BW Real 500: Riding On Growth
The refining giant, Indian oil corporation (IOC), achieved many major milestones and now looks ahead at expansion plans
Photo Credit : Ritesh Sharma
Indian oil corporation (IOC) maintained its second position in the BW Real 500 list this year as well. Notably, the company has doubled profits in the financial year of 2015-16 in comparison with the previous year.
In the year 2015-16, IOC sold 80.722 million tonnes (MT) of products, including POL, gas, petrochemicals and explosives. Its refineries clocked a throughput of 56.2 MT with 103.7 per cent capacity utilisation and the cross-country network of pipelines registered the highest ever throughput of 79.8 MT in the year 2015-16.
The company registered the highest ever sales of petrochemicals at 2.538 MT in 2015-16 against 2.477 MT in the previous year. Sale of natural gas at 1.929 MT registered a growth of 6.9 per cent over the previous year.
In an exclusive conversation with BW Businessworld, IOC Chairman B. Ashok rated the previous year 8.5 on a scale of 10. He said, “The calendar year was pretty good. The company has had lots of accomplishments.”
Riding on the growth curve in infrastructure, manufacturing and services sectors resulting in enhanced POL consumption, IOC registered 13.5 per cent in MS (petrol) and 3.8 per cent growth in HSD (diesel) sales. In 2016, IOC also inaugurated Paradip Refinery, which was due for long. “It was on hold for a long time and now we are getting products out of it,” said Ashok.
The company completed its target of providing LPG to women below poverty line under Pradhan Mantri Ujjwala Yojana. The target is to get 50 million consumers in three years. “In December 2016, we have reached 15 million people and are targeting to benefit 20 million till March 2017. There has been 11 per cent growth rate in LPG and we have been able to sustain that,” said the IOC chairman.
In the current year 2017, the petroleum giant is looking to expand its horizon in different sectors such as natural gas, petrochemicals and new technologies. “The first challenge for 2017 would be to upgrade our quality of fuel production. From 1 April 2017, the entire country will switch to BS4 fuel quality. Currently, 50 per cent of the country is using BS3 fuel,” said, Ashok on the road ahead.
The company is focusing on building infrastructure and to meet the energy demand growth. The demand for energy is growing substantially and the country is moving towards a gas-based economy. “We have been focusing on building infrastructure for natural gas and there are huge projects going on for energy growth as well.”
The organisation has major plans to expand its fuel outlets. At present, there are 25,700 outlets of Indian Oil pan India. In the pipeline segment too, it is making huge investments. According to the plan, it will expand the pipeline network to 20,000 km from 12,000 km.
A huge amount of capital investment will happen in petroleum, refining petrochemicals, natural gas and pipelines sectors. But the major challenge of the company will be sustaining the current operations and meeting the increasing demand.
On expansion of pipeline, he said, “That is going to be a major challenge for the company while sustaining our current operations and meeting the increasing demand.”
Post demonetisation, the company has seen a tremendous increase in the cashless transactions. The company-owned stations witnessed 60 per cent cashless transaction. In the past one month, all India cashless transactions have increased from 10 per cent to 25 per cent.