Having in mind that Jihomoravska Plynarenska plays a very important role in the development of Brno which is the second largest city in the Czech Republic, could you give us a brief historical background about your company ?
Our company was founded as a shareholding company in 1994. But the tradition in Natural Gas production was already very old and if returning back to the roots, the first city gas company was open in Brno in 1848.
Having in mind that our readers are businessmen and they like figures. Could you give us a brief overview of your financial results and what were the turnover for 1998 and what are your expectations for 1999.
Our company sells annually sells about 2 billion cubics in a year. We supply about 67 per cent for our corporate customers, for householders 36 per cent and the rest for small and medium clients. In general our company supplies natural gas for 550 thousand clients. Annual turnover in our company reaches about 10 billion CZK in 1999.
And what about the profit, how many per cent of that turnover ?
Before taxes the benefit makes 800 mil CZK. Which is about 8 per cent.
I would like to go back to a part of the first question, I was expressing your role of the company in the development of the city. How many people do you provide with gas ?
So the whole number of our clients make 550 thousand and from these 2600 are the corporate customers, and 31000 represent small commercial clients. Our area is over 50 thousand km2 large.
When we are looking at your financial results, having 10 billion turnover with about 8 per cent of profit it makes your company successful. What have been the main investments you did in order to upgrade the infrastructure to be more competitive ?
The most important investments for us are investments into building a local network. Our annual investments make about 700 to 800 millions CZK. The biggest share of it goes to gasification.
Concerning this and these investments, what is your strategy to face the European Union liberalization and are you doing to be closer to your clients ?
We are building the trade centers, commercial centers in order to serve about 30.000 clients. In fact we are diversifying the settlements of our service centers. From one point of view our clients can contact our assistants in those centers. In order to be much closer to our clients we are now building at present time the information service center. Our goal is to make our contact with customers as close as possible through the automatic system, for example cellular phones. Our goal is also to let our customers know what the company is able to provide for them and what the company is not ready to provide.
I know that Bayerwerk is present in the shareholding of the company. How does Bayerwerk helped you with all the investments you have done ?
At present all the companies which are interested in Jihomoravska Plynarenska have just bought the shares of this company. There were no investments so far to our company. But they paid a pretty much high price for the share. This is the usual way how to make commerce, this is not the real way of entering the company. Based on this trade Bayerwerk right now has 35.5 percent of shares which is the biggest share after the state.
If I am correct, this weekend the government decided to speed up the privatization process of all the public utilities like the Energetika or Plynarenska companies. So how do you see the future privatization of your company ?
This is true that this weekend (29th of January) our government elaborated the policy for the energetic sector and one of the major points was how to rise the state share in their own state gas company Transgas. Based on the agreement between the two major political parties ODS and CSSD they have already changed a little bit the way how the privatisation will look like, there will be some changes in the company Transgas itself. And then the company Transgas will get the rights to get involved in this process . Then they can get the right to buy shared of Jihomoravska Plynarenska or some other gas company.
And do you have a timetable for that process ?
Well I can see that the whole year will be devoted to elaborating the new policy and changing it to Transgas. And of course there will be again consultations with the advisors who will work on separate memorandum about the work of the separated companies. And as a result of all this work there will be a resume done of all these distributing companies to potential gas suppliers. I do not want to predict the work of our government on this problem but I think that it will take the whole year to solve all these problems.
Being one of the most important company of the region, what is your opinion about investment climate in this region ?
I would say this region is a general mix of development of industries, let us say agriculture, textile and production of machinery. It is true that after changes in the society there were certain crisis observed in the development of region. There was some decrease in production of textile and machinery. There is also a certain decrease in agriculture production. We can say that agriculture now uses less gas for production and reproduction of the products if you compare it with 1989. If I have a close look at all these industries I also think about what kind of market I have with selling gas to those companies whether they will consume more gas or whether there will be certain decrease in the consumption. We can say that there was certain increase in selling gas for the households. But I would not say that this situation will stay forever, there are certain limits in householding sector too and we can expect that after some certain period of recession in Czech economy there will be rise a again in leather production, in glass industry and in machinery. If you take production of tractors by factory Zetor, it will never produce more than 10 thousand tractors a year, it certainly would not produce 30 or 40 thousand tractors. Here we have to talk about certain perspectives. I can not define in which way will be the development in the region but we can certainly say that there will be a development in information system and some other sectors.
| To come back to your company. You mentioned earlier some investments you did in order to upgrade and to be more competitive. What still has to be done in order to be ready for the market liberalization ?
Our company is mainly orientated for the selling and distribution of gas to the city . With the European Union legislation there will be some separation between trade activities and distribution. Right now we are doing both. Right now we are working on the new strategy of our company to be more competitive in the new environment. We are trying very efficiently to finish the gasification of our region. We are trying to find the customers who are looking for heating more than for gas supply and we are trying to find the capital investment companies which would be more interested in the final product. We are also ready to support selling of the gas to automobile industry. We also want to use the natural gas for the summer period. Our interest is to make the best supply and distribution of the gas to our customers and we are going to provide this service as best as possible. We want to provide the whole spectrum of services such as consultant services, gas meter services. And as far as it will be good for us we are going to offer our services not only in spectrum of this region but we would also like to sell it out of the country. This will also depend on the interest of our strategic partners.
Our readers are always interested in new business opportunities. In which areas of your activities are you interested to attract any investments ?
We have not discussed this matter with potential partners so we do not have specifically elaborated the strategy and policy of the company and we have not discussed it with our major shareholders. It is true that Bayerwerk is more or less an electric company. So we suppose that we as the biggest distribution company in the range the Czech Republic can awake interest in the point of view of gas supply.
Can you please mention some investment opportunities ?
A 13: All the activities we have to support by financial means. According to the business plans until the year 2002 our investments range is from 800 mil CZK to 1 billion CZK per year. In this business plans we are going to do a lot for the renovation of our gas system. The other big financial amount is the purchase of gas networks owned by municipalities. And the third point of our financial interest is capital interest, it means to take part in building and renovation of co-generation.
So the doors are open for any new partners ?
Yes. We already have some partners which work with us, for example Jihomoravska Energetika.
Your company is also composed with human resources. Could you give us the secret of your own staff management ?
I think it is the way for more qualified people who already got to know the computer systems and utilities and have clear idea how to use all of them. The managers of such distribution companies have to be informed about what is going on in the whole world, not only to know what is going on in their own country but to know what is going on everywhere. The process of restructure of the company will never be finished. The influence of the outside system will be always the necessity point for the creation of the new face of the company. It will also have to be people who can speak and negotiate with the other on the foreign level. It means that they will have to speak one or two foreign languages.
What has been your biggest satisfaction at the head of the company ?
The biggest interest of myself and my colleagues was to have a balanced development of the company and have a certain conception and certain program which will be fulfilled. Of course this way was not so easy as you would have thought because for example prices of natural gas did not reflect the expenses for our work. We managed even with those losses. We paid a lot of attention in gasification. It is also true that a lot of means was paid for the districts and regions themselves. And it is up to us to return back the investment to the regions and cities. For local and international investors, we want to be a company which is clear and transparent with its strategy.
What would be your final message to our readers ?
I would like to tell the readers that they should appreciate the speed that we had to change because of the changes in the whole society. Reforming from one system to another one, from one market background to another one. From one way how to make commerce to a different system. I hope they will evaluate this that it was not easy for us. And of course if they will talk to the gas company no doubt they will always have very good services. |
