ENERGY TRADE GROUP LLC

How does the energy market in Ukraine work and how do gas and electricity suppliers attract new customers today? We talked about the activities of one of these suppliers and the company's experience in procurement with Dmytro Zlyvko – Head of the Public Procurement Department of ENERGY TRADE GROUP LLC.

What is the ENERGY TRADE GROUP LLC today?

The company began its activity in 2009 as a trader for industrial equipment and energy resources. In 2015 the gas market was reorganized, and taking this into account, the development concept of ENERGY TRADE GROUP LLC changed. We abandoned trading as such and became a client-oriented company with the main task of supplying gas to end consumers. And immediately they began to build up a portfolio of clients: industry, small and medium-sized businesses, government, and municipal institutions. The сitizens were added later.

Today ENERGY TRADE GROUP LLC is an independent provider of gas and electricity. It has more than 100 employees and offices in 18 regions of Ukraine. Gas is sold in the B2B, B2G, and B2C segments, while electricity is sold in the B2B and B2G segments (so far the electricity market is closed for the сitizens).

ENERGY TRADE GROUP LLC is among the TOP-50 electricity suppliers and the TOP-3 gas suppliers in the B2B segment. Since 2016, the company has sold about 3.5 billion cubic meters of gas, and since July 2019, when the electricity market ceased to be a monopoly, about 1.5 billion kW of electricity.

ENERGY TRADE GROUP LLC

What is the peculiarity of working on the gas and electricity free market in Ukraine?

The Ukrainian gas market has been open for over 5 years. At the end of last year, it became open to the public as well – now anyone can buy gas from a chosen supplier, having gone through a simple procedure for agreeing.

Since the gas market itself is competitive and mostly depends on imported gas, gas prices in Ukraine are formed taking into account import parity, plus: the market price of gas on the EU exchanges + delivery and margin. This is the gas formula, which is now partially used in public tenders.

For the Ukrainian gas market to become transparent, it is important to create a financial instrument for gas trading. Now the urgent need for a national gas hub is being discussed, for which our Ukrainian suppliers would have a price benchmark. When it appears, both suppliers and buyers, and the сitizens will understand how gas prices are formed in Ukraine and will be able to calculate their income and spending. Without this, it is difficult to plan prices for long periods.

How do you look for new clients?

We have different distribution channels thanks to our large team. People are involved in different segments: some deal with issues related to industrial business – large objects of the commercial sector. Others deal with issues of cooperation with state-owned companies, from small to large. We work with small and medium-sized businesses, as well as with individuals. A wide network of representative offices helps us to professionally cover the field of public procurement and to solve all the current needs of our clients. It doesn't matter whether it is a big or small client – we always pay attention to him. This is efficiency, and this strategy is the future.

To attract new customers, we talk about the company in the media and conduct active marketing: we run social networks, a YouTube channel, and launch advertising. We have personal managers for regions, a call center, who communicate with clients daily, increasing their loyalty. Now the company has an innovation – it has launched a network of agents – people who, on mutually beneficial terms, can offer products of the ENERGY TRADE GROUP LLC brand, communicating with natural gas consumers directly. And naturally, we take part in tenders, both state and commercial.

What digital tools do you offer your clients?

We can compete in our market only by providing a high-quality digital product that will be convenient and understandable for users. Therefore, since 2017, the company has implemented a unique billing system ETG-billing. It calculates the payment of energy resources and helps customers to operate their bills without the intervention of a manager, which eliminates human error.

In 2018, we were one of the first in our sales segment to offer our clients personal accounts on the company's website. And in 2019, we developed a mobile application that can be used to purchase energy resources. In the future, we are going to improve all these tools and add electricity there as soon as this market becomes open to the сitizens.

ENERGY TRADE GROUP LLC

What are the peculiarities of the work of a gas and electricity supplier?

Gas and electricity is a strategically important commodity on the market, with its supply specifics. Accordingly, our responsibility as a supplier increases significantly. This is not just trade – it is very important how well we deliver the goods.

The gas season runs from mid-autumn to mid-spring – at this time we have an active period: we make plans for ourselves, work on increasing the quality and number of contracts. In the spring, we begin to prepare for the next season: we hone our work and analyze what was incomplete, and where, on the contrary, it worked well in terms of people, technology, tactics. We also consider the most interesting cases that we or our competitors have.

Along the way, we continue to participate in the auction, because many buyers buy electricity constantly throughout the year. Of course, the volume of supplies in the summer is less, but the process itself does not stop.

What economic effect does the company get from working in the Prozoro system?

ENERGY TRADE GROUP LLC began to participate in tenders from the very launch of the Prozorro system. And until now, this sales channel remains one of the key and financially filled markets for the sale of energy resources. Initially, we did not have a specific team to deal with tenders. Over time, everything was systematized, and now some people work with tenders in the central office, and some are distributed across regions. Because now there is a lot of gas and electricity purchases, we are trying to evenly distribute the workload among all managers. Therefore, we build our geographic grid and attract people to work on tenders in the regions.

ENERGY TRADE GROUP LLC

The needs of the gas and electricity markets in Prozorro are constantly growing, both in the number of tenders and in the volume of purchased goods. If we talk about the personal effect for each buyer, then in the long term people who are engaged in procurement grow into managers and specialists of a wider format. They study the specifics of a particular product and subsequently can present themselves as a specialist not only in tender purchases but also in the sale of energy resources. Indeed, in essence, tender purchases are purchases of different goods for similar requirements. If you understand the qualification part, it remains to learn the technical part to fully master this direction. Some buyers, for example, go to consulting structures.

What analytical tools do you use when working with tenders?

I want to start with this phrase: "As a theater begins with a hanger, so a tender begins with analytics". To have a good knowledge of the procurement situation, find a suitable tender and form a price, it is important to be able to analyze in detail the market where the subject of the auction is placed. Therefore, we use everything from Excel spreadsheets to various modules, and we try to extract analytical results from this: make financial statements, learn the effects of the work of the unit, and each manager separately.

Various analytics modules are now available, such as BI Prozorro or Clarity Project. In addition to them, we also use the Dozorro monitoring portal and the tools of the Kyiv School of Economics. We monitor and form our reporting in the SmartTender.biz analytical module. Here you can not only see useful data on the results of work but also place everything on diagrams to prepare a report for management for a certain period.

Besides the analytics module, SmartTender.biz also provides high-quality support not only to me personally as a bidder, but also to our company managers who work in the regions. We have a large flow of bids, and the speed the SmartTender team can close a financial, legal, or technical issue is of paramount importance. This efficiency is very important in our time, and thanks to it I want to continue cooperation and even recommend a site for work to other companies.