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Dec 31, 2013 13:00 EEST
December 31 (SeeNews) - The development of the gas trading market in Southeast Europe (SEE) is still at a rudimentary stage as each of its fragmented sub-regions functions separately and in a different way compared to the others, Robert Golob, president of the GEN-I Group management board, said.
"Here, there is plenty of room to boost the scope of business operations, " Golob said in an interview for the 2013 edition of the SeeNews TOP 100 SEE ranking. "Currently, the consumers are the ones paying the price for the insufficient level of deregulation of these gas markets," he added.
Gen-I Group’s core activities include international electricity trading, which is conducted through a number of energy exchanges and organised electricity trading platforms and using various forms of bilateral trading, as well as the sale of electricity and gas to end-customers. The Krsko-based group has subsidiaries in Austria, Italy, Germany, Hungary, Romania, Bulgaria, Serbia, Bosnia and Herzegovina, Montenegro, Macedonia, Kosovo, Albania and Greece.
Following is the full text of the interview:
Q: What is your view of the competitive environment on the gas and electricity trading markets in SEE?
A: These are two different markets and two different stories. On one hand, the electricity trading market in the SEE region is very well developed and well regulated. Apart from some unilateral interventions by individual governments, the market is functioning well and business is thriving. On the other hand, the development of the gas trading market in the region is still at a rudimentary stage as these are still fragmented sub-regions, each functioning separately and in a different way compared to the others. Here, there is plenty of room to boost the scope of business operations. Currently, the consumers are the ones paying the price for the insufficient level of deregulation of these gas markets.
Q: In which SEE markets do you expect to see the fastest gas/electricity sales growth for Gen-I over the medium term?
A: All of them! And not only markets in the SEE region, but also the neighbouring markets. Only once it sets foot on as many markets as possible, GEN-I would be in a position to offer competitive prices – simply because of economies of scale and the versatility of its offer – and be a competitive player in the trading business. With regards to end-users, there are still countries that haven’t completed the process of liberalisation of this segment as prices still depend on the energy policy of each state.
Q: How is Gen-I performing on two of its newest segments, the gas supply market in Slovenia and the electricity supply market in Croatia? What are your medium term goals there?
A: We have excellent results in both markets. In Slovenia, in a year since entering the gas market, we have gained a 10% market share. Over the next three years, we expect our market share to double and reach 20%. But our key achievement is that in the first year of doing business on the gas market in Slovenia, GEN-I has succeeded in slashing gas prices by 40%, thus aligning prices in Slovenia with the average gas tariff s in the EU. In Croatia, our initial results are great and our plans even more ambitious. In just three months since we entered the electricity market for end consumers in Croatia, we have gained a share of 4.0% of the total market and we expect to reach 17% in three years.
Q: What are your medium-term goals in terms of the development of new products and expansion to new markets?
A: We are continuously investing in the development of new products as this is the only way we can be competitive. With regard to expansion to new markets, the question isn’t whether or not we will enter new markets, but when this will happen! Conditions that need to be in place for us to enter a particular market include defined and functioning sector legislation and price levels. Over the medium term, we plan to enter one more market in the region. At the moment we are assessing the business aspects of that venture before we choose the specific market.
Q: How is Gen-I’s sustainability and social responsibility programme aligned with the group’s business development strategy?
A: For us, social responsibility is not a PR stunt – social responsibility is our business model. Our business goal is to provide consumers with the lowest possible prices for electricity and gas. We share the same goals with our consumers – to have the lowest prices in the market. We make the decision as to which market to enter by investigating where the monopolist is “squeezing” its consumers the most. That’s why GEN-I is a socially responsible company by its nature.
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