Six Developing.Growing.Performing. KMG International

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1 Six Developing.Growing.Performing KMG International Vienna, February 2 nd

2 WHO WE ARE KMG International. Economic Impact Overview KMGI s imports from Kazakhstan cover approx. 40% of Romania s refinery intake. The distribution of the products is carried out via the Midia port but also by road and rail. KMG International owns the largest and most modern refinery in Romania and the Black Sea region Petromidia Năvodari which boasts a processing capacity of over 5 million tons annually. Over 1,100 fuel distribution points under the Rompetrol brand and Dyneff brand (only in France and Spain) Highest European fuel standards Third largest taxpayer in Romania, its contribution to the national budget ranging from 2.5% to 3% of the total Government revenues between 2013 and KMGI comprises 55 entities, headquartered in 16 countries on 3 continents Over employees are currently working for KMGI worldwide 2 2

3 WHO WE ARE KMG International. Integrated Global Business 61% Romanian employees 7599 employees in

4 WHO WE ARE Our People 55 entities 16 countries One of the biggest employers in Romania supporting in a direct, indirect and induced manner an estimated 15,500 jobs 7000 employees worldwide INDIRECT JOBS 9,245 DIRECT JOBS 4,772 INDUCED JOBS 1,483 More than 200 distinct specializations worldwide One of the youngest management team in the manufacturing industry. 4

5 WHO WE ARE Petromidia Refinery 5

Petromidia Operations & Economic overview One of the most modern refineries in SE Europe and

exporter. Petromidia and Vega refineries cover more than 40% of Romania s refining capacity.

USD invested between 2007-2015 in the modernization of Petromidia Refinery Petromidia

The Laboratory Division of KMGI, RQC, is one of the top laboratory analysis companies on the

6 Petromidia Operations & Economic overview One of the most modern refineries in SE Europe and the largest refinery in Romania Unique location on the Black Sea shore in Navodari, 20 km North of Port of Constanta. Rompetrol Rafinare is Romania s largest exporter of oil products and the second national exporter. Petromidia and Vega refineries cover more than 40% of Romania s refining capacity. approx. 1.4 bil. USD invested between in the modernization of Petromidia Refinery Petromidia operates its own logistics: railway, access to the Danube-Black Sea Channel, Port of Midia. The Laboratory Division of KMGI, RQC, is one of the top laboratory analysis companies on the national market. In 2009, KMGI put into operation Midia Marine Terminal, in the Black Sea offshore Top contributor to the Romanian state budget in the past 9 years with over 12 billion USD. Petromidia plays a significant economic role in Constanta County. 6

Petromidia The city of an unique population In 1978, before the construction of the Petromidia Refinery, Navodari, the city where the

Following the launching of the Petromidia Refinery, the city s population expanded up to 40.

Petromidia is the main economical agent in Constanta county, comprising over 1,800 employees and even more contractors.

7 Petromidia The city of an unique population In 1978, before the construction of the Petromidia Refinery, Navodari, the city where the refinery is currently located hosted approx inhabitants. Following the launching of the Petromidia Refinery, the city s population expanded up to inhabitants (in 2016) as a result of the workplaces created and the investments made by KMGI in the area. Petromidia is the main economical agent in Constanta county, comprising over 1,800 employees and even more contractors. Petromidia Refinery is basically a city, with a spread of 480 hectares and 37 km of railway (within the Refinery). There are over 60 specializations on Petromidia Platform from oil & gas professionals to divers, IT, finance, HR 90 colleagues are working in Petromidia Refinery for nearly 40 years 7

8 Current employment issues Youth unemployment. Skills shortage 13.7mil. WHO ARE NOT IN EMPLOYMENT, EDUCATION OR TRAINING 90 million people in Europe aged mil. UNEMPLOYED 1/3 of Europeans aged Have a TERTIARY DEGREE 82% of Europeans aged Have completed UPPER SECONDARY EDUCATION Youth unemployment in Romania is at 24%, the highest rate in the last 25 years Economical causes Educational and training causes Economic recession and insufficient job creation Uneven economic development Mismatch between the skills and training needed by employers and the educational curricula Lack of work experience and practical training 8

Petromidia 5 Generations at work 5 Generations are working side by side Value authority Expect

than 200 employees are expected to retire by 2020, risking the company to lose key knowledge,

hard as necessary Importance of work-life balance Technologically savvy Goal & achievement oriented

9 Petromidia 5 Generations at work 5 Generations are working side by side Value authority Expect deference to their opinions Comfortable with authority Respect must be earned Digital natives More than 200 employees are expected to retire by 2020, risking the company to lose key knowledge, knowhow and unique skills Knowledge Transfer Top-down management Hard working Workaholics Work as hard as necessary Importance of work-life balance Technologically savvy Goal & achievement oriented Fast decision makers Highly connected The youngest employee is 19 years old, while the oldest is 76 years old. 9

10 Our Challenge 1. Retaining key knowledge inside WHY Over 200 employees are eligible for retirement by 2020 More than 150 key positions are going to remain vacant due to employees retirement and lack of technical skills in the market Risk of losing key knowledge and skills, due to lack of prepared workforce to take over key positions WHAT TO DO Prepare employees to take over key positions in a short period of time, gaining both practical and theoretical knowledge through Knowledge Transfer Develop a young team of professionals ready to take over responsibilities and tasks by attracting the young generation and prepare it through Internship and Traineeship Programs 10

11 Our Challenge 2. Building Capabilities for Today & Tomorrow WHY Rapid pace of skills and capability development needs Educational tools and methods, do not keep the pace with the latest innovations & technologies in the oil & gas field Gap between the theoretical and practical skills requested by the employers and the skills a student can gain in school WHAT TO DO Accelerate development of employees skills and competences and increase employees flexibility and readiness to switch to a new role through Cross-Training and Job Rotation Enable continuous improvement and operational efficiency by encouraging innovation through a dedicated platform 11

flexibility to get job done on their schedule Connect responsibility with personal goals.

12 Our Challenge 3. Motivating 5 Generations Work for success. Connected to everyone and everything Technology and social media part of work Want their actions to connect with the good of the company Need to see how their actions make a difference Need flexibility to get job done on their schedule Connect responsibility with personal goals. Want to be discovered A platform of Motivational Projects and Initiatives was developed in order to address the motivational needs of each generation. Knowledge Transfer Seniority Recognition Shift Competition Top Expert Award Retention Program Succession Mngm Cross- Training Career Development Innovation Program Young Leaders Club Top Expert Award Pay for Performance Mentoring Program Knowledge Transfer Social Platform Mentoring Program Employee of the Month Performance & Career Management Internship & Traineeship Internship & Traineeship 12

13 OUR PLAN 13

14 Our Plan. Step 1 Setting Partnerships with Educational Institutions Set long-term partnerships with universities and high schools in the oil & gas field Support students build a strong academic foundation, that provides all needed theoretical knowledge to be put into practice Recognize and support potential and hard work of high school and university students Encourage high school students to achieve high academic results and continue their education with university studies Understand students development needs and develop an action plan to address them 14

15 Our Plan. Step 1 Challenges of the educational system in preparing students for actual careers Outdated educational tools and methods, that do not keep the pace with the latest innovations & technologies in the oil & gas field Lack of technology and properly equipped laboratories where students to gain practical skills Low students awareness of job opportunities and Internship/ Training programs available to gain practical knowledge Decreasing rate of students graduating the BAC exam Reduced availability to work during the university year, due to the busy university schedule 15

job experience and updates regarding the innovations and technologies/ installations available in a refinery; Support students in developing their soft skills and preparing them for employment

16 Our Plan. Step 2 Building the Leaders of Tomorrow Student Development Action Plan A higher involvement of the company in the educational system by providing instructors (Rompetrol professionals) to share their job experience and updates regarding the innovations and technologies/ installations available in a refinery; Support students in developing their soft skills and preparing them for employment workshops within the universities and high schools, hosted by HR Specialists Provide the students with the opportunity to gain practical skills student practice programs Inform students about the opportunities the company offers to them - Open Day events, where students were able to see how a refinery looks like and meet the management team of the companies operating on Petromidia and Vega Platform KMGI developed long-term partnerships with technical and economic Universities in Constanța, Ploiesti, Timisoara and Bucharest. As of 2002, KMGI opened its doors for over 1000 students, graduates of mid and high education and rewarded their performance and potential through sponsoring educational events. 16

17 Our Plan. Step 2 The Internship Program - bringing together young energy with experienced leaders WHY Develop top students into future employees by helping them gain technical skills and practical experience through the Practice and Internship programs Get a fresh perspective and improve existing business processes; support innovations Recognize and support potential and hard work of high school and university students Prepare a pipeline of future employees who can take over the responsibilities of future retirees Ensure knowledge transfer from the experts and future retirees to the young generation 17

personnel 1 month of Practice, in order for the students to get acknowledged with the Refinery and its operations 2 MONTHS of INTERNSHIP (during which the Interns are rotated through all

to the student during the entire program by; answering industry/work related questions, providing information on topics studied in university; Prepares the intern s development plan;

development; makes recommendations for improving identified weaknesses and develop existing skills and potential.

18 Our Plan. Step 2 Mentoring the next generation ANNUAL INTERNSHIP PLAN PRACTICE INTERNSHIP MENTOR DEVELOPMENT PLAN taking into account the future business needs, future open positions, retiring personnel 1 month of Practice, in order for the students to get acknowledged with the Refinery and its operations 2 MONTHS of INTERNSHIP (during which the Interns are rotated through all Production units) One mentor assigned to the student throughout the roll-out of the Internship Elaborated for each Intern and monitored throughout the program Mentor s role Provides support to the student during the entire program by; answering industry/work related questions, providing information on topics studied in university; Prepares the intern s development plan; Provides guidance and career advice based on the student s expectations, skills, strengths and specialty; Periodically meets the intern to offer feedback regarding his/her activity and development; makes recommendations for improving identified weaknesses and develop existing skills and potential. Evaluates the student s progress throughout the entire program and evaluates his/her hiring potential As of 2002, KMGI opened its doors for over 1000 interns, graduates of mid and high education, out of which the outstanding ones were offered permanent jobs. Annually, upon completing the programs, more than 50% of the interns have entered the Traineeship Program and have been hired within KMG International s member companies, in different areas of activity. 18

19 Our Plan. Step 3 Generation Exchange OUTCOMES Renew the company s workforce Facilitate the knowledge and technical skills transfer from our highly experienced employees to the new generation, in order to prepare them for taking the business further. HOW Knowledge Transfer Project; Cross Training Project; Succession Plan for future retirees; Keep key information within the organization (especially for the cases where the information is not captured within Procedures, Instructions, or any other documents) Accelerate development of employees skills and competences and increase employees flexibility and readiness to switch to a new role 19

training; Practical workshops (job shadowing); Evaluation of trained employees Knowledge Transfer Identified key positions and matched mentors and disciples for Knowledge Transfer Program; Develop

20 Our Plan. Step 3 Generation Exchange through Knowledge Transfer and customized Cross-Training Programs Cross-Training Continuous development and improvement trainings aiming to develop the technical skills of employees with operational roles. Prepares employees to take on new task and responsibilities within complementary areas; Increases employees flexibility and readiness to switch to a new role; The trainings consist in: Classroom training; Practical workshops (job shadowing); Evaluation of trained employees Knowledge Transfer Identified key positions and matched mentors and disciples for Knowledge Transfer Program; Develop Competency Matrix for each key position; Elaborate & implement Knowledge Transfer Plan & Action Plan for each pair of mentors and disciples; In 2016, 18 young employees were involved into the Knowledge Transfer Program and have already took over new roles and responsibilities; The project continues in 2017, with more employees planned to take over new roles and develop their professional careers In 2016, 57 employees participated to Cross-Trainings; Employees were prepared to take on new roles & responsibilities after the Cross-Training 20

21 Outcomes The new generation is taking over 21

22 Thank you! 22

/ Introducing Investors in Young People

/ Introducing Investors in Young People A new Award for changing times / Introduction / The youth employment landscape We believe in realising the potential of people. Giving people the opportunities to