The Bazan Group, Oil Refineries Ltd., is located in the Haifa Bay area and is one of the most complex and largest energy groups in Israel. It operates a refinery and is a petrochemical conglomerate. Its modern, high-quality production facilities enable the production of a wide range of refined petroleum products for industry and various sectors, including transport, agriculture, infrastructures and domestic consumption. The Group takes pride in its ability to produce a maximum of approximately 26,600 tons of crude oil per day (approximately 197,000 barrels). Approximately 70% of the Company's products are distributed in the Israeli market and the remainder in international markets (with an emphasis on countries in the eastern Mediterranean.
The refining of crude oil constitutes approximately 85% of the Company's operations and the Bazan Group’s refinery has a ranking of 9 on the Nelson Complexity Index. This is the index which examines the capability of a refinery to produce petroleum products of high added value while using complex refining facilities.
Bazan, together with the Group’s subsidiaries, is a group of industrial companies which operates in Israel and produces petroleum products, polymers which are used as raw materials for the plastics industry, petroleum product raw materials, aromatics for the petrochemical and chemical industries and basic oils and waxes used to product various products. The Bazan subsidiaries’ plants constitute a continuation of the Bazan Group’s facilities and comprise:
• Ownership of 100% of Carmel Olefins Ltd.
• Ownership of 100% of Gadiv Petrochemical Industries Ltd.
This combination of the refineries of the subsidiaries enables Bazan to present maximum optimization in the operations and output of the refining facilities. This is in addition to the production of many other petrochemical products. As a result of the integrated management of the Group, Bazan is capable of creating cost efficiency and increasing its profits. The Company provides power services to industrial companies located in the Haifa Bay area and also offers industrial services, including storage and transportation of fuel products.
Privatized in 2007, the Company is currently controlled by the Israel Corporation Ltd. (approximately 33.5%) and Israel Petrochemical Enterprises Ltd. (approximately 15%). Both the Israel Corporation and IPE are public companies whose shares are listed on the TASE. Approximately 51.5% of Bazan's shares are hold by the public and the shares of the refineries are also listed on the TASE under the symbol Bazan.
Important points for investors
The Bazan Group, which integrates the refining industry and petrochemicals industries in the eastern Mediterranean, has a number of significant advantages:
• The Company's oil refinery is one of the largest in the eastern Mediterranean.
• Compliance with Euro V fuel standards.
• The Bazan Group is proud of its human capital and educated, experienced, technologically skilled employees.
• The Company's facilities are strategically located as a result of the proximity of crude oil from Russia and the Caspian Sea.
• Strategic geographical location adjacent to growing markets such as Greece, Cyprus and Turkey.
Interaction with the petrochemicals industry:
• Synergy with the petrochemicals industry enables optimization of the product mix, increasing aggregate refining margins and moderating margin fluctuations.
• Cost savings resulting from joint management.
Streamlining and development:
• The Company uses natural gas for most of its energy needs and for raw materials.ם
• Additional cracking capacity by operating a clean fuel production facility and a moderate reliable hydrocracker.
• Increased synergy with the petrochemicals industry.
Bazan's areas of operation
The Bazan Group has four principal areas of operation which are reported in its financial statements as business segments and they are:
This segment is the Company's principal area of operations. Its activities include the purchase of crude oil and intermediate products for refining, separation and processing into various products. Some of them are end products and some are raw materials destined for the production of other products. Bazan sells its fuel products to customers in the Israeli and international markets.
Polymers – CAOL
The Company operates by means of this subsidiary which is a private company solely owned by the Bazan Group, in the polymer field. Primarily production of polypropylene and polyethylene which are known as the principal raw materials for the plastics industry.
Polymers – Ducor
The Company operates by means of Ducor Petrochemicals B.V.) which is a private company solely owned by CAOL (registered and active in the Netherlands). Bazan produces polypropylene from propylene (the main raw material of Ducor). This raw material is used in the plastics industry.
The Company operates by means of its subsidiary Gadiv, which is a private company solely owned by the Bazan Group. It produces aromatics material, primarily benzene, paraxylene, orthoxylene and toluene (which are used as raw materials for the production of other products).
The Bazan Group has trading operations which include leasing tankers for marine transport of fuel products and procurement of raw materials from third parties (via trading companies).