Tüpras General Manager Yavuz Erkut says that the fuels sector has still not returned to the situation before 2008 and that, as a result of their improvement strategies, they closed 2012 well. But he notes that the fluctuations in 2013 have again had a negative impact on the sector. He stresses that, in this environment, Tüpras will continue with major investments and strategy of perfecting their processes. “We shall create a company that has achieved operational perfection in every area in the sector,” he says and continues: “Our priority target is raising Tüpras’s regional and global competitiveness to the highest level.”
How was your performance in 2012? To what extent did Tüpraş achieve its targets?
- The improvement in the global economy was less than expectations but, from Tüpraş’s perspective, it was a year in which our overall operational targets were achieved to a significant degree and important phases of the İzmit Fuel Conversion Project, which is the main medium-term target, were successfully realized. The disruption in the balance of products produced by the impact of the continuing crisis in Europe on the demand for products in the Mediterranean region had a negative impact on profitability. In the oil products sector, increases in turnover and financial performance are not reflected on each other and can be misleading. Just as happened this year, although the high oil price may increase the turnover, it may not be reflected in a growth in profitability. Moreover, the monetary volume of the turnover is particularly important from the perspective of showing the financial dimensions of the sector. In addition, the impact of developments in the exchange rates and the prices of international oil products resulted in an increase in the volumes of sales in 2012 of 15.4 percent compared with 2011 to reach TL 47.03 billion. The decline in Tüpraş’s net refinery margin resulted in a fall in the pretax profit of 11 percent decline when compared with 2011. In 2007, our exports stood at $3.3 billion. In 2012, our exports were $5 billion. In terms of volume, our exports accounted for 23-24 percent of our total sales.
You set a target of returning to pre-crisis levels in 2012. Was this achieved?
- The figures have yet to return to pre-2008 levels either in the global economy or in the oil sector. In the refining sector, the most important indicators of profitability are the refinery margins and ratios, and the rates of both crude oil and product prices have yet to reach the values of 2008. There are a lot of fluctuations in the sector and it is clear that we are still far from achieving the expected recovery. We determined our production strategy accordingly, and applied a policy of optimization rather than maximization for both our capacity utilization and production strategy. In terms of sales, we have just about achieved the levels of 2008. In 2012, our domestic sales were only 1.3 percent lower than in 2008.
How has this been reflected in your sales?
- In 2012, our domestic sales rose by 836,000 tons to 19.6 million tons. Although the Turkish economy grew by 3 percent in 2012, the rapid growth in air transportation resulted in a rise of 20 percent in sales of jet fuel and, as a result of increase in land transportation, a rise of 10 percent in sales of diesel.