Operations in fuel trade require enormous investments. This is why the Baltic market may see a consolidation, says Circle K Baltic vice-president Skirmants Macuks.
“Everyone needs to invest, everyone needs to follow the rules and meet environmental standards. It’s no longer the simple business it used to be. To be precise, in a couple of years from now it may be very difficult for some to even survive, because you need to invest enormous amounts of money into this business. This is why I am rather confident our country will see a consolidation,” said Macuks.
He said negotiations were always underway in the business environment, and if someone offered a good price, deals could be made. Circle K, too, is always thinking about ways to expand.
“This is our domestic market. Our owners are surveying Baltic States very seriously despite all the threats and war. We receive investments, which we need, because Baltic markets still haven’t developed fully if we compare them to, let’s say, Scandinavia. We can still see areas where it is possible to expand, and we have plans to open new petrol stations in Riga, Vilnius and Tallinn,” said Macuks.
He said there were ten locations in which Circle K wanted to build its petrol stations, and they were more or less equally distributed across all Baltic States. In Latvia there are three locations in which the company wants to acquire construction rights – one in Riga and two in Pieriga.
When asked about financial forecasts, Circle K Bailtic vice-president said the company had a plan to “grow by a double digit”.
“This is a rather large ambition. However, we can see great potential once companies of the three countries have combined into one. There is a lot we can learn from one another, and there is good synergy. This was one of the main reasons why we created one company in Baltics – to speed up growth,” stressed Macuks.
He also said that Circle K now focused on adding car wash services to their petrol stations in the Baltic States. In the new financial year, which started on May 1 for Circle K, it was planned to invest int coffee and food trade. Circle K in Latvia also plans to introduce self-service checkout, which is already in testing in Lithuania and Estonia.
“Half of our investments this financial years will go towards new petrol stations. The other half will go to existing petrol stations to expand them, adopt new services and products, as well as modernise equipment,” stressed Macuks, adding that investments would reach several dozen million euros.
In the previous financial year, Circle K Latvia’s turnover was EUR 633.623 million, up by 35% YoY. The company profits went down by 13.7%, to EUR 7.833 million. (BNN)