Refiners respond to strategic driving forces
- ed.
Better days should lie ahead for the international refining industry. While political unrest, lingering uncertainty regarding environmental policies, slowing world economic growth, over capacity and poor image will continue to plague the industry, margins in most areas appear to have bottomed out. Current margins, and even modestly improved margins, do not cover the cost of capital on certain equipment nor provide the returns necessary to achieve reinvestment economics. Refiners must determine how to improve the financial performance of their assets given this reality. Low margins and returns are generally characteristic of mature industries. Many of the business strategies employed by emerging businesses are no longer viable for refiners. The cost-cutting programs of the `90s have mainly been realized, leaving little to be gained from further reduction. Consequently, refiners will have to concentrate on increasing efficiency and delivering higher value products to survive. Rather than focusing solely on their competition, companies will emphasize substantial improvements in their own operations to achieve financial targets. This trend is clearly shown by the growing reliance on benchmarking services.
- OSTI ID:
- 457899
- Journal Information:
- Fuel Technology amp Management, Vol. 6, Issue 3; Other Information: PBD: May-Jun 1996
- Country of Publication:
- United States
- Language:
- English
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