Turkey's LPG leader
Energy means life…
Giving life to Turkey and adding value to life for more than fifty years, Aygaz is once again number one…
Aygaz, the first company of the Koç Conglomerate operating in the energy sector, was founded in 1961. The Company has sustained its leading position for half a century in its core business, LPG sector. Today, Aygaz ranks among the top five LPG
companies in Europe by virtue of its sustainable and strong growth policies. As the 10th largest industrial company in Turkey according to the 2011 list compiled by the Istanbul Chamber of Industry, Aygaz ranked 19th in the Turkey Fortune 500 by advancing two places. Aygaz is the one and only publicly traded company in the LPG sector.
The competitive advantage of Aygaz, which is the best known brand of cylinder gas in Turkey, derives from its deep-rooted experience and know-know as well as its innovation and reliable position in the sector. Aygaz, which continuously strengthens its brand name by closely following and acting on changing patterns of consumer demand through a proactive approach and enhancing its product range, strives to lead the change.
In its core business field, Aygaz,Distributes LPG as autogas, cylinder gas, and bulk gas,Manufactures and sells LPG cylinders, tanks, valves and regulators
Markets LPG-operated devices
The most reputable brand of the energy sector
Establishing an integrated energy holding structure, Aygaz has a leading position in the LPG sector, its core business, as well as in the natural gas market. Having always been far ahead of the competition since its establishment, the Company today has the most reputable brand* in the energy sector with significant contributions from its subsidiaries and affiliates. Aygaz carries out its activities with the vision of expanding its energy pool and accordingly, developing alternative projects to bring deep-rooted and long-lasting solutions for Turkey's energy needs.
Aygaz was announced as "The Most Reputable Company in the Energy Sector" based on the 2011 Survey of Turkey Reputation Index.
Strong growth potential in the global market
The increasing trend in LPG consumption continues on a global scale. According to data published by the World LP Gas Association (WLPGA) in 2012, the global LPG market, which grew by 30% with an increase of 50 million tons during the last decade, annually rose by 3% in 2011 and reached 260 million tons.
This 3% increase in the global LPG consumption is above the annual growth of global natural gas consumption as well as of total energy consumption. The fact that LPG has not yet been introduced to 1.5 billion people worldwide indicates huge growth potential in the global market. Meanwhile, in line with efforts to reduce harmful gas emissions, the target set by the European Union to double LPG's existing share amongst other types of energy by 2030 supports the expectations of rapid growth in the market.
LPG production increased by 4.6% in the last year and reached 269 million tons. Qatar, Russia, and Algeria are the three countries having the largest share in world LPG production. However, new shale gas resources recently discovered in the United States are expected to change the balance considerably.
The residential LPG market led by China, the United States and India has the biggest share (45%) in total consumption. Following petrochemical, autogas ranks third with its 9% share in total consumption, which is dominated by South Korea, Turkey, and Russia.
In 2012, big fluctuations in LPG prices were seen on a global scale due to the changes in demand for petrochemicals as well as capacity changes in some production facilities. Changes in supply-demand balance in Far Eastern countries also caused price fluctuations.
Turkey is the second largest LPG market in Europe
Turkey is Europe's second largest LPG market after Russia with an annual consumption of 3.7 million tons. Turkey is followed by England, Italy, and France. Although the expansion of natural gas consumption caused a reduction in the cylinder gas and bulk gas markets, the LPG market performs with an annual average growth of 1-2% due to the increasing share of autogas in general consumption. Thus, it maintains its position in the energy sector.
According to Energy Market Regulatory Authority (EMRA) data, in the last five years, autogas rose from 57% to 73% as a percentage of total consumption. With its nearly 10 million workplace/residential customers, cylinder gas accounts for 24% of total consumption.
In 2012, 21% of Turkey's total LPG supply came from domestic sources while the remaining 79% was provided by imports. The purchases from Kazakhstan, Algeria, and Norway comprise the largest share in Turkey's LPG import volume.
Aygaz is far ahead of the sector with 29% market share
Having Turkey's most preferred brands in cylinder gas and autogas, Aygaz is the only integrated LPG company in the national market. In its core business, Aygaz operates in all LPG processes including production, procurement, storage and filling as well as produces and sells LPG-operated devices.
According to EMRA data as of the end of 2012, with a market share of 29%, Aygaz maintains its leadership being far ahead of the sector that contains totally 72 companies. Aygaz capped another successful year with outstanding financial and operational results and attained 43% and 23% market shares, respectively, in cylinder gas and autogas.
Aygaz offers uninterrupted service all around Turkey. As of the end of 2012, Aygaz provides service via 2,303 cylinder gas dealers and 1,477 licensed autogas stations in 81 cities. Thanks to its countrywide distribution network, Aygaz cylinders enter into more than 100 thousand houses/workplaces every day. Meanwhile, more than 1 million vehicles are driven every day with its autogas, Aygaz Otogaz+.
In 2012, total sales of cylinder gas, autogas and bulk gas of Aygaz were 1,062 thousand tons. Total sales volume reached 1.7 million tons including domestic wholesale, exports and transit sales. As of the end of 2012, Aygaz's consolidated turnover was TL 5.6 billion, of which US$ 392 million is from exports and transit sales.
Aygaz-Mogaz merger process
In the beginning of 2012, merging with Mogaz A.Ş., which was providing distribution with Mogaz and Lipetgaz brands with an annual sales volume of 232 thousand tons and 6% market share, significantly contributed to Aygaz's efficiency increase.
In 2004, operation of Mogaz facilities was transferred to Aygaz to ensure increased efficiency through centralization of production facilities. This cooperation was further strengthened over the years with shared management of support units. Due to changes that occurred in the share structure since 2004, the share of Aygaz in the capital of Mogaz, its subsidiary, reached 100%. Thus, Aygaz and Mogaz began to be considered as consolidated with respect to Capital Markets legislation.
As per the decision taken by the Board of Directors on July 16, 2012, all assets and liabilities in the balance sheet of Mogaz Petrol Gazları A.Ş. as of June 30, 2012 were taken over by Aygaz. Thus, the merger process of the two companies was started. The synergy created by this merger, completed in January 2013, significantly increased efficiency in procurement and production processes. Aygaz immediately made the required structural changes in order to take advantage of this synergy in brand and dealer management as well as in sales and logistics.
The largest LPG operation of Turkey
Aygaz transports LPG taken from Tüpraş or obtained from foreign markets to filling plants via pipelines, as well as by marine and road tankers. Aygaz is the largest importing company in Europe, in terms of import volume made to a single country. Due to its strength in logistics infrastructure, Aygaz also makes sales to foreign countries.
Meeting 34% of domestic demand by itself, Aygaz conducts the largest LPG operation in Turkey. One of Aygaz's most important competitive advantages is its high level of logistical skill. In line with its logistic optimization efforts, Aygaz makes necessary changes in its distribution network and in the capacities/numbers of its vehicles according to its sales volume by taking advantage of economies of scale and achieves efficiency increase through optimal routing.
LPG products of Aygaz in 22 countries
Aygaz cylinders, valves, small bulk tanks, and regulators are produced with state-of-the-art technology and are tested to meet international security and quality standards. This manufacturing and testing are conducted at the Gebze facility, established on 52,000 m2 of outdoor space and 25,000 m2 of indoor space. Already having the ISO 9001:2008 Quality Control System certificate, the Gebze Facility also obtained the ISO 50001 Energy Management certificate; hence, it has combined higher security and quality standards with state-of-the-art technology.
The reduction in the domestic cylinder and bulk gas market due to the expansion of natural gas led Gebze Facility to alternative markets. In 2012, as a result of its intensive marketing efforts in the Middle East, Africa, Gulf and European countries, the facility exported its products to 22 countries with a total value of US$ 19 million.
Annual filling capacity of 1.1 million tons
In addition to its five sea terminals, 11 filling facilities and eight distribution centers, Aygaz has one cylinder manufacturing facility and one cylinder refurbishing facility, all of which meet international standards and operate using the latest technology. Aygaz has the largest LPG storage capacity in Turkey with 170,000 m3; its annual filling capacity is 1.1 million tons.
Stored in the Aygaz facilities, which have strong technological infrastructure and equipment, LPG is automatically pumped into cylinders and is distributed following the security controls. Aygaz products have CE (free circulation in the EU) and PI (branding) certificates in addition to ISO 9001 Quality, ISO 14001 Environment and OHSAS 18001 Work Health and Safety certificates.
Increasing its market share
Despite the reduction in the market, Aygaz increased its market share by three points to 43% in 2012 from 40.1% in 2011. According to EMRA data, domestic cylinder gas consumption dropped by 9% and totaled 890 thousand tons. In the meantime, cylinder gas sales of Aygaz were 382 thousand tons showing a decline of 3%.
The largest autogas market in Europe and the second largest in the world
The Turkish autogas market comprises 11.1% of the global market. Having the largest autogas market in Europe and the second largest in the world, Turkey increased its autogas consumption by 2% to 2,695 thousand tons.
In Turkey, autogas is preferred by 3.5 million vehicle users, 41% of all automotive vehicles in Turkey. In other words, the Turkish market contains 16% a total of 21 million vehicles worldwide running on autogas. According to this data, Turkey has the largest number of LPG-powered vehicles in the world.
The growth in autogas is expected to continue owing especially to the price advantage offered to consumers. As the awareness rises on the fact that autogas is an eco-friendly product, consumers' perceptions of performance and safety change positively as well. These developments indicate that the upper socioeconomic group will prefer autogas in the forthcoming period and the market will maintain its growing trend.
Leader and pioneer with 23% market share
With a market share of 23%, Aygaz has a leading position in the autogas market, which has displayed a strong growth performance during the last 10 years and is today subject to intense competition. Last year, total autogas sales of Aygaz reached 621 thousand tons with an increase of 3% and the share of autogas in domestic LPG sales rose to 58%.
While there are 12,500 fuel stations for about 15 million motor vehicles being supplied from the white products market, there are 9,353 autogas stations for the 3 million LPG vehicles on the market.
In 2012, Aygaz focused on meeting consumer demand by initiating proactive marketing policies and investments to expand its distribution network in a fiercely competitive autogas market, in which 10,000 autogas stations supply 3.5 million LPG vehicles. Expanding its distribution network by 9.7%, above the sector average, Aygaz provides services with 1,477 licensed autogas stations.
In 2012, domestic bulk gas consumption decreased by 2%. Aygaz sustains its longstanding leadership in this shrinking bulk gas segment thanks to its superior service and product quality. The share of bulk gas in total domestic LPG sales of Aygaz is 6%. Throughout 2012, the Company served more than 5,000 bulk-gas customers and realized a sales total of over 60 thousand tons in this market as of the year-end.
In 2011, Aygaz began distributing carboy water with the objective of optimizing its distribution network and further increasing dealer satisfaction.
The Carboy water market grew by 1.5% in 2012 while Aygaz recorded 176% growth with its Pürsu activities in 30 cities in four regions. Thanks to this outstanding performance, Pürsu succeeded in taking its place among the 10 largest companies of the carboy water market, an industry that includes a total of 300 companies.
Aygaz has a goal to increase its filling capacity and expand its dealer network in the forthcoming period with a special emphasis on large cities and regions where Pürsu has not yet established a presence.
- Aygaz is proclaimed to be The Most Admired Company in the LPG sector according to the results of the Survey of the Most Admired Companies in Turkey conducted by Capital magazine.
- Aygaz receives the award for being The Company Committed to Consumer Satisfaction at the 15th Annual Consumer Awards from the Turkish Ministry of Customs and Trade for the second consecutive year.
- The corporate governance rating score of Aygaz is raised from 8.50 to 8.96, the third-highest corporate governance rating score in Turkey. Aygaz also takes its place among the first group having the best scores in the World Corporate Governance Index, which comprises 150 countries.
- Aygaz ranks as the 10th largest industrial company in Turkey according to the list compiled by the Istanbul Chamber of Industry.
- Aygaz comes first in customer satisfaction among the LPG distribution companies according to the Turkey Customer Satisfaction Survey 2012 results.
- With its high score in employee loyalty, Akpa ranks second in terms of company management and human resources policies according to the results of the nationwide Best Workplaces Survey of AON Hewitt Consultancy Company.
- For its efforts in the For My Country: Barriers Free Life project, Aygaz shared first prize with Tofaş resulting from the evaluation made by Koç Holding among Koç conglomerate companies.
2013 and beyond
To be the leading company providing energy solutions to Turkey and other potential markets, particularly in LPG and natural gas
To offer the best products and services in every field it operates, particularly in LPG , by prioritizing high quality and safety standards with working principles adopted from corporate values of the Koç Conglomerate and by being always responsive to society and the environment
Sustain its market leadership in LPG through
• Product differentiation and innovation for autogas
- • Further penetration by opening new autogas stations
- • Growth prospects for cylinder gas in rural Turkey
- • Market diversification in neighboring countries
Utilize and enhance its asset portfolio through