Search the Internet          Tips  Sites: Finance, Investment

Indian Oil rules out closing down IBP retail outlets

BS Bureau

Indian Oil Corporation has ruled out the possibility of closing down any retail outlets of IBP which it has acquired by picking up a 33 per cent stake divested by the Union government in February.

"No IBP retail outlet would be shut down now. Both the brand, IOC and IBP, will co-exist and compete with each other for marketshare," said IOC chairman and managing director M S Ramachandran on Wednesday.

He was speaking after the extra-ordinary general meeting of IBP which ratified the shareholders' agreement between the Union government and IOC on the later's picking up a 33.58 per cent stake in IBP.

The chairman, however, mentioned that even though no retail outlets would be closed for now, every investment would now be scrutinised closely given the fact that competition would rise.

The dismantling of administered price mechanism has added to this pressure.

IBP's auto engine lubricant brands would continue as well. Pointing out that the acquisition by IOC would give product security to IBP which so far had no refinery support, Ramachandran said this would increase the competitive strength of IBP.

"In case of lube, availability of base oil would help IBP immensely," he noted.

"IOC would focus on strengthening IBP as a marketing company. Whatever infrastructure is available with IOC, they will be there for IBP as well. For instance, IBP would be benefited by the huge distribution facility of IOC that include 6,500 km of pipeline and fuel depots across the country," Ramachandran added.

The chairman further noted that IOC was not considering any proposal to merge IBP with itself, neither did it have any plans to shift the headquarters from Kolkata as of now.

On the poaching threat on retail outlets by other public sector undertakings or new entrants, he pointed out that this was likely to be disallowed by the government.

Powered by

ALSO READ:
The Rediff Budget Special
The Rediff-Business Standard Special
Money

Tell us what you think of this report