SINGAPORE — Finnish vitality firm Neste is seeing a so-called “Okay-shape restoration” from the coronavirus pandemic, with totally different segments of its enterprise getting into reverse trajectories, CEO Peter Vanacker stated on Tuesday.
“If I take a look at the restoration proper now, individuals discuss with (it) as V-shape, W-shape, L-shape, I’ve heard yesterday on the summit, Okay-shape,” he instructed CNBC’s Capital Connection as an attendee of the Singapore Summit, which is being held nearly this yr.
That is what Vanacker stated he is seeing in his enterprise proper now.
“The restoration in renewables, that was extraordinarily quick,” he stated. “However then alternatively 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 traditional oil-refining firm however later developed sustainable gas.
Vanacker stated there is a “massive 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 stated that would proceed into 2021 and 2022. The circumstances are “extraordinarily difficult” for oil refineries that aren’t promoting as a lot as they will produce, and should must restructure.
“There haven’t been lots of refinery rationalizations this yr,” he stated. “We’d count on there must be some subsequent yr and the yr afterwards, as a result of the state of affairs at present is simply not sustainable.”
Neste on Monday announced plans to restructure two refineries in Finland to give attention to non-oil operations. The agency’s enlargement undertaking at a refinery in Singapore has additionally skilled delays due to coronavirus-related lockdowns.