SINGAPORE — Finnish power firm Neste is seeing a so-called “Okay-shape restoration” from the coronavirus pandemic, with completely different segments of its enterprise entering into reverse trajectories, CEO Peter Vanacker mentioned on Tuesday.
“If I take a look at the restoration proper now, individuals seek advice from (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 just about this 12 months.
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 then again aspect, 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 gas.
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 might 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 a variety of refinery rationalizations this 12 months,” he mentioned. “We’d count on there needs to be some subsequent 12 months and the 12 months afterwards, as a result of the scenario at the moment 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 growth mission at a refinery in Singapore has additionally skilled delays due to coronavirus-related lockdowns.