Mumbai, Jan. 6: Indian Oil Corporation (IOC) is open to acquiring the government’s remaining stake in IBP Co. While IOC has a call option to this effect after three years, the government has a put option for its stake after two years.
Stating this today, IOC chairman M. S. Ramachandran said that after acquiring the stand-alone marketing company, efforts are on to find synergies and business integration between the two firms though IBP continues to operate as a separate company.
Last year IOC had acquired the government’s 33.6 per cent stake in IBP and this was followed by an open offer of 20 per cent. “We will be happy to buy shares from the government,” Ramachandran said.
In business integration, IBP is now sourcing all its product requirements from IOC as against the earlier practice of obtaining it from Bharat Petroleum Corporation. Similarly, in a bid to bring down costs, both the companies have closed some depots which were overlapping. Additionally, IBP has also shelved its future plans to set up port terminals.
Ramachandran added that a co-ordination council, comprising IOC’s marketing director and IBP’s managing director, has been formed to align business activities so that both do not compete with each other.
However, on the retail front, both IOC and IBP are building up separate brands that have different attributes. Here, IOC has been stressing on its premium petrol and diesel brands while IBP has launched its premium grade petrol, Josh and diesel, Shakti, respectively.
Ramachandran was here to formally launch IBP’s Q&Q assurance programme in its new avatar, “Pure Bhi Poora Bhi”. He also introduced IBP’s new brand ambassador, filmstar Jackie Shroff. The Q&Q scheme was introduced in August 15, 1997 and it has been implemented at 97 per cent of its over 1,800 outlets. The scheme guarantees both quantity and quality and is expected to further build up customer confidence.
IBP officials said that last year there was a slowdown in the company’s investment in retail marketing segment on account of disinvestment. As a result, there was a drop in IBP’s sales in comparison to the industry.
However, this trend is expected to be reversed as the company has been concentrating on achieving retail excellence through a spate of initiatives and expansion of outlets.
So far, this year alone, IBP has launched close to 350 retail outlets in the country. “During the APM era, the company could only commission around 3.68 per cent of the total retail outlets in the country. This shackle is no longer there,” an official exclaimed.