VENAN HADZISELIMOVIC, EXECUTIVE MANAGER OF HIFA-OIL GROUP - ANOTHER CQUISITION TO FOLLOW IN METAL INDUSTRY AND OPENING OF NEW PLANTS
The company for oil and oil derivatives sales Hifa-Oil from Tesanj, has recently bought the German company with the longest tradition in manufacture of PVC profiles - LB.Profile. The company acquisition known for innovation in this area happened after Euro-Roal, daughter company of Hifa-Oil Group, has set up a partnership in October last year, for the LB.Profile product distribution on the market of B&H. In his interview for eKapija, the executive director of the Hifa-Oil Group Venan Hadziselimovic reveals this will not be the only such move in this year. Namely, the company from Tesanj plans another acquisition in the metal industry, which will strengthen the position of the daughter company Euro-Metali on the domestic and regional market. Moreover, Hadziselimovic announces the opening of new plants which will expand the existing capacities of the company this year. Hifa-Oil is still in leading position on the domestic market in oil and oil derivatives market, with 20% share on the market of white derivatives, and the leading position in the region in the segment of black derivatives. eKapija: Hifa-Oil Group has recently bought the german manufacturer of profiles for doors and windows LB.Profile. This is also your first foreign acquisition, which is one big step for a domestic company. What are the future plans by that acquisition, how will it contribute to the market of B&H? - Our first foreign acquisition will enable Euro-Roal as leader in B&H in distribution of aluminium, inox, and now also PVC profiles, besides strengthening its position on the doemstic market, to perform stronger on the regional markets as well as in the EU. LB.Profile has been developing systems for windows and doors for over 50 years, with great competence, top technology and accumulated knowledge. Nothing is going to be the same after this acquisition. This means we will not base our growth and development on the organic growth of Hifa-Oil and its daughter companies. Foreign acquisitions have become an inherent part of our business. Our goal is the domestic, regional and European market with a strong Hifa-Oil and our technologically superior daughter companies. eKapija: In what ways do you plan to strengthen the Group 's position on the regional and the EU markets in the next period? Which markets are you aiming at?- We are present in 9 countries of the region with our products and services. Hifa-Oil has kept the leader position in distribution of black derivatives, and on the regional markets the status of the most serious and high quality distributor is still being maintained as proven by the cooperation with the biggest companies from the area of asphalt paving in Austria, Slovenia, Croatia and other countries of the region. Furthermore, according to all indicators Hifa-Oil has grown up to more than 20% of market share in the sales of white derivatives in B&H. Last year has been completed with a total realisation of around 300.000 tons of different derivatives in the countries of the region. Adding the last acquisition in Germany to this, as well as new ones we intend to realise, we believe that our position on the markets of metal profiles and steel, then pellet and raspberries on the regional markets and Europe will significantly improve. eKapija: the German LB.Profile is the seventh daughter company of Hifa-Oil Group. Are you planning any other acquisitions during 2017? In which sectors? - The acquisition of LB.Profile has the goal to make our daughter company Euro-Roal to become the main distribution center for PVC profiles for the market of Bosnia and Herzegovina, as well as in the Balkans region, with a share increase on the EU market and further. One more acquisition in the metal industry is planned, its goal is strengthening the position on the domestic and regional markets of one of our daughter companies - Euro-Metali. Moreover, beside the acquisitions I talked about, a capacity expansion of companies is planned. Euro-Roal will significantly expand its capacities in this year. The capacities of Euro-Metali, company for sales of products and semi-products of black metallurgy, will also be expanded. Besides the planned acquisition, this year the new facility of 3.500 m2 will be put in use. A capacity expansion is also planned for Euro-Stil, Hifa-Oil sister company which is one of the leaders in distribution of pellet and briquets in B&H, not only in this business segment, but also in the segment of purchase, processing and storing of fruit and vegetable. For 2017 we plan to expand the range of agricultural crops which this company will buy, as well as a more aggressive performance on the domestic wholesale market for fruit and vegetable. eKapija: What business result did the Group achieve in 2016? Are you satisfied and how much do they vary in comparison to the previous years?- Hifa-Oil and all its daughter companies Euro-Roal, Euro-Metali, Euro-Stil, Euro-Power, Petrobit and Bitrol Slovenia, and now LB.Profile, have operated successfully last year, completing 2016 with increased shares in the market and each in its own branch. It is that successful business over the years that set up the preconditions for new acquisitions and expansions not only on the domestic but also on foreign markets. Hifa-Oil is the company from which everything emerged and it is natural for it to be the generator of development of the development of the whole Group. It shall be like that in the future. eKapija: Which are the most significant business successes of your companies in 2016? How big is their market share now? - From all the projects last year, we would point out the completion of the preparations for starting the supply of airlines at the airport in Sarajevo. Additionally, the preconditions for terminal business are set what provides a supply alternative of derivatives in B&H, in order to achieve supply security of the Bosnian market. The recertification according to standard ISO 9001 has been done. We were again chosen for the best supplier for the NATO forces in B&H, and we also mark further supply of road bitumen for the construction of road infrastructure in 9 countries of the region. Hifa-Oil has kept the leading position on the domestic market in distribution of oil and oil derivatives with 20% share on the white derivatives market, and the leading position in the countries of the region in the segment of black derivatives. All companies have had a positive business turnover, along with increase of the number of employees. At the moment, the whole Group employs around 260 employees. eKapija: It is recently announced that you plan 10 mil BAM worth investments in important projects. What will be the focus in the field of investments and what do you prepare for the domestic market in 2017?- The investment programs are mainly connected to the modernisation of terminals we already acquired, as well as capacity expansion of our companies. These are strategic moves which will further strengthen the position of Hifa-Oil as well as of our sister companies on the markets where we do business. Beside that, a recertification according to ISO 14001 standard which refers to ecology is planned, as well as the construction of petrol stations in the ownership of Hifa-Oil. eKapija: As announced by the management, Hifa-Oil plans to modernise the biggest oil terminals in B&H. Which terminals are we talking about and what does that investment stand for? - Hifa-Oil has been chosen for the most competitive bidder in the purchase of the Terminal of liquid fuels with a capacity of ca. 12 840 m3 which were in the ownership of steel mill Zenica, and which due to no upkeep or use for a longer period of time, now requires significant technical-technological changes and investments. The initial, and the subsequent investment have huge significance. First social, as with the payment the long period receivables according to different grounds are being solved, including the liabilities for certain employees of the steel mill. There is also a contractual obligation of employing a certain number of existing people, and according to the activity plan also new employees, which contributes to the unemployment reduction in Zenica. In the end, as for the business aspect, Zenica and Bosnia and Herzegovina get the biggest and state-of-the-art private terminals with new equipment and technologies, and the customers and the market, as well as the country itself, security and a long-term supply stability. eKapija: At the end of the year, the Parliament has rejected the increase of excise on fuel in B&H. What is your opinion about that, considering that the authorities intend to spend that money on the construction of the Corridor 5C?- The Corridor 5C, as well as other planned corridors through Bosnia and Herzegovina, should have been constructed 40 years ago, at the time of the former mutual country. There was money, because Bosnia and Herzegovina was one of the republics with the best share between goods and service exchange with the foreign countries. We can only speculate why that has not been done, but what is left is the fact that Bosnia and Herzegovina has entered into its independency without one kilometre of highway. It is up to our generation now to build this country, and one of the preconditions of the development are the road communications. Furthermore, we need fast roads which would have the goal to connect big cities in our country, then modern railway and aviation corridors, as well as information-communication corridors. One way of financing the construction of highways are the excises. Talking about business from the aspect of oil companies, and the end users, it is reasonable for the excises to be smaller. However, on the other hand, it is clear that such a way of financing important infrastructural projects are required by creditors, if that is the best way, or if there is a better one, I want to believe that those who make the decisions know best. Hence, if it is of public interest to build highways, if it is the interest of the citizens of this country, neither we should be the excemption.