Lotos sets out its stall

Last week fuel giant Lotos presented its growth strategy for the next six years. The company plans to invest zł.7.3 billion in growth, with zł.6.5 billion going on technological development. It will extend its plants and increase oil processing from the current level of about six million tonnes per year to 10.5 million tonnes.

A maximum of 60 percent of the company's oil is to come from any single source. Extraction in the Baltic region is set to grow, with some zł.500 million to be spent on this purpose. "We are going to increase extraction of petroleum from 300,000 tonnes to a million tonnes," said Paweł Olechnowicz, CEO of Lotos. Moreover, the company is also seeking to extract oil outside Poland, for instance in Kazakhstan.

Lotos is also planning to strengthen its market position and aims to have 500 petrol stations by 2012. "We want a 30-percent share in the fuel market. Currently we have 25 percent. In 2001 we had 13 percent, so we're on the up," stressed Olechnowicz. The company will invest zł.300 million in expanding its retail chain.

As the bulk of profits will be spent on growth, until 2010 no more than a 10-percent dividend is planned, but after 2011 this will rise to 30 percent. The development strategy will also be financed by funds raised in last year's IPO, as well as loans. In 2005, Lotos' profits rose to zł.968.8 million, compared to zł.544 million in 2004.