Falling crude oil price is good news for energy company
Low crude oil prices have caused a spike in demand for a Nelson-based energy procurement specialist as companies look to secure their future energy costs before prices rise.The global oversupply of oil and the general uncertainty in the Chinese slowdown has combined to see the price of crude oil to plummet to $45 a barrel.
However, the falling oil price has been good news for Businesswise Solutions, which is growing at a rate of nearly 50 per cent a year as companies look to fix their future energy costs.In the last year the company, which buys and manages energy for businesses across the North West, has grown its turnover from just over £1m to £1.5m and seen its client base expand from 300 to 400.
Managing director Frazer Durris says the issue of energy prices is now being discussed in the boardroom as a way of improving the company’s bottom line.He said: “The market is at a three-year low in terms of the wholesale energy price. Crude oil is hovering around the $45-a-barrel mark. We haven’t ruled out that there may be further falls in the short-term but there’s more likelihood of it rising.
“Companies looking for certainty in their energy budget are taking advantage of the current low prices. When the market does turn you could see startling price rises.“Businesses are getting used to paying low energy prices in much the same way as they are paying low interest rates over a period of several years. That’s not going to continue forever. They want to lock themselves into those low energy prices and that’s leading to a spike in demand for our services.”
Businesswise Solutions was established in 2010, by Durris and Dean Cockett, and they have a range of blue chip clients including DFS, Daisy, and manufacturers Euravia and Futaba-Tenneco.The company has recently invested in a new online utilities portal which will provide customers with real-time information on their energy usage.
“It will protect them against sudden spikes in their activity,” said Durris. “It highlights the areas where they could drive down their cost. They could change their shift patterns because of it or better maintain certain machines that use large amounts of money.“Savings of up to 30 per cent are achievable. Put another way, companies that don’t manage their energy spend could be paying 50 per cent more than competitors who do have a proper energy policy in place.
“If companies are haemorrhaging money through excessive energy usage, this portal will highlight that in an easy-to-read dashboard of information. It’s all well and good having the data, but you need to have it in a format that people can understand.“Most manufacturers don’t have a dedicated energy manager, so we try and encourage them to take on an energy champion in the business so we can train them up. “Being able to plan your energy costs gives businesses some stability and breathing space when they’re doing their budgets. It improves the bottom line at the end of the day.”