Oil&nonoil 2018: Elena Amadini, Veronafiere

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This year, 2018, is seeing great changes and a reorganisation of the industry. How will Oil&nonoil underline this ongoing transformation and its impact on the sector?

Oil&nonoil is a special event, in that it brings together specialised niche sectors of an industry that is vital to our country’s entire economy. The fuel distribution industry as a whole, from the depot to the pump, ensures the movement of people and goods, generating considerable tax revenues (the mineral oils sector was worth around 39 billion euros in 2017, according to estimates from Unione Petrolifera). Every day, millions of people purchase fuel, yet they do so without giving a thought to the underlying work of hundreds of thousands of people and the constant technological updating that ensures we are all able to “fill up” safely whenever we need to.

The thirteenth Oil&nonoil fair, which will run from October 9th to 11th in Verona, coincides exactly with the fifteenth anniversary of the event’s launch. The network has changed a lot since then: we now have a third fewer filling stations (currently 20,500), whereas natural gas stations have almost tripled in number (1,218 at the end of May) and there is an extensive national network of LPG filling stations and over twenty LNG stations. Furthermore, white-label stations now carry more weight (accounting for 52% of the network) and oil companies are investing less in the downstream oil business. The sales volume, especially on motorways, is falling all the time (currently -53% on 2010), a trend that has continued even during the latest period of recovery (-1.3% for petrol and -3.9% and -0.5%, for diesel fuel in the first nine months of 2017, according to the preliminary data issued by Unione Petrolifera), and operators are therefore being forced to find other ways of generating income at service stations.

Taking as our starting point data from the survey of filling stations “Anagrafe degli impianti di distribuzione dei carburanti”, which will be definitive data and therefore give a clear picture rather than a blurred snapshot of the industry, in October we aim to provide an outline of the future prospects within the sector, taking a closer look at the changing role of its leading players and highlighting the existing growth opportunities.

The more astute entrepreneurs take into account the innovative possibilities offered by technology, as well as the statistics and the requirements by current laws and regulations, and then find the right balance and adapt their programme of investments to this operational scenario.

 

In particular, how are service stations going to change in the short and medium term? And how will the fair illustrate this evolution?

The changes we are seeing are gradual and sometimes slow, but they are irreversible. By analysing the interaction between technological and social changes and the various international and macroeconomic balances, industry experts are able to outline possible short-term future scenarios, yet without straying into the realm of science fiction. We try to make sure that, through the content of Oil&nonoil, we offer insights into the more long-term future, but we nevertheless consider it a priority to provide a set of useful and appropriate responses to the needs of hundreds of independent businesses, service station owners, car wash owners, technicians and hauliers.

We have found that our “representation of the transformation” is achieved almost automatically, as this transformation is reflected in companies’ communication choices and in information we receive from the industry associations we work with. Similarly, the configuration of the exhibition area reflects the evolution of the sector, anticipating the directions in which it is likely to move.

Service stations will become even fewer in number, making it necessary to come up with new ideas in order to attract customers. We will probably never have service stations of the kind found in Germany, but at the same time operators who fail to provide the right services for today’s community on the move are going to struggle to compete.

We have chosen the subtitle Energy, fuel and mobility services. More than just an empty slogan, this phrase represents our reading of the future. Indeed, it encapsulates the transition that is taking place, involving fossil fuels, energy and services – all these are necessary elements and they all need to be further developed, without setting them in opposition to each other and without cutting any of them out of the picture. It is all about responding to collective mobility requirements, but at the same time modulating what is offered in order to meet today’s new needs.

The managers of companies with interests in this sector know that to increase their business in the fuel distribution industry they need to be present at Oil&nonoil, which in Italy is the only event dedicated to this sector on a national scale.

 

And would you say that “alternative fuels” are going to grow in importance, given that the market is evolving in this direction? Can you tell us anything about the fair’s participants or partnerships in this area?

As I have said, we are not just a passive showcase for the market, rather, we try to anticipate its development. We have been talking about alternative fuels ever since the time they seemed to be little more than a choice on the part of environment-conscious drivers wanting to stay true to their ideals. Now, of course, they represent one of the pillars of the business and are the focus of conferences and workshops.

Natural gas in its various forms (gas, liquefied, biogas) is strongly represented. Italian industry is an international leader in this field and will certainly seize the growth opportunities offered by LNG both in the heavy goods haulage sector and in order to expand the network of CNG distributors. The natural gas sector would also benefit from appropriate proposals from the automotive industry of course.

In Verona we will once again be partnered by Assogasliquidi, Assogasmetano, Federmetano, NGV Italy and NGVA Europa, and Cib. For us, these associations serve as a point of contact that allows us to recognise and understand the signals coming from operators and industry. Furthermore, we will be looking at the issues of safety and the traceability of fuel transport, also as a tool in the fight against illegal practices.

Finally, even though we are still talking in terms of very small figures, we will continue to analyse direct investments in electric mobility solutions.

 

You have declared that you plan to offer producers and operators in the car wash sector an opportunity to take stock and move forward with renewed vigour. How do you interpret the performance of this market segment and what activities have you planned for it?   

Of the various non-oil activities within service stations, car wash services have always been the most lucrative. Over 60% of car wash facilities, under different ownerships, are located at filling stations. Recent years have seen an increase in the number of operators running multiple sites, each with a number of these facilities, whereas purchases of self-service car wash boxes have declined. Thousands of service station owners (6,000-7,000) view car wash services as the line of business that will allow them to recoup the earnings they have lost at the fuel pumps.

The widespread economic crisis has not spared the car wash supply chain, whose structure has changed radically. There has been a drastic reduction in the number of manufacturers and investments in new facilities (even by oil companies) have also declined sharply.

There are currently only 8 or 9 oil companies, differing in strength and in the services offered, operating on the Italian market, and four of them are foreign. Indeed, recent years have been characterised mainly by closures and mergers.

Today, the car wash sector generally can only dream of the figures recorded in the early 1990s. Indeed, there are now fewer major companies active in the chemicals and complementary equipment industries. Brush manufacturers are perhaps the only exception, but even so we are talking about just 2 or 3 companies.

We believe that this sector as a whole is rich and willing to innovate. At the fair we will be hosting car wash manufacturers and we trust that the entire industry will be represented, thus allowing car wash professionals to see the quality products being offered by the industry. We are expecting these professionals to attend the event where, in collaboration with Assolavaggisti, we will once again be staging (this year for third time) our “Oscar” award for car wash professionals and organising two conferences on issues relating to taxation and business management.

 

Can you tell us anything about the planned programme of conferences, seminars and workshops? Which organisations and associations are you working with, and what topics will you be addressing?

The programme of conferences is taking shape well. We have chosen the main topics and we are now in the process of contacting high-profile speakers and working out new formats.

As in the past, we will be dealing with the topic of illegal practices (which account for between 5 and 10% of the value of the market) as we remain committed to supporting virtuous entrepreneurs and the relevant initiatives organised by trade associations.

According to the Guardia di Finanza (Italian fiscal police), the problem remains acute. We are therefore doing all we can to bring about a cultural shift and raise awareness of the issue.

Obviously, we will also be looking at the analysis of the “Anagrafe” survey results.

Mobility, the non-oil business sector, electronic payments, electronic invoicing and LNG are other topics we will be dealing with. As in past years, there will be around thirty events over the three days.

 

How are the bookings going? Do you think you will have more exhibitors than the last time the fair was held? Which sectors appear to be growing most strongly?

With three months to go until the curtain goes up we have already surpassed the final figures recorded at the 2016 Verona fair. We are doing our utmost to be “sold out” by the end of July.

This year we are seeing exhibition spaces increasing in size by an average of 12% with the result that, by the end of June, we had already reached the surface area we covered in 2016, and 53% of the exhibitors who have signed up were also present in 2016. The biggest responses so far have come from the fuel delivery technology, signage, alternative fuel and fuel transport sectors. We still have three months of work and contacts ahead of us and so it is not over-optimistic to assume that we will see a two-digit increase on the 2016 figures.

We are also aiming to achieve a 10% increase in the number of visitors to the event. In particular, given the growth of their role and their common objective, namely to increase their average fuel sales and the profitability of their businesses, we are expecting to see more fuel retail network operators in attendance at the fair.