Via Baltica Route of the Future
Unlike the situation in the USA and the Far East, growth in consumption of automotive fuels has almost completely ceased in Western Europe - as incredible as that may seem to those of us who have to endure traffic congestion in our large cities and on our motorways. Traffic is being subjected to more and more restrictions and new cars are more fuel-economical. Thus European oil refiners have to look elsewhere for new markets - and they are finding them in the East.
"The market for high-octane, premium petrol is growing in Eastern Europe because older cars are being replaced with new ones. Not only the nouveaux riches, but also quite ordinary people are buying Western cars that do not run on the fuels sold by the old networks," says Fortum Oyj (former Neste Oy) corporate communications director Matti Saarinen. "The new markets that have come into being are close to Finland: the St. Petersburg region, Estonia, Latvia, Lithuania with the Kaliningrad province of Russia, together with Belarus and Poland. That gives the Baltic a certain logistical role. It is easier to transport fuels efficiently by sea; getting them to the St. Petersburg region with its seven million inhabitants is easier than hauling them all the way to some small town in northern Finland. Fortum is the only foreign oil company operating in St. Petersburg so far, but competition is certainly on the way. A couple of other companies are already established in the Baltic States and everyone is in Poland.
"We have seized the opportunity for growth. During the most hectic phase we were opening a service station a week. Now there are about a hundred stations, and there could be double that number in a couple of years' time. We began our operations on a very small scale, but that created a foundation for growth. The Fortum network is new and modern. We were in early enough to get sales outlets in central locations. That's very important for business."
Service station cafés like elite clubs!
"Because of our brand uniformity, Fortum service stations in Russia and the Baltic States look exactly like those in Finland. The only thing that's different is their environment. A service station shines like a diamond in the midst of greyness, although it must be admitted that those countries are gaining colour all the time. In that environment the first Western service stations had real allure - colour, bright lights, an abundance of goods. In many places the service station café was like a club for the local elite, a place where wealthy gentlemen and stylish ladies drank Coca-Cola," Saarinen recalls.
"The Via Baltica route, which Fortum has helped develop, is not yet particularly important from the perspective of through traffic. That is why we have concentrated our inputs on large centres of population and traffic between them. The road network is being improved, but is still of a fairly poor standard in places and not very attractive for tourists. Routes from Central Europe direct to Moscow also need improving. It would be important from Finland's point of view to get this traffic artery through the Baltic States working well. But what is needed above all is a decent motorway from the port cities of southern Finland to St. Petersburg. The environment would also benefit from that. Now heavy traffic crawls along narrow roads, which is not good for safety either. The border between Finland and Russia with all its formalities likewise needs to function more flexibly, and the authorities are working hard to bring about an improvement in that respect as well."