BROADGATE

In 2009, the lubricating oil market, which constitutes Broad Gate S.A.’s market sector, was influenced by the negative changes in macroeconomic factors. The oil branch was severely impacted worldwide as a result of the global economic slump. It is estimated that in the 1st quarter of 2009, the world’s market shrank by between 20-40%, depending on the sector, product group, and region. In the three consecutive quarters, the global market remained relatively stable.

The Polish market of lubricating oils was also influenced by the slump, especially if we judge it against product tonnage. The market shrank to the level registered in 2006.1 

The oil market for the automotive branch experienced the slump less severely, and an upturn was registered as soon as at the turn of the 1st and 2nd quarter of 2009. The hindering factors mainly featured consumers’ reactions – a maintained demand for oils in spite of the economic slump, an increase in the number of imported second-hand cars. In the second half of 2009, a minimal increase in the market turnover was observed, yet its dimension was so insignificant, that it may be described as an increase within the limits of probable error.  

The market of trucks also registered a decline (for the second consecutive year), yet in 2009, the decline merely reached the value of a few percent.

According to the data of POPiHN, it was the range of mono-grade seasonal oils that experienced the decline most severely. This was mainly instigated by the increase in the market share for vehicles with more modern engines requiring the latest oil technologies, as well as by the change in the habits of consumers, who turned to multi-grade oils.
 
The analysis of changes in the section of lubricating oil in motorization is represented in the chart below:

Source: Report “Oil industry and trade in 200,” the Polish Organisation of Oil Industry and Trade;

Despite all the negative changes that influenced the lubricating oils market, no changes in the structure of the market or respective product shares occurred. The pie chart below represents the structure of the lubricating oils market in 2009:

Source: Report “Oil industry and trade in 200,” the Polish Organisation of Oil Industry and Trade;

The summary of tendencies influencing the lubricating oils sector in the past three years is represented by the following chart:

Source: Report “Oil industry and trade in 200,” the Polish Organisation of Oil Industry and Trade;

According to economic forecasts, 2010 is scheduled to experience a restoration of the market resulting from the distinct and systematic improvement of some sectors, yet not all of them, due to the strong fragmentation in terms of the number of products and areas of their application. The reconstruction of the industrial sector is expected to last longer than that of the automotive sector. The factors stimulating an increase in the motorization sector will mainly include the rising trend in the GDP and industrial production, convergence between the structure of the Polish market and the markets of the developed EU member states, the adaptation of Polish regulations to the EU environmental legislation, obliging producers of engines to apply systems of fume purification, the increase in the market share for vehicles equipped with the latest engine types, the improvement in social affluence, translating into the modernization of owned vehicles, and a high ratio of imported used cars, combined with a reduction in their average age.

The Polish market of engine oils has promising prospects owing to the ongoing technological progress, a continuous rise in the number of cars, connected with social mobility and a significant change in the approach to environmental issues. Apart from the aforementioned factors, the dynamics of changes is also shaped by the domestic macroeconomic situation, as well as the changes in legislation. Based on the GIPA report, the engine oil market at the end of 2009 reached the figure of 60 million liters.