costs of entry, after only two years of operation, the company's average monthly turnover has reached nearly 100 million rubles, a twenty-fold increase from its early days. Complex-oil has bought the building where it used to rent office space, and has opened successful branches in Moscow, Nizhny Novgorod and a representative office in Mordovia. Today, the company is active in nearly all of European Russia, some regions in the Urals and Siberia, and also Ukraine. The company works with such banks as UralSib, Petrokommerz, Alfa-Bank, Nizhegorodpromstroybank and Sberbank.
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The company's success can also be credited to the active participation of its employees. The company's specialists constantly strive to achieve greater organization and quality, and are eager to become the market leader. Today the company has nearly 170 employees. They are intelligent, educated, motivated and their minds have not been infected by outdated notions regarding business operation. Moreover, they understand the necessity of contemporary, efficient management and know that working and training are two parts of the same process.
In order to constantly improve the employees' professional level, the company invites lecturers from the Gubkin State University of Oil and Gas, the Lobachevsky Nizhegorodsky State University, certified business-trainers PMI, the leading experts from ENSPMFI and the French Institute of Oil and BP traders. The seminars organized by Eco-Technics Consulting Ltd., and newspapers such as Vedomosti and The Moscow Times are also a great help. However, the leading role in personnel training belongs to the company's senior ior manager's authority; it also encourages practical applications for theoretical knowledge. "Fifty per cent of my time is spent on personnel training," says Parfenov.
The Group provides its clients with a complex of services which may be needed in oil products provision. The Company is aiming to have the most luring offers for its clients which is stated in development plans of “Complex-oil”.
“Complex-oil” Group delivers oil products from Russian oil refineries to European part of Russia, to the Urals, to Siberia.
Offices of the Company are opened in the major Russian cities – Moscow, Saint-Petersburg, Nizhny Novgorod, Samara as well as in Kurgan, Smolensk and Nizhny Novgorod (Kstovo) regions. Since 2006 representatives of the Group work in Berlin.
Due to a developed providers’ list all companies within the Group always have oil products needed by clients. One of the major advantages of the Group is direct contracts with major Russian oil companies with which “Complex-oil” has close mutully beneficial partnership relations.
“Complex-oil” Group mission is to make working with it as convenient and beneficial as possible thus guaranteeing its clients oil products stocks and the best cooperation conditions. The Company developed special discount schemes, programs of special crediting which are implemented with the help of banks. The Company also helps with products delivery and its shipment in the shortest time possible.
In its activities the Company is sticking to international standards of quality and management which is proved by the fact that the Group received prestigious international professional awards. For instance it was awarded Golden medal from Swiss-Russian business-club for perfect business reputation of the Group, in 2007 the Company received international award for quality – “European Standard”.
Development strategy of the Group aims at entering European and CIS markets including Europe, Kazakhstan, Byelorussia, the Ukraine, Baltic republics and Scandinavian countries. In 2006 the Company purchased a large network of storage farms in Germany (TABEG which has 7% of independent oil products storage market in Germany) and thus became a full member of German fuel market. We are sure that further economic activities at foreign markets are beneficial for the development of international cooperation between private companies as well as it helps the Group to better the quality and increase the quantity of services for clients within the country.
During 8 years of successful work the group gained perfect business reputation and was included into the Register of trustworthy partners of Russian Chamber of Commerce. During the years of cooperation “Complex-oil” Group and investors created the fastest developing Russian company. Leading Russian banks and other partner companies trust profitability of investing into the Group.
In our opinion, the story of Complex-oil confirms the necessity of independent supply organizations in the fuel market, provided they further the development of a civilized business environment, applying modern business practices in order to fulfill each client's needs efficiently and affordably.
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INTERNATIONAL EXPANSION
