The phased deregulation of the petroleum
sector in India is a reality. Not only in our own industry, but across
the nation, global competitiveness will be the sine qua non for survival
and growth. The Government of India has already withdrawn the administered
pricing mechanism in several sectors of the petroleum business. The other
sectors too are expected to be opened up in the near future. Over the last
few years we have seen relatively soft oil prices globally- primarily because
of oil producing countries adopting a policy of defending their market
share rather than the price level. However, this is likely to result in
a decline in upstream development and with the anticipated increase in
consumption, the seeds for future crude oil price increases are being sown.
In this situation,the year 1998-99
has seen robust growth and improvement in the all-round performance of
IBP Company Limited. The company have recorded its highest ever turnover
crossing the Rs. 5000 crore mark for the first time. It has also recorded
the highest ever profit before tax of Rs. 41.34 crore showing a growth
of 9.5% over the previous year. The profit after tax has shown a healthy
growth of 12% as compared to the previous year. The investor - friendliness
of IBP is reflected in the dividend of 43% recommended in 1998-99,
which is the highest since the company's entry into the public sector.
IBP entered in the petroleum business
at the beginning of this century in 1909. It has to be noted that, during
the past 91 years, the company have succeeded in achieving consistent and
continuous growth in a largely changing environment. A blend of experience
and dynamism has helped the company - the oldest in the Indian Petroleum
Sector - to carve a niche for itself in a highly competitive arena. The
emphasis has been and continues to be on value creation for the share holders.
At the same time, IBP is well poised to step into the new millennium with
even greater emphasis on customer focus and quality services.
IBP's vision for the years ahead
is to leverage the company into a position of eminence in the oil industry
replete with sound fundamentals and significant market share - in short,
a strong corporate to reckon with. The future growth is primarily based
on taking its tested and proven Retail Excellence to still greater heights.
IBP has always provided the most outstanding customer service at the Retail
outlets which is duly reflected in its :-
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Highest per pump thruput especially
in High Speed Diesel.
-
Q & Q Assurance Scheme at its outlets
to provide right quality and quantity of products to its customers.
-
Introduction of the novel concept of
the Trade Linkage Scheme to provide truckers with much needed facilities
along the national highway routes.
-
Institution of the IBP Dealer Award
Scheme to motivate its dealer fraternity to provide enhanced level of customer
service and ambience.
As a part of the programme for maintaining
its competitive position, IBP is in the process of building up its own
infrastructure for supply and distribution of petroleum products. The company
is also in the process of finalising commercial Agreements with other oil
marketing companies to take assistance from them for product supplies at
various locations. IBP has drawn up a strategy for growth in the profitable
but highly competitive lubricants business. It's efforts in advertising
and promoting IBP lubricants under the umbrella branding of `IBP Red' positioned
as quality lubricants for quality engines have been manifestly successful.
With the sales plan Entitlement (SPE) system amongst the oil marketing
companies having been withdrawn, IBP is focusing its efforts on increasing
its participation in the Bulk Trade of petroleum products where the company
is registering significant growth rates. The company's endeavour is to
achieve growth rates higher than that of the industry and enhance
its market share.
Now the company has undertaken programme
of re-structuring some of its business in the light of competition and
continued losses. At the same time, the company has successfully taken
steps in several areas for right sizing of its manpower to improve upon
its productivity and operational efficiency. These steps would also help
the company to take up various new activities without increase in manpower.
For IBP, customer orientation is
not just a philosophy but a living practice. The company has been continually
upgrading its products and services. The advent of liberalisation and competition
has certainly introduced an increasing level of competition in customer
service.
IBP has adopted various measures
to compete with other oil companies for superior customer service. Establishment
of Highway Clubs under the Trade Linkage Scheme, continuing Q & Q programmes
and setting up of`jubilee outlets' reflect the company's focus on improved
customer service.
IBP has identified several factors
for stimulating growth against the background of the expected liberalisation.
These include :-
-
Maintenance of competitive edge, both
in terms of providing quality service to the customers and controlling
the cost structure.
-
Promotion of customer satisfaction through
creation of value for money, inculcating brand equity.
-
Emphasis on dealer motivation and participation
in its customer- orientation programmes.
-
The entry into new markets as well as
introduction of new range of products or new applications for existing
products.
-
Inculcation of innovative approach to
business with new initiatives.
-
Improving effectiveness of Human Resource
Management through training and re-training and through rightsizing of
manpower
IBP's focus in the emerging millennium
would be towards the goal of maximising shareholder value. The objective
of providing best value for its customers would be closely inter-linked.
Two important ingredients for creation of the value chain would be - a
motivated and dedicated team of employees and an efficient management information
system based on latest information technology.
IBP - with a reputation for `Retail
Excellence' is now concentrating on superior customer service and diversification
into different segments of the petroleum business. The emerging environment
promises to offer considerable room for a relatively small company like
IBP willing to take calculated risks with flair, creativity and vision.
Finally, the company believe that it has succeeded in consolidating its
position and successfully planted the seed for its future growth, and is
fully poised for a rapid and impressive takeoff in the new millennium. |