Maintaining and developing the distribution network during the crisis.

[bitheerani319]

One of the largest producers and sellers of oils in Russia and Ukraine
Formed in 2005 on the basis of the joint venture TNK-Texaco + production assets of Ryazan Oil Refinery + Ryazan Petrochemical Plant (Ryazan) + YANOS (Yaroslavl)
640 employees in Russia, Ukraine and Belarus
Turnover over $300 million
Perimeter of PE Oils

Sales channels in 2004 – 2008

As a result of a targeted policy to namibia whatsapp data the distribution network, the share of sales through the distribution channel increased from 14% in 2004 to 77% in 2008.

Concept of distribution network development

A distributor is not a sales channel, but a business partner who is responsible for developing sales of oils under the TNK brand in a certain territory. A distributor is an important and integrated part of the TNK oil sales development model.

Basic principles

1. Transparency:
- single price list -
single and transparent credit policy
- clear selection criteria for distributors

2. Financial discipline: no accounts receivable

3. Loyalty:

- dedicated sales department

— investments in brand, logistics and sales (joint advertising, office, warehouse, delivery transport)

4. Business partnership:

- agreed business plans
- regular performance evaluation
- access to customer base, sales reports
- training, building structures, joint programs

- study and monitoring of the local market

5. 3 in 1 offer

6. Non-exclusivity (open list approach)

Requirements for distributors:

Oil sales are the main activity (>50%)
Dedicated sales and logistics department
Financially sound for business investment
Minimum stock in warehouses – monthly turnover
Focus on direct sales to end consumers
Accepts and follows all TNC policies (brand, sales, safety, business ethics, etc.)
Has a clear planning and reporting system
Follows minimum price and territorial policy guidelines
Program for solving problems with accounts receivable of distributors

Transferring meetings of the credit committee from quarterly to twice a week
division of distributors into 3 lists according to the degree of risk of non-repayment of loans
A. Financially sound (equity > borrowed funds)
B. Medium risk group
C. High risk group (bankruptcy)
tasks for ABC groups
A. Increasing credit limits to the maximum established by the credit analyst
B. Maintaining the size of loans under additional guarantees (guarantees of individuals, affiliated companies, etc.)
C. Repayment of loans and transfer to prepayment terms for product delivery
Proactive work: notifying distributors of upcoming trade credit payment deadlines
Transfer of part of the problematic client base of distributors to direct deliveries from the manufacturer (metallurgical, mechanical engineering enterprises)
training distributors in financial literacy
Reduction of minimum stock levels in distributor warehouses
As a result of all the actions taken, by the end of the first quarter of 2009, the overdue accounts receivable of distributors to TNK decreased to 0, and the amount of credit increased by 30%. Only 10% of clients left the TNK distribution network (all from category C)