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Introduction of PARCO
PARCO is a fully integrated company with an asset
base exceeding 141 billion Rs. It a joint venture between govt. of Pakistan and the emirates of Abu Dhabi. 60% of the share holding is by govt. of Pakistan and 40% by the emirates of Abu Dhabi. It has the refining capacity of 100,000 BPD. Combined storage capacity of over 1 million tons.
In Corporation (1974) KMK Pipeline (1981) MFM Pipeline (1997) A Refinery unit being installed (1999) Mid-Country Refinery Under Construction (1999) Tanks under construction (2000) Mid-Country Refinery (2000) Construction Phase of Port Qasim Station (2003) White Oil Pipeline being laid (2003) White Oil Pipeline (WOP) construction phase (2004) Construction at Ghazi Ghat (2004) Khalifa Coastal Refinery (Future Project)
Organizational Structure
MANAGING DIRECTOR MD Secretariat
DMD Finance
DMD Ops
Finance
Internal Audit
Refinery
Pipeline
Pak-Arab Refinery Limited Corporate Headquarters Korangi Creek Road P.O. Box 12243 Karachi-75190 Pakistan MID COUNTRY REFINERY (MCR) PARCO Mid-Country Refinery Qasba Gujrat District Muzaffargarh Pakistan ISLAMABAD OFFICE House No. 2-B, Nazimuddin Road, Sector F-8/1, Islamabad.
Type of ownership
Its a Joint Venture between Govt. of Pakistan
60 % Govt. of Govt. of
40 %
Pakistan Abu Dhabi
vision
To be a leading national energy company of choice for all stakeholders by employing a strategy of diversification and integration with the right technology and adopting best industry practices for sustained competitive advantage.
Mission
To transport, refine and market petroleum and related products in Pakistan in a safe, efficient, reliable and environment-friendly manner maintaining professional excellence and ensuring favorable returns on all employed resources
Present Factors
products or services markets concern for public image self-concept concern for survival, growth and profitability
Missing Factors
customers
technology concern for employees philosophy
Parco is an Energy life line of the country Parco is location due to Defense point of view it is
catering to 21 days fuel reserve of the country Parco has develop a white oil pipeline from Mehmood Kot to Karachi and Mehmood Kot to Machike and its catering to secure transportation of fuel
CORE VALUES
P A R
Progressive Corporate Outlook Aggressive Pursuit of Technical Excellence Reliability of Service
C
O
Consistency in Performance
Organized & Systematic Development
Culture Analysis
Parco has a tall organogramic structure and a lot different divisions. The total no. of employees in these divisions are 5600. The control and working system is 9001 ISO based. The culture is red-tapism and bureaucratic. The SOPs are defined on a times even if violating them is beneficial.
Corporate level
To cater to the defense and energy lifeline of the
country. To remain self sustainable/viable financially. The main products produce by PARCO are deficit in the country. The strategy applied is blend of push and pull
diversification strategy PARCO at business unit level has started marketing lubricants, LPG and Bitumen on octopus strategy
Functional level
Two way relationship with distributors Slow moving products are marketed on product
linking basics Lubricant being the slowest and highest margin products, PARCO has evolved LFR (Lube Fuel Ratio) system Ensure maximum efficiency in the operation of the distribution channel.
Pestle Analysis
Political situation
The political situation of Pakistan is not satisfactory and unstable. Rapid change in the Govt. and the change of the policies of the previous govt. by the new govt. abruptly effect the Pakistans political situation. Due to these entire factors the foreign investors hesitate to invest in Pakistan. Govt. should device such policies that are beneficial for the local exporter as well as for the investors.
ECONOMIC SITUATION
The economic condition of Pakistan is not
suitable for investment. Market growth rate is very low and new investors hesitate to invest. Increasing inflation rate due to heavy loan make the business environment strict. Actually increase in inflation rate leads to high cost of production so our country products sell out at a high price but with low margin.
SOCIAL SITUATION
The change in the lifestyle of the people affects
the growing demand of the PARCO products. The change in the lifestyle and needs in different demographics also affect the demand of the customers. Due to all these changes PARCO is performing excellent for the excellence of organization as well as for the customer.
TECHONOLGICAL FACTOR
Technological advancement in all the sectors of
the country has changed the entire socioeconomic environment. Especially in the Oil sector there is a lot of technological development.
ENVIRONMENTAL FACTORS
Parco has the following refineries in pak. National refinery ltd (36000) BPDs
LEGAL FACTORS
The products produce by Parco are mainly state
regulated. The import policy of white oil is governed by the government. The government varies from different political parties
Working structure
Parco is governed by board of directors which is
lead by a chairman. The operational activities are governed by the managing directors. There are three deputy managing directors
DMD (OPS)
DMD (Finance)
DMD (Refinery)
COMPETITIVE ANALYSIS
Pak Arab Refinery Limited (PARCO) has the following competitors working in Pakistan. National Refinery Limited (NRL) Pakistan Refinery Limited (PRL) Attock Refinery Limited (ARL) Bosicor Refinery Limited (BYCO)
public limited company at Karachi in 1963. Government of Pakistan took over the management of NRL under the Economic Reforms Order, 1972. NRL is a petroleum refining and petrochemical complex producing a wide range of fuels, Lube Base Oils, BTX (petrochemicals), Asphalts and specialty products for domestic consumption and export. It is located on a plot comprising 263 acres in the Korangi Industrial Area of Karachi. The companys plants have a fuel refining capacity of 2,710,500 tonnes per annum (tpa) of crude oil, two lube refineries with a combined designed capacity of 176,200 tpa of lube base oils (LBO) and a BTX unit with a
stages of transformation. From batch distillation stills of 2,500 barrels per day (BPD), today it has grown into a modern state-of-the-art Refinery with a capacity of 40,000 BPD. VALUE ADDITION ARL is in continuous search for value added products and has produced and supplied Polymer Modified Bitumen (PMB). ARL has successfully added JP-8 to its range of Jet fuel production, which already included JP-1 and JP-4. ARL is supplying Unleaded Gasoline, Low Sulfur Diesel and Low Sulfur Furnace Oil to the market in line with its policy of producing more environment friendly fuels. ARL is now targeting low benzene and low aromatics gasoline production and further lowering sulphur level in diesel to less than 500 ppm.
1995 as a Public Limited Company with the objective of acquiring, setting up and operating an oil refinery of 30,000 barrels per day capacity. The refinery is situated at District Hub, Lasbela, Balochistan, kilometers from HUBCO. The plant consists of a Crude Distillation Unit, the Reformer Unit, the Kerosene Merox Unit, the Light Straight Run Merox Unit, Utilities, off sites and associated Ancillaries.
companies joined hands to set up the biggest oil refinery in Pakistan. In 1962, this idea was materialized in the form of Pakistan Refinery Limited, which had a capacity to process 50,000 barrels of Iranian Light crude oil per day.
purchasing and problem solving tools. Customers Satisfaction PARCO offers best quality products with fast delivery time to the customers. These quality products are being offered at international prices. Name of PARCO is a symbol of a quality, which provides satisfaction in terms of quantity, and quality to its customers. Employee Involvement
developments programs (training), awards (Long service award etc), incentives, bonus, environment. The employee also participates in the decision by giving suggestion for improvement. For continuous improvement, there is quantity lab, available to check the quality of raw material as well as of finished goods. In case of any problem in process different problems solving tools are used to monitor the progress of project. Checklist, histogram, pareto charts etc, are used for improving quality and performance.
Strengths:
Weaknesses:
1.Country wide war houses 2.Big agents at major cities 3.Sales staff in potential market hubs 4.Fake oils yet not available in case of pearl lubricants
Opportunities 1. 2. 3. Top tier market Industrial grades Pearl trucks plus in small packs of 4 and 10 ltrs 4. Company runs retail outlet chain Threats: 1.MNCs increased focus over lube business 2.High quality imported lube oils at affordable prices 3.Counterfeit 4.Price hike S.T strategies Political threat New generation tax Parco has developed a market team and trying to capture smaller projects of PWT (public works deptt.) S.O strategies State of art refinery having production capacity of 7000 M. tons of biturox Pakistan monthly depend 4000 M.tons Local 7000+6000 M.tons Production 13000 M. tons
1.Unattractive packaging 2.Short product line 3.No price control 4.No trade promos 5.Ground level market shares 6.Weak market pull W.O strategies
Over the years 4000M.tons captured by smuggled products Smuggled products direct use in products like motorway M3 FSD- Jhang M4 Jhang- Multan M5 Multan- Khaniwal
W.T strategies Our policy is governed by ministry of petroleum directly So the new govt. policy can directly related by govt. and our work plant of $ 160M can be put on hold
Furnace Oil
Betumen
MS 90RON
JP 4
PARCO
BOSICOR
Weight
Ratio
Rating
Market share
Product quality Customer service Customer loyalty E-commerce Storage Capacity Social Responsibility Environmental Issues Advertisment Profit Margin Total Outlets
0.15
0.05 0.05 0.05 0.05 0.10 0.04 0.05 0.10 0.15 0.20
4
3 3 2 2 3 3 3 4 3 3
2
4 4 3 3 2 3 3 3 3 2
Total
1.00
3.12
2.60
Axis X
Average Score = +3
Environment Strength
(Worst -6, Best -1) Inflation Technology Demand Elasticity Taxation -4 -1 -3 -3
+6.00
FS
Conservative
Aggressive
-6.00
CA
IS
+6.00
Competitive
Defensive
ES
-6.00
Factors
Weight
Opportunities:
Top tier mrkt Industrial grades Pearl trucks plus in small packs of 4 and 10 ltrs Company runs retail outlet chain 0.15 4 0.6
4 2 3
Threats:
MNCs increased focus over lube business 0.15 3 0.45
0.10
0.10 0.10 0.10 1
0.3
0.1
2 3
0.2 0.30
2.85
Quadrant 2
Quadrant 1
Strength
Country wide war houses Big agents at major cities Sales staff in potential mrkt hubs Fake oils yet not available in case of pearl lubricants
Weaknesses
5 6 Unattractive packaging Short product line 0.08 0.05 2 2 0.16 0.05
7
8 9 10
No price control
No trade promos Ground level mrkt shares Weak mrkt pull
0.04
0.04 0.04 0.05
3
2 2 3
0.12
0.08 0.08 0.15
Total
3.14
Weak
1-1.9
3-4
High
Medium Low
1-1.9
2-2.9
3-4
Quality Features
Channel Location
challenges.
Creative and multi-talented, these fine individuals take pride in
OTHER STRATEGIES
R & D:
Procurement
Production
PARCO, for the purpose a very active R & D department is functional. It was R & D departments suggestion that HSFO was value added to Bitumen. The main role of R & D department is to compile a workable report to BD section of marketing and commercial division.
Procurement
Procurement at PARCO is divided into two
departments 1) Marketing and Commercial The main procurement at PARCO is of crude import from ADNOC and ARAMCO 2) Materials All local procurements are done through materials department
Production
PARCO has a refining capacity of 100000 Barrels
per Day at MCR Mehmood Kot District Muzaffar Ghar Another refinery project is under process at Khalifah Point Hub Karachi The production capacity of this refinery would be 250000 Barrels per Day
CONTROL PROCEDURES
Management control
Marketing control
Except lubricants all other products produced by
PARCO are deficit in the country. PARCO has a limited marketing budget of Rs. 20 million per annum, which is mainly consumed inform of pamphlets, give a ways and small hoardings. The appraisers of marketing team is based on sales.
Production control
PARCO has a fully computerized production
system which is controlled by commercial department at import stage by pipeline department while transportation of crude from Kemari to Mehmood Kot and by operations division at refining level. At refinery the refining process is further control by nine different departments thus having a tall structure of control.
Quality control
PARCO is producing the most sensitive fuels and is
maintaining EURO 2 standards still 2002 for this quality control system the following certifications was done
ISO-9001: 2002, Quality Management System ISO-14001: 2004, Environmental Management
System.
Every batch produced samples are tested at in
house LAB and every batch report consists of sample test result
the managing director but is solely based on the recommendations of HR department. Annual appraisal/award system of all employees was implemented by HR department by 2004. HR department monitors the training and development of employees and accordingly conducts in-house as well as out sourced training courses.
Finance control
PARCO
financial involvement in control by finance department and monitored by internal audit department. The seriousness of this department can be evaluated by the designation Deputy Managing Director Finance.
PARCO employees share the achievements of the company and have every reason to feel proud of what has been achieve so far.
account presence, as a major contender in the petroleum sector of Pakistan, with future that heralds bright prospects.
refresher courses for the employees. If directors would make arrangement to provide training to the employees then they would work efficiently. But this productivity will also increase. We would like to recommend that the management should develop some policies for the promotions of efficient workers. If no policy for the promotion of workers so it will create unrest among the workers . The management should make sound policies for the promotions of efficient workers. This will not only increase the productivity of workers but the management
STRATEGIC ALTERNATIVES
FUTURE PROSPECTIVES
KCR (Khalifah Point Coastal Refinnery)
Recommendations
Keeping in view the high threats level from
competition, PARCO should enhance marketing budgets and work on brand establishing. Before commencement of KCR PARCO should start working on establishment its name in international market as 250000 barrels per day production cannot be consume in Pakistan markets. HR should also emphasis on developing and
Thank you