Presented To:

Prof. Ghulam Ahmad Rana

Presented by:
Shahnawaz Khanzada 0182
Maryam Shahid 1249
M. Ibrahim 1194
Ayesha Ansari 1235
Ahmad Raza 1222
Zeerak Batool 1223
Malik Zain Nawaz 1185
 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.
History and Evolution of PARCO
• 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)
PAK ARAB REFINERY LIMITED
What’s PARCO all about?
MID COUNTRY REFINERY
STRATEGIC STORAGE
FACILITIES
PRODUCTS AND SERVICES
 Organizational Structure
MANAGING
DIRECTOR

MD Secretariat

DMD Finance DMD Ops Admin &

Marketing

Finance Internal Audit Refinery Pipeline HR, Admin and Marketing &
Transport Commercial
 Contact Offices in Pakistan
 CORPORATE HEADQUARTERS
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.
 Operational Offices in Pakistan

 4 terminal Station
 8 Pumping Station
 6 Marketing Regional Offices
 2 Land Acquisition Collectorates
 Number of Total Employees

There are more than 5600 Workers who are

currently working in PARCO all over Pakistan.
 Type of ownership
 It’s a Joint Venture between Govt. of Pakistan and Govt. of
Abu Dhabi

60 % Govt. of 40 % Govt. of
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
 Recommendation on mission
statement

We believe on giving the designation to employees according

to their qualification. We will make all efforts to exceed our
customer’s expectation and will lead our industry industries
to appropriate technologies. Our firm will operate at highest
level of ethics.
 GOALS & OBJECTIVES

 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 Progressive Corporate Outlook

Aggressive Pursuit of Technical

A Excellence

R Reliability of Service

C Consistency in Performance

Organized & Systematic

O Development
 Key Success Factors

 Professional attitude towards work

 Successful strategy implementation
 Professional team
 Right decision making
 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.
 Culture reflected by practices
 Devolution of Authority
 A lot of Red Tapeism
 Very effective Human resources department working very
actively for HR developement
 Very well defined SOP’s
Main Strategies Under Taken
 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
 Business unit level:

 On the business unit level PARCO is applying

‘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.
External And Internal Assessment
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 Pakistan’s 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 socio-economic 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
 Pak refinery ltd (30000) BPDs
 Attock refinery ltd (22000) BPDs
 Bosicor refinery ltd Byco (16000) 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)
 NRL (NATIONAL REFINERY
LIMITED)
• National Refinery Limited (NRL) was incorporated as a 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 company’s 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 designed capacity of 25,000 tpa
(ARL) ATTOCK REFINERY LIMITED
• Since its commissioning in 1922, ATRL passed through various 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.
 (BPL) BOSICOR PAKISTAN
LIMITED
• The Company was incorporated on 9th January, 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,
½ 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.
(PRL) PAKISTAN REFINERY LIMITED

 In 1959 Pakistani Investors and major oil 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.
 Total Quality Management
Total quality management (TQM) stresses following three
principles.
 Customers satisfaction
 Employee involvement
 Continuous improvement
• It is also includes benchmarking, process design, 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
• For employee involvement, PARCO provides 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.
 Porter’s 5 Forces Model

 Threat of New Entrant High

 Threats of Substitutes High
 Bargaining Power of Consumers Moderate
 Bargaining Power of Supplier Moderate
 Rivalry among Competing Firms Moderate

overall industry= mature and

competitive
 S.W.O.T MATRIX FOR
PARCO INDUSTRIES

External and internal assessment

 Strengths: Weaknesses:

1.Country wide war houses 1.Unattractive packaging

2.Big agents at major cities 2.Short product line
3.Sales staff in potential market hubs 3.No price control
4.Fake oils yet not available in case of pearl 4.No trade promos
lubricants 5.Ground level market shares
6.Weak market pull
Opportunities S.O strategies W.O strategies

•State of art refinery having production •Over the years 4000M.tons captured by
1. Top tier market
capacity of 7000 M. tons of biturox smuggled products
2. Industrial grades •Pakistan monthly depend 4000 M.tons •Smuggled products direct use in
Local 7000+6000 M.tons products like motorway
3. Pearl trucks plus in small packs of 4 Production 13000 M. tons M3 FSD- Jhang
M4 Jhang- Multan
and 10 ltrs
M5 Multan- Khaniwal
4. Company runs retail outlet chain

Threats: S.T strategies W.T strategies

1.MNCs increased focus over lube business •Political threat •Our policy is governed by ministry of
2.High quality imported lube oils at New generation tax petroleum directly
affordable prices •Parco has developed a market team and So the new govt. policy can directly
3.Counterfeit trying to capture smaller projects of PWT related by govt. and our work plant of $
4.Price hike (public works deptt.) 160M can be put on hold
5.Reduced margin profit
 BCG MATRIX FOR PARCO

External and internal assessment

Furnace Oil Betumen

MS 90RON JP 4
C.P.M- COMPETITOR PROFILE
MATRIX

External and internal assessment

 PARCO BOSICOR
Critical success Factors Weight Ratio Weighted Rating Weighted
Score score

Market share 0.15 4 0.60 2 0.40

Product quality 0.05 3 0.15 4 0.20
Customer service 0.05 3 0.15 4 0.20
Customer loyalty 0.05 2 0.10 3 0.15
E-commerce 0.05 2 0.10 3 0.03
Storage Capacity 0.10 3 0.30 2 0.20
Social Responsibility 0.04 3 0.12 3 0.12
Environmental Issues 0.05 3 0.15 3 0.15

Advertisment 0.10 4 0.40 3 0.30

Profit Margin 0.15 3 0.45 3 0.45
Total Outlets 0.20 3 0.6 2 0.40

Total 1.00 3.12 2.60

 THE SPACE MATRIX

External and internal assessment

.
Internal Strength Position External Strength Position
Axis X
Competitive Advantage Industry strength
(Worst -6, Best -1) (Worst +6, Best +1)

Product Quality -2 Growth potential +2

Market Share -2 Entry of new firms +3

Brand Image -3 Access to Financing +2

Research and development -1 Competition pressure +5

Average Score = -2 Average Score = +3

Total X-Axis Score = +1.5
Financial Strength Environment Strength
(Worst +6, Best +1) (Worst -6, Best -1)
Axis y
ROI +2 Inflation -4

Leverage +3 Technology -1

Liquidity +3 Demand Elasticity -3

Cash Flow +2 Taxation -3

Average Score = +2.5 Average Score = -2.75

Total Y-Axis Score = -2.25
 +6.00

FS

Conservative Aggressive

-6.00
CA IS
+6.00

Competitive
Defensive

ES
-6.00
EFE - EXTERNAL FACTOR
EVALUATION MATRIX

External and internal assessment

 Factors Weight Rating Weighted
Score

Opportunities:
Top tier mrkt 0.15 4 0.6

Industrial grades 0.10 4 0.4

Pearl trucks plus in small packs of 4 and 10 ltrs 0.10 2 0.2

Company runs retail outlet chain 0.10 3 0.3

Threats:
MNCs increased focus over lube business 0.15 3 0.45

High quality imported lube oils at affordable prices 0.10 3 0.3

Counterfiet 0.10 1 0.1

Price hike 0.10 2 0.2

0.10 3 0.30
Reduced margin profit
1 2.85
TotalWeighted Score
 THE GRAND STRATEGY
MATRIX

External And Internal Assessment

 Rapid market
growth

Quadrant 2 Quadrant 1

Strong
competitive
Weak position
competitive
position

Quadrant 3 Quadrant 4

Slow market
growth
 External And Internal Matrix

External And Internal Assessment

 Internal Factor Evaluation Matrix
Sr. Strength Weight Rating W. Score
no
1 Country wide war houses 0.20 3 0.6
2 Big agents at major cities 0.25 4 1
3 Sales staff in potential mrkt hubs 0.15 4 0.6
4 Fake oils yet not available in case of 0.10 3 0.3
pearl lubricants
Weaknesses
5 Unattractive packaging 0.08 2 0.16
6 Short product line 0.05 2 0.05
7 No price control 0.04 3 0.12
8 No trade promos 0.04 2 0.08
9 Ground level mrkt shares 0.04 2 0.08
10 Weak mrkt pull 0.05 3 0.15
Total 1 3.14
 IFE Total weighted scores
Strong Average Weak
EFE Total weighted scores

3-4 2-2.9 1-1.9

High

3-4
Medium

2-2.9
Low

1-1.9

IFE 3.14, EFE 2.85 so its lies in quadrant 4

 Marketing Mix Of PARCO
Product Price Place promotion

Quality List Price Channel Advertising

Features Discount Location Personal

Selling
Brand Name Allowance Transportation Sales
Promotion
 Human Resource Management
 Diverse cultural backgrounds and multi-ethnic origins add up to

create a strong resource base at PARCO.

 Each member makes a valuable contribution while overall

functioning as a team. Committed to doing more for their country.

 PARCO people remain dedicated and passionate about their work.

PARCO people are focused on broadening horizons and meeting new

challenges.

 Creative and multi-talented, these fine individuals take pride in

shaping the future of Pakistan.

 OTHER STRATEGIES
 R & D:

 Procurement

 Production
 Research & Development

 Improving quality is continuous process at PARCO, for the

purpose a very active R & D department is functional.
 It was R & D department’s 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
 Human resource control
 In PARCO final hiring/firing authority relies with 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.
 Group analysis
Own assessment on PARCO
 Everything PARCO achieves is the product of team effort. All
PARCO employees share the achievements of the company and
have every reason to feel proud of what has been achieve so far.
However with the diversification in business activity , Parco meets
the new challenges , since success lies in better service and
consumer satisfaction.
 PARCO’s future aim is therefore to consolidate a significant
account presence, as a major contender in the petroleum sector of
Pakistan, with future that heralds bright prospects.
 There is need for proof any concept of 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 will also retain efficient workers with them
 STRATEGIC
ALTERNATIVES
 FUTURE PROSPECTIVES
 KCR (Khalifah Point Coastal Refinnery)
 Extension of Pipeline form Machike to Tarujaba
 Pearl LPG marketing company
 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 training of a
team for export of fuels.
PARCO should focus on these issues:

• Implement and improve training practices

• Improve employee satisfaction
• Improve pay/benefits
• Start Promotion Campaigns
• Improve the launch of the product
• Be competitive in pricing
• Implement a multi-source feedback system
Thank you