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Ecuador 2013 | ENERGY & MINING | B2B: DISTRIBUTION

The distribution sector has grown in support of Ecuador's domestic oil industry, while the country's retailers are strengthening their positions with new products.

Yuri Proaño Ortiz
YURI PROAÑO ORTIZ
General Manager
PRIMAX
Alexis Arellano
ALEXIS ARELLANO
General Manager
PDVSA Ecuador

How did your company come to be established in Ecuador?

YURI PROAÑO ORTIZ PRIMAX is a business initiative, born in Peru in 2005 after the buyout of Shell's retail network in the country. A year later, we did the same here in Ecuador. As a brand, we legally started operating in 2006 in Peru and 2007 in Ecuador. The first stage of operations focused on consolidating a new brand in the market, and in 2008 we took a step forward in our development by purchasing Repsol's network. PRIMAX in Ecuador is essentially the result of the purchase of two companies: Shell and Repsol. In the beginning, we started with around 60 stations, and only when we acquired Repsol did we really start to make a difference in our operations. We added some 120 stations to our portfolio. Today, we have a network of 186 retails stations.

ALEXIS ARELLANO PDVSA only develops investment and business projects with socially, economically, and politically allied countries. We always believed that we needed to support the development of the oil industry in the country. However, we always prioritize the social side of our activities rather than the economic. In terms of our evolution, we first started with contributing to balance lubricant prices in the market, and we moved into the petrol station segment later on. We have played a very important role in securing petrol distribution in the country during our time here, while Ecuador works on developing its own refinery.

What is your growth strategy?

YPO We aim at strengthening our overall position in the market with our unique products; for example, we are the only retailer selling fuel with additives, and that contributes to our differentiation in the market. Also, we want to strengthen our position in the retail segment because we are convinced that, with our offering and quality service, we stand out from our competitors in the market. In this segment, we will implement a very aggressive strategy to expand the size of our stores and increase our offering. The expected time to implement this strategy is around 18 months and, for the 10 stores we're planning, we have already set up a $4 million budget. Additionally, we have plans to expand our network of stations, either through the acquisition of other companies' branches, or by establishing new points.

AA We produce 25% of the manufactured lubricants in Ecuador. We believe that in the lubricants segment, there is a huge potential for development, because in these years we have introduced Ecuador's own brand of lubricants to the market, and both production and sales figures will grow. Also, we think that there is room to further consolidate the PDVSA brand in the industry thanks to our strong social commitment.

What is your outlook for the national economy in the medium term?

YPO We think the country will continue growing and, thanks to the dollarization of the economy, the government can keep inflation at a reasonable level. We are very positive about the further development of the national economy, as we have seen huge progress over the past few years, and the government intends to follow this trend, as evidenced by the boost in infrastructure projects. Ecuador has definitely evolved from both social and economic points of view, and the future is even brighter; there are plenty of opportunities for us to continue growing.

What is the potential of the oil industry to attract more FDI?

AA The industry holds huge potential to continue expanding over the next few years, and Ecuador will soon become an important oil exporter to the international market. The Amazonas region holds the most potential for the future, and we have to keep in mind that Ecuador currently aims to explore gas fields, an area in which there are very interesting opportunities. Overall, the energy and mining industry holds much important potential. I would strongly recommend any foreign investor to come and invest in Ecuador, an economy that continuously grows with stability. The Ecuadorean economy is expanding, and will continue to do so over the coming years, setting a very good example for the entire region.