Vitality big Neste sees a ‘Ok-shaped’ restoration for its enterprise, CEO says
SINGAPORE — Finnish power firm Neste is seeing a so-called “Ok-shape restoration” from the coronavirus pandemic, with totally different segments of its enterprise moving into reverse trajectories, CEO Peter Vanacker mentioned on Tuesday.
“If I take a look at the restoration proper now, folks discuss with (it) as V-shape, W-shape, L-shape, I’ve heard yesterday on the summit, Ok-shape,” he instructed CNBC’s Capital Connection as an attendee of the Singapore Summit, which is being held just about this yr.
That is what Vanacker mentioned he is seeing in his enterprise proper now.
“The restoration in renewables, that was extraordinarily quick,” he mentioned. “However then however facet, every part that has to do with, for instance, oil and oil refineries, is definitely not recovering.”
Neste is the world’s main producer of renewable diesel. It was a basic oil-refining firm however later developed sustainable gasoline.
Vanacker mentioned there is a “large distinction” between these two sides of the enterprise at this level. There was a “fast restoration” for what’s sustainable and renewable, whereas oil-based merchandise are nonetheless “struggling” and never recovering.
He mentioned that would proceed into 2021 and 2022. The circumstances are “extraordinarily difficult” for oil refineries that aren’t promoting as a lot as they’ll produce, and will must restructure.
“There haven’t been quite a lot of refinery rationalizations this yr,” he mentioned. “We might count on there ought to be some subsequent yr and the yr afterwards, as a result of the scenario at present is simply not sustainable.”
Neste on Monday introduced plans to restructure two refineries in Finland to give attention to non-oil operations. The agency’s growth challenge at a refinery in Singapore has additionally skilled delays due to coronavirus-related lockdowns.