BPCL plans major restructuring exercise

MUMBAI, November 21: In its efforts to gear up for the oil sector reforms by the year 2002, oil major Bharat Petroleum Corporation Ltd BPC...

MUMBAI, November 21: In its efforts to gear up for the oil sector reforms by the year 2002, oil major Bharat Petroleum Corporation Ltd BPCL has decided to undertake an intense restructuring of its operations beginning April next year. The plan includes merger of few divisons, creation of six strategic business units SBUs, and building a brand name for itself. The company has also postponed its plans to go public.

The oil company alongwith its management advisor, Arthur D Little, have already started implementing a plan to re-allocate responsibilities, inject accountability and redeploy its personnel to other refineries. The company has, however, ruled out any retrenchment of its existing employees.quot;The objective is to move away as a social service public sector company to a profit making company8230; we are gearing up for the dismantling of the administrative pricing mechanism APM,quot; said Mahesh B Lal, Director of the company.

Under the APM, all Indian oil companies are guaranteed a return of 12 per cent on its production. As per oil sector reforms plan cleared by the Cabinet last night, all oil companies would be freed from any pricing, thus triggering intense competition among the oil companies. By 1999, private sector oil refineries, Essar and Reliance will also start production thus bringing the oligopoly of oil companies to an end.

The BPCL restructuring plan code named, CUSECS customer service and customer satisfaction, will focus on consumers and build brand image.Said R C Bagchi, DGM in-charge of restructuring in its lone Chembur refinery: quot;We are creating team-based structures and may link the performance parametres with incentives. The idea is to identify our objectives five years from now and how to reach it.quot;

The six new SBUs are all retail products: lube, LPG, direct sales, aviation fuel, refinery and international trade. All the SBUs would be responsible for their indiviual group profitability and report to the board of directors. Divisons, which are common to all 8212; like human resources, industrial relations, information technology 8212; will remain outside the SBUs. Each SBU will identify the series of improvements, opportunities and implement it with the involvement of all people, according to Bagchi. The focus of each group would increase and they will be able to judge the changes in business environment, he adds. For its brand building exercise, BPCL will set up a separate group. Said M M Somayya, head of the brand image team: 8220;We are conducting a sample survey of our all customers, so that we can address their needs better. We want to know the expectations from the BPCL brand. As soon as we identify our customers, we will begin a campaign to create a brand image.8221;