CTC AUTOMOTIVE LTD aims to develop a business plan to the Marine, Oil & Gas sector in Cyprus: A new market development project, indicating to the contribution of CTC' s business plan for CATERPILLAR brand

Abstract

During the last five years, Cyprus Economy experiences one of its biggest drawbacks ever. The sector that has been impacted mostly, due to this negative situation is definitely the construction industry. A decrease of more than 60% of the construction activity compared to the figures of 2010, illustrates clearly the size of the problem. Therefore, this has a direct relation and it has negatively affected CTC’s - Caterpillar core business; which was until now the Earth Moving Equipment. On the other hand, the starting of operation of the VTTV terminal last November, in Vassilikos; flags the creation of a new market for Cyprus – the Marine, Oil & Gas sector. The strategic location of the terminal creates the opportunity for fast and vast development of that specific sector. In particular, the strategic location of the terminal makes it the first of its kind in the Eastern Mediterranean, connecting Europe and the Black Sea with markets in the Middle East and Asia. The asset currently comprises 28 tanks and capacity of 544,000 m³, and offers access to a deep water marine jetty as well as to road tanker loading facilities. Furthermore, some additional reasons listed below lead to CTC’s decision to justify whether it will be profitable to invest in the Marine, Oil & Gas sector through its CATERPILLAR product range:

1. The proven and estimated natural gas reserves in the Eastern Mediterranean region. A region for which Cyprus could become the mid-point between Europe and Middle East. 2. The findings of natural gas in Cyprus Exclusivity Economic Zone, is an additional reason that leads CTC to make a step forward to this new market development. 3. The start of the operations of Vassilikos Terminal, as it has been already mentioned.

Therefore, it is clearly shown that the orientation of CATERPILLAR’s core business in Cyprus should change and move forward to sectors like Energy and Marine. By describing CATERPILLAR customers’ profile that CTC should focus on during the next few years, the following market segments have been identified:

 Earth Moving and Heavy Machineries Segment: CTC targets to the big and well known Construction & Development Companies, to Quarries & Mining Companies, as well as Small Private Companies that owned from one up to five machines.  Marine Pleasure Segment: CTC targets the yachts’ owners that have their yachts in one of the Marinas on the island, as well as to some yachting builders.  Marine Commercial Segment: CTC targets the Offshore Companies that owns the ships or the Ship Agents that has the responsibility of the marine jetties that they will stop to unload fuels at the VTTV terminal and at the Ship Builders (i.e. DAMEN) that request service-warranty support for ships that have been delivered to our territory.  Oil & Gas Segment: CTC targets the Offshore Companies that are operating in the Oil & Gas Industry. In the last couple of years there is an activity in the Middle East Region, from organizations like Total, Eni-Kogas etc.

Having determined the above four market segments, it should be noted that the first two already exist and CTC has already been involved and has invested money and time; however, both the Marine Commercial Segment as well as the Oil & Gas Segment are new markets for the CATERPILLAR Dealer in Cyprus. Thus, the main aim of this current thesis-project is to propose some business actions of how CTC will apply a New Market Development Plan, in order to get involved in the Marine Commercial, Oil & Gas sector through its CATERPILLAR Products and Product Support Services.