Founded in 2001, Tinmar has grown into the largest private energy supplier in Romania. It is dedicated to delivering integrated utility services – electricity, petroleum and natural gas – to industrial and household consumers. In 2009, it also became the first Romanian company registered on the European Energy Exchange (EEX), and is now active in global energy trading in Europe and beyond. Here, Augustin Oancea, Tinmar’s founder and CEO, explains the company’s business strategy and how it has maintained its leadership position and adjusted to recent changes in the Romanian energy market.
As the founder, what have been some of the most crucial business decisions you have made for Tinmar Energy along the road?
Throughout the history of the company there were several important decisions, a few of which I would like to mention. In 2017, Europe was hit by an energy crisis. As you can imagine, Romania was not protected during the crisis, and that year we faced a couple of constraints and problems in terms of external financing and the national regulator. Electricity was being traded at prices of up to three to four times higher than usual in peak hours. One of the most important decisions was made at that moment. It was to focus on internal business inside Romania and to put on hold and freeze businesses outside of Romania where we were also supplying and trading energy, namely Bulgaria, Serbia, Turkey and Hungary. We also made the decision to reduce the dimensions of the whole business, putting stability and revenues ahead of market share. Another crucial decision made during that period involved people who were very close to me. The relationships were not only professional, but also personal. But I brought in other people who proved that they could run the Tinmar business together with me.
You have two main types of clients: corporate clients and now, households. What will this balance look like going forward?
Here, I would say that together with our entrance into the retail energy market, we are trying to align our strategy to both households and corporate clients. And per this, we have aligned our strategy with the intention to satisfy all of our customers’ needs. We will continue with our main characteristics like flexibility, having a quick decision-making process, and adaptability towards the changing market conditions .We are also planning to launch a marketing campaign this autumn, when we enter the household consumer market. And another part of our strategy as we enter the retail market is to come with additional services, not only our classic services like energy, electricity and natural gas supply, but also integrated services. We like to call ourselves a modern utility integrator, and that has been our key vision since 2017, as well as how we’ve been adapting our offer to the household market. We offer many benefits for our clients, as we are an energy producer as well. That’s why it’s a must to have communication and campaigns with households so the clients can understand the benefits of having a competitive market. Romania’s electricity market was liberalized in 2017 for households, so it’s also important to inform them about the potential to switch suppliers. Over the last year, a new category has also been introduced by the government: optional last resort suppliers. Our company has registered to be an optional last resort supplier since March of this year when we entered the regulated market via this new category. This classification as optional last resort supplier gives us the possibility to function in the regulated energy market so that we can buy from the regulated market at special prices, and supply electricity to household consumers at regulated prices. The good thing is that this category of optional last resort supplier was introduced to create competition for the obliged last resort suppliers. This means that our offers on the regulated market will always be lower than obliged last resort suppliers. Therefore, us, as a company that supplies electricity and natural gas, so that regardless of the market in which we operate – households or industrial, regulated or decentralized – we can provide our clients with the best prices and services. Consumers just have to learn about the other options in matter of utility suppliers, which is why we have been focusing on our communications and letting people know that it’s easy to switch supplier. It’s like changing your mobile phone company. At the moment, we offer competitive services and prices and make a difference in clients’ lives.
You have six solar parks, which you built a few years ago, and you are also expanding your fuel storage. How do you see the energy mix now and in the future?
If we speak about our six PV plants, they total 50MWp-installed power. This was one part of our strategy to get vertically integrated. We want to continue this development and intend to double our existing producing capacity. It’s also part of people’s desires and wishes to protect the planet. It’s a global trend to go green, and it means a lot to us as well. It means a better future for everyone. It’s challenging within the energy sector to change mentalities, but it’s doable. Within the European norms, we need our production to be 24% renewable. That number will also increase. We cannot fall behind. Another part of our corporate strategy is related to supplying petroleum products. We want to activate and secure deposits throughout the country so that we can deliver clients our own merchandise from nearby storage facilities, considering that we are now importing petroleum products.
Tinmar was also the first Romanian company listed on the European Energy Exchange (EEX) and is also present on the Intercontinental Exchange (ICE) in the US. How do the different presences affect the company?
If we are speaking about the EEX, it is a platform that is of the utmost importance for us. Starting in 2017, we began offering products for the Romanian market on that platform but we had already used it before 2017 for other markets where we were working. We were very glad that platform was opened for the Romanian market products as it helps to protect us against price volatility, and is helping us to conduct wholesale and trade in all of the markets in which we are present in the European Union. The most important aspect is that it helps us with liquidity and product diversity, allowing us to immediately close on any product that we need. It’s the easiest and safest way for us to operate. Our presence on the ICE platform is mainly used for petroleum product prices, and is giving us a necessary tool to develop our import process at this moment.
What does your international presence look like going forward?
As I mentioned, since 2017, we have been focused on developing the internal business in Romania and have frozen the external businesses development. Starting from next year, our medium-term objective is to return to service the previous markets. As a long-term strategy, we would like to reach Western European and Nordic countries, where we could offer the same type of products and services as we do in Romania.
As we’re speaking to Germans, do you see any opportunities for collaborations or partnerships with Germany companies?
Although on EEX and ICE markets there is a centralized counterparty we have collaboration with German partners on the European OTC markets based on EFET contracts. We are very interested in continuing to work and develop further collaboration with international partners who can help us expand our portfolio and market share. At this moment it’s only trading activity, but in the long-term, certainly we could supply to the German market.
Do you think Romania suffers from misperceptions abroad?
This is a problem that affects all industries, not just electricity. But hopefully, perceptions will catch up. Companies need to work hard and be professional and the respect will gradually build. Indeed, there’s no way we can improve the situation other than by working and showing that we can be different. The actions have to speak for themselves.
What would be your overall message to the readership of Die Welt?
From my point of view, in order to be successful as an entrepreneur, you must first have a vision. Then, you have to be driven, ambitious and innovative. The golden rule that I have followed throughout my life is according to a Romanian saying: never follow the beaten path if you want to be successful.