PetrolPlaza Russia Special: Interview with Director of TATSUNO RUS, Victor Gordov. Part 2: A market overview

For 19 years TATSUNO RUS has been operating in the Russian market. In the second part of the interview, Victor Gordov, Director of TATSUNO RUS, gives an overview of the Russian market's present and future trends, as well as an insight into the company's prospects.

How does TATSUNO RUS see the future of the Russian fuel market? Will it start recovering soon?

We see the future with positive eyes and we already have a wide range of innovative products required by the Russian market today. New solutions are just waiting for certain economic conditions to be implemented. The Russian fuel retail market has seriously evolved over the past 2-3 years. Oil companies have significantly increased their share of retail networks in a number of regions, but there are still small and middle sized businesses that with proper management can develop successfully.

Tatsuno observes these development processes based on the real structure of dispenser orders. After each drop in demand another wave of growth follows and TATSUNO RUS does not stand still in the expectation of a new upsurge of the fuel retail business. The company´s current agenda includes the development and production of a new type of the fuel dispenser using the most advanced technologies in the field of the refueling equipment. We are focused on working forward.

A lot of gas stations in Russia, especially in the rural areas, still have old infrastructure and fuelling equipment. As the Russian economy recovers do you expect more service stations to start modernizing its installations?

Yes, this is definitely going to happen. The need for petrol stations is not decreasing, even when there is a significant decline in sales of new cars, the vehicle fleet in Russia is constantly growing. Obviously there is a difference between the petrol stations in the cities and on the federal highways to the small province ones. We expect special federal programmes aimed at the development and support of the refueling business in rural areas. Perhaps it is a matter of the near future, and to keep the costs low for rural petrol stations in the context of such projects TATSUNO RUS offers specific approaches and ready-to-go solutions.

On the other hand, Russia also has a lack of gas stations compared to its size and population. Do you expect a large increase in the number of service stations in the coming years? Will events like the 2018 FIFA World Cup affect this in any way?

There is definitely a lack of petrol stations in Russia, especially in the central part of the country. But in this context we should not focus on the dimensions of the country, but in the number and quality of its roads. Russia is only starting to build a large and modern road infrastructure. There is no doubt that international events such as the Olympics in Sochi, and other regional ones, have a huge impact and a positive influence on the development of the roadside infrastructure. Modern forecourt stations in Russia are an indispensable attribute of this development. This means that the Russian retail fuel market has a great future ahead.

Russia has huge natural gas reserves and TATSUNO also develops natural gas dispensers. Do you expect the CNG and LPG transport market to grow in Russia? Have the low oil prices (and fuel prices) slowed the possible growth of alternative fuels?

The TATSUNO Corporation actively responded to the gas programme, adopted by the Russian Government, and offers efficient technologies and state-of-the-art equipment for increased use of natural gas in Russia. For this promising field the European division of TATSUNO developed a compressed natural gas dispenser. This new natural gas equipment is provided with the TATSUNO flow meter with improved performance and allows the measurement of gas release in kilograms and litres. TATSUNO is planning to start with the sale of the CNG dispensing equipment in Russia in 2016.

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Are there going to be any new products launched?

The TATSUNO corporation is the recognized world leading manufacturer of hydraulic refuelling equipment. I would like to repeat that since the beginning of the operation of TATSUNO RUS in Russia there hasn’t been a single case of complaint of TATSUNO mono-block units or flow meters. Currently, in Japan the mass production of a new hydraulic system TATSUNO MVP-X is about to start. This system combines the technical characteristics of a mono-block unit and a flow meter, which almost completely excludes any leakage or rubbing parts. This solution will increase the reliability and durability of the TATSUNO hydraulic systems.

Unlike in the European market, there hasn’t been a wide application of the vapour recovery system for petrol stations in Russia so far. Most of the proposed projects are very expensive and ineffective. Our company has always offered a wide range of equipment provided with a traditional vapour recovery system scheme of stage 2; yet, the maximum production volume of these fuel dispensers had hardly ever accounted for 10-15%, and it was only in 2012 when it reached 35% of the total production level. It is connected not only with the high price of these fuel dispensers, but also with the high cost of such projects in general, whereas the costs of the adaptation of the vapour recovery system for redeveloped filling stations are comparable to those of the construction of a new filling station.

The TATSUNO Corporation engineers have developed a vacuum pump that along with the vapour recovery ensures petrol vapour condensation and its return to the fuel line system of the fuel dispenser. The Eco Stage D70 module meets the most stringent environmental requirements and can be either built as a separate unit for the whole filling station or integrated directly into a fuel dispenser. No serious construction works for the assembly of the Eco Stage D70 module at a filling station are needed. The effectiveness of the petrol vapour condensation recovery into fuel dispensers accounts for 20 Litres per 20,000 litres of fuel circulated, which according to the specialists estimation ensures the full cost recovery of this system in 4-5 years’ time. This has been convincingly proven by the first years of the operation of this system in Japan. TATSUNO RUS demonstrated the fuel dispenser equipped with the ECO Stage D70 module at the International exhibition AUTOCOMPLEX 2013 and it aroused much interest among prospective customers. We are currently trying to bring this unique equipment to the European market.

The LOBE FLOW METER TATSUNO excites special interest among certain operators of high-speed equipment. This high-speed flow meter with a rather compact size provides for stable and perfect fuel metering precision at the high flow rate of petroleum, oil and lubricants. This patented TATSUNO solution with a unique durability allows for high-quality fuel recording within the range of 150 to 400 L/min. The existing range of standard sizes ensures widespread implementation of the LOBE FLOW METER. This range is applicable not only for high-speed dispensers for the owners of vehicles with big filling tanks such as mine trucks, diesel locomotives or river crafts, but also for liquid bulk terminals. This equipment is currently in effective operation at the TATSUNO RUS customers’ facilities in Western Siberia.

The adaptation process of the TATSUNO ULTRA Nozzle for the Russian market is finished. The nozzles will appear in the configuration with TATSUNO RUS dispensers as early as 2016. Apart from its high Japanese quality this equipment boasts a uniquely light weight, easy pressure force of the lever and its fixation and ensures a high speed of fuel release up to the full tank due to a special system with reduced froth formation, which provides for absolutely comfortable and easy filling process for customers.

The new TATSUNO OCEAN fuel dispenser includes a screen for advertorials and self-service technology. Will this be an important trend in the Russian market?

The TATSUNO RUS dispenser production line can be equipped with the self-service payment terminals by INIT-plus of various types. These terminals are widely used at petrol stations with high traffic flow and ensure their increased traffic capacity. The use of fuel dispensers with self-service technology provides for the operation of conventional public filling stations in the semi-automatic “night” mode.

The company INIT plus is our long-established partner and provides us with multi-media screens for advertorials, voice modules, modems, surveillance cameras and other interesting solutions for the use on petrol stations, which makes the TATSUNO RUS dispenser multifunctional. This is a big and important trend, which TATSUNO is following by further developing these smart dispensers. There is huge potential for such truly smart dispensers in Russia, which is reflected in the increased order volumes on this kind of equipment.

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What will ensure TATSUNOS’s success in Russia for the future?

According to the President of the TATSUNO Corporation, Mr. Hiromichi Tatsuno, it is the high level of co-operation that has enabled the Russian branch to become a reliable, dynamic company which is still developing and enjoys great trust in Russia.

A key factor in the success of TATSUNO RUS has been the interaction with other companies and ambitious projects. I am speaking about the long-term cooperation with our Czech and Japanese colleagues, which led to the creation of a unique, highly reliable range of dispensers for the Russian market.

This is illustrated by the successful, long-term partnerships with companies like Servio Technics, INIT-plus, SKON group and Stroyinvestservice, with whom we have collaborate on projects related to automatic control systems, specialized payment systems, and full integration of payment terminals with fuel dispensers.

“The main key to our success is the feedback we receive from our loyal customers”

The potential of the TATSUNO RUS fuel dispensers has been realized to the full in the metering control system which keeps total control over the movement of petroleum, oil, and lubricants, as well as goods and services at the filling station. The system is based on the TATSUNO RUS fuel dispensers and the SERVIO PUMP metering control systems.

The SERVIO PUMP control system is one of the leading Russian solutions for automation of both technological and business processes at modern filling station networks, providing great convenience and ease of customer service, ensuring the full automation of all services at modern service stations and establishing control, including remote, over the equipment and personnel actions, as well as allowing for the implementation of different payment systems.

Based on the SERVIO PUMP technologies in cooperation with the SKON group a successful national project of automated mini-filling stations was launched in 2005. The large-scale project has been successfully carried out all over Russia and involves more than 300 stations in 20 regions of the country. Automated filling stations are one of the collaborative developments of TATSUNO RUS which is in high demand at present and becomes increasingly popular year after year.

Another success factor of the company is the effective work of the TATSUNO RUS dealerships: high sales through outer structures, which account for 20 companies, save considerable time for arranging effective manufacturing process management and new developments.

However, the main key to our success is the feedback we receive from our loyal customers. The majority of the company’s developments have been created based on their recommendations and real operation of the TATSUNO RUS equipment in 64 regions of Russia.

The team of TATSUNO is convinced that their customers realize and highly appreciate their efforts in creating and delivering reliable equipment for modern filling stations and that the new products will touch the feelings of the customers willing to build new filling stations or to carry out technical upgrading and modernization of the filling stations in operation.