CEO of Greenoaks Investments in Georgia (Batumi Oil Terminal)

“The secret of our success is the combination of investment, management and staff”

Since 1999, the Greenoak Group has invested over US $ 200 million in Georgia. The result has been 3 developing businesses, Batumi Oil Terminal Ltd., Petrotrans Ltd. and the Batumitex Ltd.. Since mid year of 2006, the inclusion of the Batumi Sea Port Ltd. gives the opportunity to build a fourth new business.

The Greenoak Group employs close to 4,000 people in Georgia whereof 1,400 are in the Oil Terminal. Indirectly the group’s activities contribute to the employment of more than 20,000 people as 65% of the Georgian Railway business is with our group. Since privatization, the transshipment volume has increased from 3 million tons to over 10 million tons in 2006.

“Regarding changes in the energy sector, there is a huge difference for the consumers as they have sufficient electricity almost every day. In the future we will also be involved in the energy sector. We are in the process of constructing a power plant”, says Mogens Hansen.

Could you please tell me about the history of Batumi Oil Terminal?

Batumi Oil Terminal was founded in 1883 when the Nobel Partnership built an oil storage in Batumi. In 1999 it was privatized by the Greenoak Group. Since then Batumi Oil Terminal has been upgraded to high international standards. In terms of important events, one can mention the creation of Batumitex in 2001, which today employs close to 1,100 staff members. This was mainly to assist the local employment. The Creation of Petrotrans in 2004, a sister company to Batumi Oil Terminal, was established to increase the efficiency of the route, improve planning and logistics as well as provide a combined one stop transportation and transshipment service from Gardabani, the Azeri-Georgian border, to FOB Batumi. During 2005 we started to work with major international energy companies, such as Exxon Mobil BP and others. In 2006, Batumi Oil Terminal acquired important assets such as the Oil Base Company. Recently our group won the tender of the 49_ year operating lease of the Batumi Sea Port.

According to my information, during the period of Greenock’s ownership the company has increased three times and the company is completely rebuilt. What has been the secret of this success?

The secret of our success is actually a combination of investment, management and staff, improving the planning, logistics and the commercial activities. Following the privatization,
a complete reorganization was carried out; focusing on building a new management team, accompanied by an aggressive modernization, expansion and marketing program.

Nowadays, what is the most important objective of Batumi Oil Terminal?

The objective is to remain a confident, safe, reliable and competitive route for transportation of oil and oil products from the Caspian region towards Europe; as well as continue the improvement and development of the company, providing value to the customers.

The Batumi Oil Terminal has the capacity to ship 15 million tons of oil annually… What is the competitive advantage that Batumi Oil has comparing with other companies?

First of all it can be higher. It all depends on the combination of the products. The advantage of Batumi Oil Terminal is that it is a well managed company, which is known in the market as a reliable, trustworthy, professional partner. As mentioned above, compliance with all international standards has resulted in a long term partnership with the worlds biggest energy companies. Obviously we have to be competitive with the price too. Technically, Batumi Oil Terminal will continue to have certain advantages as it can handle over 20 different types of oil and oil products, starting with jet fuel and ending with Vacuum Gas Oil, which freezes at -42 C. Constant development, improvements of technical facilities, development of management as staff, as well as long term partnership with various major oil companies strengthen the Terminals position on the competitive market.

As a foreign investor, how do you see the economic situation in Georgia and what have been the most important changes in energy sector in the last years?

The economic situation is improving. The income to the state budget has improved. Improvements on corruption and some more business activities have emerged. This all contributes to the future development of the country. The main drive for future development is obviously a lot more foreign investment. But a new government needs time for this major change they have begun.

In your opinion, what are the advantages that this country provides to international companies?

Compared to other countries there is not any extraordinary assistance in place to attract foreign investors, such as certain tax relief’s for a certain period of time. The low labor cost is obviously an advantage for any labor intensive business.

Government officials as well as European organizations are saying that Georgia has the key role of insuring global energy security. In your opinion, why does Georgia have such an essential role?
Because of its geopolitical position, being a transit country for certain important energy resources, Georgia is playing a significant role in insuring the global energy security.

What are the prospects of your company development in the years to come?

Presently the company operates a state-of-the-art facility to the highest standards, with professional management and a business development operation that provides the basis for a strong market position going forward. We will continue to leverage on our oil logistics seeking new business opportunities, both inside and outside of the Caspian region.

Your personal experiences are also of interest to us. Could you tell us about your career?

Before joining the Greenoak Group I had a long career with an American international company in the FMCG sector starting in Denmark. During the last 23 years I have been managing various companies in several countries like Costa Rica, Panama, South Africa, USA and Turkey. After joining the Greenoak group my first task in Georgia was to create the Batumitex Company. 2.5 years later I became the Director of Batumi Oil Terminal and since beginning of this year, I have assumed responsibility as CEO of our Naftrans group. Naftrans owns Batumi Oil Terminal and Petrotrans. Lately I have also assumed overall responsibility of the Batumi Sea Port.

What has been the biggest satisfaction during the time you have been managing the various business in Georgia?

To be a part of a fast developing group with a large number of staff and management, leading them towards the company’s common goals.