2021
Integrated
Report

Competitive environment

The ORLEN Group is consistently building its position as a regional leader in energy transformation by implementing clean, environmentally friendly technologies and energy based on low- and zero-emission generation sources. The implemented activities are subordinated to the implementation of the strategy of achieving carbon neutrality by 2050.

Capitals:

Energy

In the Energy segment, the largest competitors of the ORLEN Group are:

 

PGE Polska Grupa Energetyczna Group

Which is Poland’s largest vertically integrated producer of electricity and heat.

With its own sources of raw materials, electricity generation facilities and distribution network, the PGE Group guarantees safe and reliable deliveries of approximately 41 TWh of electricity annually to over 5.4 million households, businesses and institutions. The PGE Group is also the largest Polish producer of heat.

TAURON Polska Energia Group

Consisting of TAURON Polska Energia S.A. of Katowice and its subsidiaries.

Supplying around 52 TWh of electricity annually to over 5.6 million end customers, the TAURON Group it the largest electricity distributor in Poland, the second largest electricity seller in Poland, and the largest heat supplier in Upper Silesia. The Group controls roughly 30% of Poland’s thermal coal reserves.

Enea Group

The second largest power producer in the Polish electricity market.

It manages the full value chain in the electricity market: from fuel, through to power generation, distribution, sales and customer service. The Group is responsible for reliable supplies of energy to 2.6 million customers. Enea Operator owns a distribution network in north-western Poland (spanning approximately one-fifth of Poland’s area). The Group employs over 17,000 people across Poland, who form a modern energy company. The Enea Group operates two important commercial power plants, in Kozienice and Połaniec. It also includes the Lubelski Węgiel Bogdanka mine, which is the main supplier of coal for the Group’s power plants. Another area of Enea Group’s operations is generation of heat at its plants in Białystok, Oborniki and Piła.

The ORLEN Group is a significant producer of electricity and heat, used in large part to satisfy the Group’s own production needs, as well as one of main distributors of electricity in Poland. It is also one of the largest consumers of gas in Poland and an active participant in the process of gas market liberalisation. The ORLEN Group currently owns energy assets in three countries. In Poland, they are located, inter alia, in Płock, Włocławek, Ostrołęka, Elbląg, Kalisz, Jedlicze and Trzebinia; in the Czech Republic – in Litvinov, Libiš, Kolin and Pardubice; and in Lithuania – in Mažeikiai. In terms of the share of electricity from renewable sources in total energy output, the ORLEN Group owes its strong market position mainly to hydropower plants and wind farms owned by the Energa Group and ORLEN Wind 3. Green energy is also generated in biomass combustion installations (at Energa Elektrownie Ostrołęka and Energa Kogeneracja) and three solar photovoltaic farms.

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Information on production assets, the capacity market, wholesale and retail trade in electricity, alternative fuels, strategic projects and areas of activity as well as logistic assets in the Energy segment is available in the `Energy Segment` section.

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Refining

Main competitors of the ORLEN Group in the Refining segment are:

  • Grupa LOTOS of Gdańsk – Poland’s second largest refinery;
  • Mitteldeutschland Refinery in Leuna/Spergau, located in south-eastern Germany, about 150 km from the Polish-German border, the country’s most advanced refinery;
  • PCK Refinery in Schwedt, located north-east of Berlin, about 20 km from the Polish-German border;
  • Slovnaft refinery, an integrated refining and petrochemical group, with a leading position in the Slovak Republic, located near Bratislava;
  • The Danube Refinery – one of the largest refineries in the CEE region, owned by MOL, located in Százhalombatta, Hungary;
  • Mozyr refinery, a leading refinery in Belarus, located close to the Ukrainian border.

ORLEN Group refining assets and key competitors in Central Eastern Europe / processing capacity [million tonnes]

orl_assets-capacity (1) orl_assets-capacity (1)

Source: In-house analysis.

Information on production assets, their operating parameters, the ORLEN Group’s market share in refining wholesale, sales volume and sales markets are available in the `Refining Segment` section.

IMG_7136 IMG_7136

Petrochemicals

The largest competitors of the ORLEN Group in the petrochemical market are:

  • Ineos Olefins & Polymers Europe – with an annual polyethylene (HPDE, LDPE, LLDPE) production capacity of approximately 2,130,000 tonnes and assets in Belgium, France, Germany, Italy, Norway, and United Kingdom;
  • Sabic – with an annual polyethylene (HPDE, LDPE, LLDPE) production capacity of approximately 1,755,000 tonnes and assets in Germany, the Netherlands, and United Kingdom;
  • Lyondell Basell Industries − the largest polyethylene (HDPE, LDPE) manufacturer, with an annual production capacity of approximately 2,165,000 tonnes (including its 50% share in Basell ORLEN Polyolefins Sp. z o.o. (BOP)) and assets in Germany, France, and Poland;
  • Borealis – with an annual polypropylene production capacity of approximately 2,000,000 tonnes and assets in Belgium, Germany, Austria, and Finland;
  • Total Petrochemicals – with an annual polypropylene production capacity of approximately 1,110,000 tonnes and assets in Belgium and France;
  • Indorama – Europe’s largest PTA manufacturer, with a nominal production capacity of 1,750,000 tonnes per year and assets in Portugal, Spain and the Netherlands;
  • Inovyn – a company formed following the combination of Ineos Chlor and Solvay; its annual production capacity is 2,255,000 tonnes.

Information on production assets as well as the competitive environment in the petrochemical wholesale area can be found in the section `Petrochemical Segment`.

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Retail

The ORLEN Group is the undisputed leader in retail fuel sales in Central Europe. At the end of 2021, it operated a total of 2,881 service stations. At the end of 2021, the ORLEN Group had 1,028 active retail outlets of RUCH. The drop in the number of points was due to the optimization and profitability of the retail operations of Ruch and the epidemiological situation. In June, the first retail outlet in the new format was opened in Warsaw under the brand name „ORLEN w Ruchu”. The next points were launched, among others in Bydgoszcz, Leszno and Tychy.

In Poland, our service stations operate under the ORLEN brand in the premium segment and under the Bliska brand in the economy segment (with the share of the economy segment gradually declining year on year). In the Czech Republic and Slovakia, they are branded as Benzina ORLEN and Benzina Plus ORLEN, and in Lithuania − as ORLEN. On the German market, ORLEN Deutschland operates economy stations under the umbrella brand STAR ORLEN and the network is complemented by more than a dozen Familia supermarket stations.

In September 2021, the new service ORLEN Paczka (ORLEN Parcel) was launched in place of Paczka w Ruchu (Parcel in Motion). With this new courier service e-commerce customers were offered a larger number of pickup points: parcel lockers (over 300 already operating, the target is over 2,000), ORLEN service stations (over 1, 000), and, as before, Ruch kiosks and partner outlets. Orders are delivered to the pickup points within 1–2 business days. In the coming years, the ORLEN Group plans to further expand the geographical coverage of the ‘ORLEN Parcel’ service.

Polish market

According to the Polish Organisation of Oil Industry and Trade (POPiHN), there were more than 7,824 service stations in Poland at the end of September 2021, an increase of 100 or so compared with the end of September 2020. The number of supermarket stations dropped slightly, while large service station chains continued to invest in new facilities, with an increase in the number of locations reported year on year.

As at the end of 2021, the ORLEN Group had a network of 1,819 service stations on the Polish market (approximately 24% of all stations in the country) and Grupa Lotos had 516 service stations (7% of the total), while the stations operated by international chains (BP, Shell, Circle-K, Amic, and Total) represented approximately 20% of the total. Independent operator stations (including smaller chains operating under a single brand) accounted for about 50% of all service stations in Poland. Among the chains of independently-operated stations, MOYA continued to grow at a vigorous pace. The number of supermarket service stations fell slightly year on year, to 176, representing around 2% of all service stations in Poland.

Service station networks in Poland

Source: In-house study based on POPiHN data as at September 30th 2021.

PKN ORLEN had a 31.1% market share in Poland in 2021.

The ORLEN Group maintained its leading position on the market, both in terms of the volume of sales and the size of the service station chain. In 2021, the Benzina chain comprised 424 sites, and maintained its market share at 24.8%.

In terms of the number of service stations, Hungary’s MOL is the second largest chain in the Czech Republic (with 304 locations). Tank Ono, a privately-owned discount chain, is an important player in terms of the market share, with 44 stations and an approximately 15% share in the market. Other major players on the Czech market are the premium stations run by the two multinationals Shell and OMV, with a combined market share of just under 23%.

In the Slovak market, the total number of service stations fell to 907 in 2021, with most of the decline attributable to independently-operated stations and small local chains. The segment accounts for over 40% of the Slovak market.

The largest competitors of the Benzina network (22 stations, including six under the ORLEN brand) in Slovakia are Slovnaft (254 stations), OMV (98 stations), Shell (87 stations), Jurki (59 stations) and Benzinol (25 stations).

The number of service stations on the German market was about 14.4 thousand, with ORLEN Deutschland’s main competitors including international networks such as: Aral (BP Group), Shell, ESSO, Total (combined, they account for 58% of total sales volumes and 45% of all service stations) and the economy chains Jet (ConocoPhilipps) and HEM (Tamoil), representing approximately 15% of total sales volumes and almost 9% of all service stations.

In 2021, the number of service stations within each chain changed only slightly year on year, with a small drop seen in the total number of service stations operated in that country.

At the end of 2021, ORLEN Deutschland’s service station chain comprised 587 sites and, despite stiff competition, managed to preserve its market share of 6.1%.

Some 75% of the Lithuanian market is occupied by the six largest players. Viada, with 127 locations and a 20% market share, is the leader in terms of the size of the service station chain in Lithuania. The second largest retail chain is Circle K, the operator of 93 service stations (including 11 automated self-service locations) with a 15% market share. Baltic Petroleum, Lithuania’s third largest chain, controls 81 service stations and almost 13% of the market. Neste, operating 80 service stations, is another major player present on that market (an almost 12% market share). At the end of 2021, the ORLEN Group’s retail chain in Lithuania, operated by the subsidiary ORLEN Baltics Retail, comprised 29 sites and had a market share of 4.2%.

More information is available in the `Retail Segment` section.

See also

Energy

More

Refining

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