KN to refocus long-term strategy through input from international experts

The operator of oil and liquefied natural gas (LNG) terminals KN (AB Klaipėdos Nafta) has selected international experts for consulting on the development of the company’s new long-term operational strategy. The tender for the consultants, launched by KN, has been awarded to the global consultancy firm Simon-Kucher & Partners.
 
The current business strategy of KN was drawn up in 2019 for the period until 2030, but no longer reflects the changed business and geopolitical environment in which the company operates. The last few years number of events that have had a major impact on KN activities and, consequently, on the strategy: the COVID pandemic, the events in Belarus, and finally the outbreak of the war in Ukraine in 2022, and the acceleration of the pace of the green transformation because of it.
 
According to Darius Šilenskis, CEO of KN, the company is going through a transformation, during which expectations regarding the further diversification, efficiency, continuity of managed infrastructure operations and the importance of the entire region's energy security, as well as the need for sustainability and decarbonization, are becoming increasingly relevant.
 
“We are facing the major challenge of transforming our operations so that they meet the needs of the future and are completely climate neutral. We understand that in the coming decades the world will have to move away from the popular use of fossil fuels for energy and transport to other forms of energy. We have always been and want to remain an important part of the future energy supply and value chains, while continuing the successful creation of value in the energy sector, both in terms of energy security and financial return for shareholders and Lithuania at large. In this context, we need to look well ahead, review our current business model in order to ensure competitive advantage and greater profitability of our activities in the future. This is what the newly developed strategy will help us to do,” notes KN CEO.
 
Three potential suppliers participated in the open tender launched by KN, and the consulting company Simon-Kucher was selected as the one that best met the criteria set out in the procurement conditions, the most important of which were the expertise of their consultants and the price of the services.
 
Simon-Kucher & Partners is a global consultancy firm with over 2,000 employees in 30+ countries focused on unlocking better growth that drives measurable revenue and profits. With over 37 years of experience in commercial excellence topics of all kinds – Simon-Kucher is regarded as a world leading growth and monetization specialist. 
 
“When selecting consultants, we were interested not only in their technological knowledge and business management competences, but also in their understanding of the relevant regional context of KN, their insight into strategies of the international organizations, and their expert knowledge of the business segments that are relevant to us. If we want to be successful in our transformation journey, discover new growth opportunities with the highest financial return and achieve a significant step forward in our business, we need added value, which is what we will get from highly qualified consultants with much broader expertise, market knowledge and wider vision of business niches we have not yet mastered or even do not know about” says D. Šilenskis.
 
According to Dr. Andreas Jonason, Partner and Lead for Oil & Gas at Simon-Kucher: “The collaboration fits hand in glove with our mission of better growth. Profit and growth should not be achieved at any costs. We see that KN is leading this change journey for the industry with a clear-cut long-term balance of supply security and environmental consideration.”
 
During this period, strategic consultants will assist in further assessing the strategic directions already developed by the company’s managers, organize strategy sessions, analyze internal and external environmental factors, and based on best management practices and the latest standards, will help to draft a strategy that will best meet the business expectations.
 
The company’s newly developed long-term strategy will cover the period of 2023–2050 but will be divided into three distinct phases: short-term (2023-2030), or the current evolution; medium-term (2030–2040) focusing on the role of KN in the transitional energy market; and long-term (2040–2050), which will cover the planning of the company's activities for its journey towards full climate neutrality.
 
The long-term strategy will have to cover the four main activities of KN – the current oil terminal services, the LNG terminal business in Klaipėda port and in the region, the global LNG business development through operation and maintenance services and investments in LNG terminal projects and the new business lines such as hydrogen and alternative energy carriers, carbon-dioxide capture, and storage, etc.
 
The long-term planning for these four main business segments of KN will need to encompass the components for sustainability and green transformation, HR, R&D, innovation, and digitalization, as well as marketing.
 
The articulation of the new KN strategy is expected in the first half of 2023.