Home / Business and Politics / Matej and Kristijan Krištić (Rox): We compensated for the margin drop due to fuel price freezing with additional sales volumes

Matej and Kristijan Krištić (Rox): We compensated for the margin drop due to fuel price freezing with additional sales volumes

The company Rox was founded by Ivo Krištić in 1992, who led it until last year when he handed over management to his sons Matej (35) and Kristijan (32), with whom we discussed business operations, opportunities, and plans. Matej graduated in finance in Switzerland and worked in London, while Kristijan completed his studies in management and marketing in London and worked in China. The company is engaged in the distribution and sale of consumer goods, representing well-known global brands in categories such as car cosmetics, automotive equipment, household goods, toys, food, gardening, tools, cycling, etc., and has its own distribution, i.e., logistics. The second sector consists of gas stations, of which there are six (two in Croatia, one franchise, and three in Bosnia and Herzegovina), and this year they started building a business hotel, thus definitely embarking on the development of a new business segment – hospitality.

Interestingly, Rox achieved 19.7 million euros in revenue in 2019, which increased to 30 million euros in 2020, the year of the pandemic and lockdown. The past year ended with 49.5 million euros in revenue. We spoke with Matej and Kristijan about everything, and it was interesting to hear how they reacted in some situations their company faced, as well as other companies in the market, such as the corona crisis, but also the freezing of fuel prices, which is decided by the government. During the pandemic and lockdown, their father was at the helm of the company, but they were already involved in all business processes, and their business decision, made in consultation with their father after Prime Minister Andrej Plenković‘s government froze fuel prices, could otherwise be interesting for entrepreneurs.

However, when it comes to assessing that government decision, the Krištić brothers did not want to answer that question. Nor did they want to comment on whether the price freeze is lasting too long, which many entrepreneurs and economic analysts believe. But that is their right. The management model they will apply when they build the business hotel is also interesting, about which they already have everything agreed with the French hotel chain Novotel. Over the past five years, Rox has had significant revenue jumps, made some strategic decisions, and we discussed this, as well as other topics, with the Krištić brothers.

The crisis years have passed, and you have managed to do well in business. What is the secret?

Kristijan: – We have grown in all segments. For example, in 2019, we completed the reconstruction of the gas station on Zagreb’s Slavonska Avenue and started generating revenue from it. Part of the growth was achieved by our gas stations, but we also grew in our core business – the distribution and sale of consumer goods. However, a significant portion of the revenue growth was due to the high demand for masks at that time. Since we have a large number of suppliers from China, we brought masks by plane to distribute them as quickly as possible across Croatia. In fact, we were among the few whose masks had a certificate. The sale of a good portion of goods stopped, and we had to compensate for the turnover. The ‘do-it-yourself’ segment also grew significantly at that time when people stayed at home.

Matej: – Online sales also grew at that time, which should not be overlooked. Additionally, revenue growth in the following years was also contributed by new contracts, for example, when we started selling gummy candies in 2019. We managed to organize ourselves in conditions where we all had problems due to delivery delays; container prices jumped from 1500 euros to 17 thousand dollars. Previously, delivery from China took about three months; now we counted on six.

What is the share of gas stations in the revenue structure, and what are your experiences after the government froze fuel prices?

Matej: – The share is about 30 percent, and regarding the price freeze, the margin has dropped, but we compensated for that loss with additional sales volumes. We managed during the pandemic, and now we have managed to attract new customers.

Who are those customers?

Kristijan: – We have retail and wholesale, meaning a lot of retail customers because the gas stations are in good locations. Wholesale is also growing. Our wholesale team, which has been in this business for about thirty years, has done a really good job.

How did you perform in the first nine months of this year?

Matej: – Revenue grew by 20 percent, more or less equally across all segments. We are meeting our plans and believe this year will be good.

I assume that revenue has grown in recent years partly due to rising prices. Will the prices of those products rise next year?

Matej: – They will probably rise, but that does not depend on us, but on the production and raw materials used by our suppliers. We want to be fair to our customers and keep margins as low as possible, but sometimes it is not possible to maintain prices. For example, the price of cocoa has drastically increased on global exchanges, so the price of some chocolates has also risen. Now the question was what to do with those products: continue selling them or replace them with similar ones that have less cocoa. So, it does not depend only on us. On the other hand, the global economy is currently facing problems due to instability in the Middle East, so a new disruption of logistics chains is not excluded, as is already happening in parts of the Arabian Peninsula influenced by the Houthis.

How does Rox operate in the region, why did they decide to invest in building a business hotel, and what other projects are planned, find out in the printed and digital edition of Lider.

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