The Fuels business manufactures and markets peat briquettes, imports and distributes coal to the retail market and operates an oil distribution business. Its brands are household names and include Bord na Móna Peat Briquettes, Suttons Coal and Oil and Black Diamond Coal. Fuels also markets a range of ignition category products including Firepak, Firelogs and Firelighters.

The severe winter conditions helped to boost Fuels sales, despite consumer caution and international competition. The business launched an innovative and environmentally friendly biomass briquette during the year.

Results
The Fuels business performed strongly with demand for the briquette and coal products similar to the previous year. The key drivers were the severe weather conditions and changes to consumer behaviour influenced by the economic downturn over the past two years which has resulted in movement back to solid fuels by some consumers. Demand for premium branded ignition category products such as firelogs and firelighters was curtailed as consumers became more sensitive to price and switched to cheaper own label products. Oil demand slowed as the recession impacted on economic activity generally and the construction sector in particular. The business responded to the increased demand at the peak of the cold spell with effective supply chain management.

Competition
The ignition category grew during the year but the business’s share was negatively impacted by the increase in private label and foreign imports. This trend has increased margin pressure as the cheaper alternatives have significantly lowered unit pricing in the category. This will not be sustainable in the medium term and the business is actively engaged in developing new innovative product solutions to add stimulus to a category that is in need of new product activity.

Sustainability
Whilst the business’s main focus remains maximising the potential from its traditional products most of the product development is centred on a sustainability agenda. The Fuels business succeeded in bringing its first biomass briquette to the market during the year. This was a biomass/peat blend 40% biomass/60% peat. Work has progressed on a full 100% biomass version that will be carbon neutral and it will be released for consumer trials shortly. Additionally, the business has acquired an interest in a technology that will convert waste paper into an eco-ignition product. This is undergoing marketplace evaluation. It has the potential to provide a value add to the resource recovery business by establishing a need for waste paper.

Innovation
The business recorded a number of firsts during the year, including the launch of biomass briquettes into the Irish market and the launch of a biomass fuel for patio heaters into the UK market. This is part of the business’s strategy to develop a broader range of retail products in the UK market.

The manufacture of briquettes sometimes requires a secondary fuel source to fuel the boiler. During the year, the business replaced mineral oil with a by-product of its coal-bagging operations leading to operational savings.