Net profit of Essar Oil UK, which owns and operates the British refinery Stanlow, fell 4.2 per cent in the year ended March, because of major turnaround work that took place at the site from early January for much of the quarter and temporarily hit throughput.
Following the “complex and challenging” turnaround period, the company says its on course to deliver margin improvements of $75 million to $80 million annually, and remains optimistic about its outlook for the UK as well as recent initiatives to cater to gasoline export markets.
Presence in aviation
Essar Oil UK CEO S Thangapandian said the company continued to grow its presence in the aviation sector – supplying jet fuel to major airports in the UK, and with a 12 per cent share of the overall market nationally – as well as expanding its retail business (it plans to have 400 within the next five years).
The focus on jet fuel will help the company withstand challenges in the automotive fuel market, including the renewed policy push in favour of electric cars in the UK.
During the year, the company also leased storage, blending and jetty infrastructure in Rotterdam to better enable it to directly supply to export markets, such as Nigeria.
The company has invested over $850 million into Stanlow since acquiring it from Shell in 2011, enabling it to raise its margin to $4/bbl above the benchmark from $1/bbl in 2012.
Contrary to the concerns around Brexit expressed by other business leaders, Thangapandian said he believed the impact for the company would be a positive.
The company was currently “bound by European guidelines” that left manufacturing businesses such as Stanlow on the backfoot, he said.