IndianOil charts big retail push in 2008-09
Mumbai   07-Feb-2008
IndianOil has earmarked a marketing spend of at least Rs2,000 crore during 2008-09, of which Rs 1400 crore has been earmarked for retail initiatives. The balance will be allotted for creating/upgrading bottling plants, storage terminals, aviation fuelling stations and pipelines. Director (marketing) GC Daga told DNA Money that the retail drive would pay special attention to rural India where IndianOil has commissioned kisan seva kendra (KSK) outlets. These are no-frills fuel stations, which number nearly 1,800, and plans, are on to increase this by 1,000 each year at an investment of Rs 100 crore. IndianOil has also decided to pay greater attention to building the IBP brand during 2008-09. The former stand-alone marketing oil PSU is now part of the IndianOil fold post-merger. The 7,500 plus retail outlets will continue to bear the IBP logo "for the time being" and IndianOil has decided to invest at least Rs 100 crore towards upgrading IBP "Investments have not been made to upgrade its visual identity and the last 3 years leading to the merger have seen valuable time lost. We will now invest in that brand to ensure better visual identity and retain the logo though it will now say somewhere that it is an IndianOil," Daga said. In the process, there will be more attention paid in 2008-09 to bettering the IBP network in terms of upgrading dispensing units (through automation) and so on. IndianOil is also gearing up to commission its first hydrogen-compressed natural gas (HCNG) outlet towards the last quarter of next fiscal: This will involve 10% hydrogen in CNG and retailing it as a green fuel. The company will study market reaction carefully before embarking on this aggressively Daga was, however, bullish on the prospects of auto LPG. By the end of March this year, IndianOil hopes to have at least 200 outlets in place. These are part of the regular retail outlets, which deal with petrol and diesel though plans are on to set up stand-alone auto LPG stations soon. "We believe that auto LPG has tremendous potential. It is cheaper than petrol and a lot cleaner. More importantly, from our point of view, it will curb diversion of domestic cylinders to vehicular use," he said. IndianOil is setting up two LPG import facilities in Chennai and Kochi, which clearly reflect its intent. It already has a 47% share in auto LPG and would like to see the number of outlets rapidly increase. In contrast, CNG is on a lower priority list and for the moment, there are a handful of stations. This could change once more gas is available. IndianOil had roped in consultant, Technopak India to chalk out a roadmap that would see better use of its 17,000 plus retail outlets, "Technopak has given its report and we are in the process of implementing this in a pilot project that will comprise 80 of the regular outlets and 20 KSKs. The idea is to design an outlet and rope in a partner to work on the business," Daga said. The model will see foods and beverages/takeaways focused in urban outlets and restaurants on highways and rural areas.