Foreign investment represents huge opportunities for Greece. The country exited the memorandum era just this August, and attracting investment is a crucial way to boost Athen’s economic development and growth. Energy, and particularly natural gas, is one of the key sectors attracting such investment, both in terms of promoting local retail as well as greater involvement in regional projects.
Greek energy-provider ZeniΘ (pronounced “Zenith”) is one such case. Italian multinational energy company Eni, one of the biggest publicly traded oil and gas companies in the world, first invested in ZeniΘ’s parent company – gas supplier Thessalia –back in 2000. Eni then became the sole shareholder of ZeniΘ this year, when it purchased the company’s remaining 51 per cent stake from Greece’s Public Gas Corporation (DEPA) for 57 million euros. This happened at the start of the year, just after the country took the final step of its energy unbundling plan – liberalising the gas market. “We expect really to have a very successful combination…an explosion of positivity between [our] two attitudes”, comments Federico Regola, ZeniΘ’s current CEO and the former VP of Eni.
Rebranding a Local Company
Eni’s investment into ZeniΘ is a vote of confidence in Greece’s expanding marketplace and has given the local company a big leg-up in Greece’s developing energy market. Thanks to the fact that the country’s energy sector has liberalised in step with European regulations, ZeniΘ has blossomed into a Hellenic trailblazer as the first integrated energy provider in the country, handling both natural gas and electricity. In fact, ZeniΘ received the Creative Rebranding Business and Geographical Development award just this year. “We were kind of a start-up, [but] with 300,000 and more customers…looking at the market as a new company”, says Regola, the brains behind ZeniΘ’s most recent stage of transformation.
ZeniΘ’s rebranding came after 18 years of experience as Thessaloniki-Thessalia. Since revamping the brand in 2000, ZeniΘ has opened up a new market in Athens, seeking to provide social services, along with expanded energy to the rest of Greece. It’s an effort spearheaded by Regola, who joined to ZeniΘ in 2014 after more than 30 years of experience in the energy market with Eni.
“The strategy that we follow for the brand…. has to say that it’s different to the others, modern, and it also has …our roots”. Regola adds that the “Theta” in the company’s previous name is a direct reference to the firm’s predecessor, Thessaloniki-Thessalia, and its strong ties to Greece. Their new name, ZeniΘ, embodies their pan-Hellenic aspirations.
In fact, he attributes his success as a foreign investor to going local. “You have to live here. People in the company here are very resilient”. He adds that there are “many capable young people because there is a very good culture here … so you find really a good level of employment in which you can build your story here in Greece”.
Facing Ongoing Growing Pains
While revamping the enterprise has been a successful transformation, Regola admits that it was not an easy task. “We were an ex-monopoly company that had to change dramatically and quickly in a very dynamic and free market. So we changed everything in more less six months, from the IT system, the way we work, the people, the product, and finally, as you say, the brand. And we’ve become a pan-Hellenic player”.
Moreover, as an integrated solutions company, ZeniΘ also seeks to preserve Greece’s natural beauty by being environmentally friendly. Natural gas is the cleanest source of energy among carbon-based fossil fuels, with significantly lower emissions than its competitors, coal and oil. Improved efficiency means not only reduced emissions but reduce costs as well.
While this is all good news for Greece, there is still much to be done. “Comparing electricity, where we have 7 million customers, [for] gas, we have half a million. This is not good”. Much of Greece’s national infrastructure needs to be updated, particularly when it comes to natural gas distribution. There is a large disparity between the developed north, which has over 60 per cent of people relying on natural gas, and south, where natural gas is used by barely 10 per cent of the people in the Attica region. “Gas has to increase”, Regola says fervently, however, he points out that both he and the company recognize that “there is room to increase [gas consumption], and I see also that there has been a lot of contribution by the government, by all the authorities, to speed up this process. There needs to be a really a strong push, a strong contribution by the authorities. So we are positive”.
Contributing to the Greater Greek Community
While ZeniΘ continues to penetrate the market, it has a ways to go before it can catch up with its state-controlled competitor. The government-controlled electric power company, Public Power Corporation (PPC), still holds over 80 per cent market share, and in a distant second place is private actor Heron with just 4.3 per cent of the market. Thus, alternative providers like ZeniΘ have their work cut out for them. In an effort to remain competitive, ZeniΘ is offering deals and bundles to entice consumers. “We are pushing a lot of value-added services because this is the future”, Regola notes.
He also says the company is doing more than just pursuing purely profits. “We are trying to be not only a business company but also a social company”, he points out. To that end, ZeniΘ is rolling out a lot of new changes to benefit their customers. Regola proudly stated that ZeniΘ has sponsored the national Greek football team. “We did it because we consider [the team] a part of the home of the people and it is also a good example of Greek sports.”.
In addition, ZeniΘ has released health cards that offer free diagnostic exams to every customer and their family members. “Because of course [our customers] care about the cost of gas, and of course they also care about the cost of their life, and taking care also of their full family!” Finally, in partnership with global insurance company AXA, ZeniΘ offers customers maintenance work on leakages and any other problems with their gas installation at discounted prices. In some cases, repairs are entirely free.
In this way, Regola hopes to chip away at PPC’s near-monopoly. Ideally, PPC shares will fall below 50 per cent by 2020, and to 62 per cent by as soon as December of this year – thus further liberalising Greece’s energy economy.
A smart combination of local knowledge, foreign investment, and over 30 years of energy expertise means that Greece is not only poised to harmonise with the broader European energy market, but it also ensures that liberalisation means new opportunities for the Greek industry in the natural gas sector.