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PKN ORLEN to consolidate operations in China

Poland’s oil refiner and petrol retailer PKN ORLEN is about to officially launch its operations in China in the second half of the year.

Initially, the company will focus on selling engine oils, previously distributed in China through third parties. Over the coming three years, sales through an ORLEN Group company will contribute to achieving a several-fold increase in operating profit compared with the present level.

“We are consistently increasing export sales of our products,” commented Daniel Obajtek, President of the PKN ORLEN Management Board. “More than 60 per cent of PKN ORLEN revenue is generated in foreign markets. The establishment of ORLEN China is a strategic decision geared towards strengthening the Group’s position both on the promising Chinese market and in neighbouring countries. By building our own sales competencies in China we will be able not only to boost sales but also to optimise costs and lead times.”

Mr Obajtek reminded how, at present, PKN ORLEN exports its products to 20 countries in Asia alone and ORLEN China may become a platform for selling other products on the Chinese market, including petrochemicals.

ORLEN China will become the centre of sales (including e-commerce), marketing, logistics and freight competencies in China. The company will initially operate in the Jiangsu Province and the neighbouring provinces, hubs that attract direct foreign investments, international trade and technological innovations.

Economic performance indicators, despite the COVID-19 pandemic, show that the potential of China’s economy is immense. The number of cars per 100 inhabitants is almost three times lower in China than in the EU, and the figure is showing a clear growth trend. In 2007–2017, the increase in consumption of lubricants in China, of 55 per cent, was the highest in the world. China was also the market where sales of ORLEN Oil products grew at the highest rates among all Asian markets to which the Group exports its products.

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