A

PROJECT REPORT
ON

PROJECT TITLE:

“EFFECT ON THE SALES OF INDIANOIL BITUMEN DUE TO IMPORT

IN WEST BENGAL”

PROJECT GUIDE: Mrs. GOURI BISWAS

Senior Manager (CS), WBSO

Submitted by

PRIYANKA MULLICK

PGPM 08 (2009-2011)

Reg No – 010108047

1
 INDEX:

S.NO TOPIC PAGE NO.

1. Acknowledgement 4

2. Declaration 5

3. Executive summary 6

4. COMPANY PROFILE: 7-19

 Vision & mission
 Objectives
 Financial objectives
 Products of IOCL

5. BITUMEN 20-28

6. PRODUCTION OF BITUMEN 29

7. INTRODUCTION: 30
 Need for the research
 Research problem
 Research objective
8. INSIGHT TO THE RESEARCH 31-32

9. RESEARCH PROCEDURE 33

10. Questionnaires 34-36

11. visits 37-39

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12. Import of bitumen 40-41

13. Pricing of IOCL bitumen 42-44

14. Price of imported bitumen 45

15. Factors influencing the buying 46

behavior of customers
16. Customer responses 47-48

17. Market share of IOCL in West 49-51

Bengal
18. Research findings 52

19. Analysis 53-54

20. Recommendations 55

21. conclusion 56

3
 ACKNOWLEDGEMENT:

Any task that is under taken reaches successful completion not only by an
individual’s effort but also by the guidance and support of many others. Here are
to acknowledge a few of those who have helped me to carry out this project work
successfully.

I express my deep gratitude to my project guide Mrs. GOURI BISWAS, Sr.

MANAGER (CS),WBSO, INDIANOIL CORPORATION LIMITED for giving me this
opportunity to undertake this project under her in this prestigious organization
and for her constant guidance, encouragement and support to the completion of
this project.

I would also like to thank entire marketing department for the invaluable help
and support extended during the project work.

Last but not the least; I am thankful to my faculty guides Mr.Avik Mukherjee and
Mr.Udayan Basu for being the source of inspiration and motivation to strive for
excellence.

PRIYANKA MULLICK

PGPM 08

GLOBSYN BUSINESS SCHOOL

KOLKATA

4
 DECLARATION:

This is to declare that the Report entitled “MARKET SURVEY OF IMPORTED

BITUMEN IN WEST BENGAL & IS EFFECT ON IOC” has been made for the
fulfillment of the Course: Summer Internship Program (SIP) by me at Indian Oil
Corporation Ltd. under the guidance of Mrs. Gouri Biswas, Senior Manager(CS).

I confirm that this Report truly represents my work undertaken as a part of my

Summer Internship Program (SIP). This work is not a replication of work done
previously by any other person. I also confirm that the contents of the report and
the views contained therein have been discussed and deliberated with my Faculty
Guide.

PRIYANKA MULLICK

5
 EXECUTIVE SUMMARY

 Title of the project “Study of the Effect on the sales of Indian Oil
Bitumen due to import in west Bengal” Itself suggests the gist of the
project.

 Indian Oil Corporation Limited is the flagship national oil company in the
downstream sector. Its objective is to maintain the highest market share
in all its product portfolios.

 So this project was assigned to me to contribute towards the goal of this

organization as well as this was a good exercise from my learning point
of view.

 The basic approach in this project is identifying what are the reasons for
decrease in the sale of IOCL bitumen market in West Bengal due to
import of bitumen by importers or customers themselves.

 To know the perception of the customer about the imported bitumen.

 By using such information we can analyze market conditions and can

make our policies to acquire highest market share.

6
 COMPANY PROFILE:

INDIANOIL CORPORATION LIMITED:

India’s Flagship National Oil Company

Incorporated as Indian Oil Company Ltd. on 30th June
1959, it was renamed as Indian Oil Corporation Ltd. on
1st September 1964 following the merger of Indian
Refineries Ltd. (established 1958) with it. Indian Oil and
its subsidiaries account for approximately 48%
petroleum products market share, 34% national refining
capacity and 71% downstream sector pipelines capacity
in India.

The Indian Oil Group of companies owns and operates 10 of India's 20 refineries
with a combined refining capacity of 60.2 million metric tonnes per annum
(MMTPA, .i.e. 1.2 million barrels per day). These include two refineries of
subsidiary Chennai Petroleum Corporation Ltd. 

The Corporation's cross-country network of crude oil and product pipelines,

spanning over 10,550 km and the largest in the country, meets the vital energy
needs of the consumers in an efficient, economical and environment-friendly
manner. 

IndianOil is currently investing Rs. 47000 crore in augmentation of refining and

pipeline capacities, expansion of marketing infrastructure and product quality up
gradation.

7
 
Network Beyond Compare

As the flagship national oil company in the downstream

sector, IndianOil touches millions of lives every day
through a countrywide network of over 35,600 sales
points. They are backed for supplies by 167 bulk storage
terminals and depots, 98 aviation fuel stations and 88
Indane (LPGas) bottling plants. Validating the trust of
56.8 million households, Indane earned the coveted
status of 'Superbrand' in 2009. About 7,593 bulk consumer pumps are also in
operation for the convenience of large consumers, ensuring products and
inventory at their doorstep.

IndianOil operates the largest and the widest network of petrol & diesel stations
in the country, numbering 18,643 including 2947 Kisan Seva Kendras (KSK) outlets
in the rural markets. Indane cooking gas is present in 2,764 markets through a
network of 5,095 Indane Distributors. 

IndianOil's ISO-9002 certified Aviation Service commands almost 63% market

share in aviation fuel business, meeting the fuel needs of domestic and
international flag carriers, private airlines and the Indian Defence Services. The
Corporation also enjoys 65% share of the bulk consumer business, including that
of railways, state transport undertakings and industrial, agricultural and marine
sectors.

Customer First
At IndianOil, customers always get the first priority. New initiatives are launched
round-the-year for the convenience of the various customer segments.

Exclusive XTRACARE petrol & diesel stations unveiled in select urban and semi-
urban markets offer a range of value-added services to enhance customer delight
and loyalty. Large format Swagat brand outlets cater to highway motorists, with
multiple facilities such as food courts, first aid, rest rooms and dormitories, spare
parts shops, etc. Specially formatted Kisan Seva Kendra outlets meet the diverse
needs of the rural populace, offering a variety of products and services such as
seeds, fertilizers, pesticides, farm equipment, medicines, spare parts for trucks
8
and tractors, solar lanterns, tractor engine oils and pump set oils, besides
auto fuels and kerosene. SERVOXpress has been launched as a one-stop shop for
auto care services.

To safeguard the interest of the valuable customers, interventions like retail

automation, vehicle tracking and marker systems have been introduced to ensure
quality and quantity of petroleum products.

Technology Solutions Provider

IndianOil's world-class R&D Centre is perhaps Asia's finest. Besides pioneering
work in lubricants formulation, refinery processes, pipeline transportation and
alternative fuels, the Centre is also the nodal agency of the Indian hydrocarbon
sector for ushering in Hydrogen fuel economy in the country. India’s first
commercial Hydrogen-CNG station is already in operation at an IndianOil retail
outlet in New Delhi. The Centre holds 215 active patents, including 109
international patents.

IndianOil is in the league of global technology providers with the deployment of

its in-house developed INDMAX technology (for maximizing LPG as yield) for the 4
MMTPA Fluidized Catalytic Cracking (FCC) unit at the Corporation's upcoming 15
MMTPA grassroots refinery at Paradip in Orissa, as well as for the FCC unit coming
up at Bongaigaon.

Some of the new in-house technologies and catalysts developed by IndianOil are
the Olivorus – S bio remediation technology (extended to marine applications
too), DHDS catalyst, a special Indicat catalyst for BS-IV compliant Diesel, IndVi
catalyst for improved distillate yield and FCC throughput, and adsorbent based
deep desulphurization process for gasoline and diesel streams. IndianOil has won
the prestigious Technology Day Award 2010 from the Govt. of India, for successful
development and commercialization of multifunctional additives for premium
grade diesel and lubricity additives for ultra low sulphur diesel.

Widening Horizons

9
To achieve the next level of growth, IndianOil is currently
forging ahead on a well laid-out road map through
vertical integration— upstream into oil exploration &
production (E&P) and downstream into petrochemicals –
and diversification into natural gas marketing, bio-fuels,
wind, solar and nuclear power projects, besides
globalisation of its downstream operations.

Petrochemicals
In petrochemicals, IndianOil is investing Rs. 20,000 crore (US$ 4 billion) by the
year 2011-12. Through the world’s largest single-train Linear Alkyl Benzene (LAB)
plant , with an annual capacity of 1,20,000 tonnes, set up at its Gujarat Refinery,
the Corporation has already captured a significant market share of LAB in India,
besides exporting the product to 15 countries. 

A world-scale Paraxylene/Purified Terephthalic Acid plant (annual capacities: PX -

3,63,000 tonnes, PTA – 5,53,000 tonnes) for polyester intermediates, and India’s
largest Naphtha Cracker with a capacity of 800,000 tonnes of ethylene per
annum, are in operation at Panipat. The Naphtha Cracker comprises four
downstream polymer units: Polypropylene (600 KTA), HDPE (300 KTA), LLDPE (350
KTA swing unit with HDPE) and MEG (325 KTA). It also produces Propylene,
Benzene, LPG, Pyrolysis fuel oil, etc. 

To strengthen its presence in the speciality petrochemicals sector, IndianOil is

setting up a state-of-the-art Styrene Butadiene Rubber (SBR) unit at Panipat with
an annual capacity of 120,000 tonnes. The high quality SBR is used to
manufacture automotive tyres, conveyors, fan belts etc. 

Exploration & Production

In E&P, IndianOil has non-operator participating interest in eight oil & gas blocks
awarded under various NELP (New Exploration Licensing Policy) rounds and two
Coal Bed Methane blocks in India, in consortium with other companies. In
addition, IndianOil has two onshore type ‘S’ NELP blocks, with 100% participating
interest (PI) and sole operatorship. 

The overseas E&P portfolio of IndianOil includes nine blocks - 86 and 102/4 blocks
in Sirte Basin and Areas 95/96 in Ghadames basin of Libya, Farsi Exploration Block

10
in Iran, onshore farm-in arrangements in one block in Gabon, one on land
block in Nigeria, one deepwater offshore block in Timor-Leste and two onshore
blocks in Yemen. 

In all, IndianOil has 12 domestic exploration blocks, including 2 blocks where gas
discoveries have been made and 9 overseas exploration blocks. Exploration
activities are at various stages of progress. In addition, as part of consortium,
IndianOil has been awarded Project -1 in the Carabobo heavy oil region of
Venezuela. IndianOil has also incorporated Ind-OIL Overseas Ltd. – a special
purpose vehicle for acquisition of overseas E&P assets – in Port Louis, Mauritius,
in consortium with Oil India Ltd. (OIL). 

Gas
Gas marketing is a thrust area for IndianOil with special focus on City Gas
Distribution (CGD) business. For this, IndianOil has tied up with several players
such as Adani Energy, Reliance Gas Corporation, OIL and ONGC, etc., to set up
joint ventures in various cities of India. The Corporation has also entered into
franchise agreements with CGD players such as Indraprastha Gas Ltd., Mahanagar
Gas Ltd., Adani Energy Limited, GEECL, SITI Energy and GSPC Gas Ltd. to market
CNG through its retail outlets. 

IndianOil’s joint venture – Green Gas – has been authorised to take up city gas
distribution at Agra. A long term gas supply agreement has been signed with
NTPC. 

A technology innovation is being harnessed to reach LNG (Liquefied Natural Gas)

directly to the doorstep of bulk consumers, in cryogenic containers for industrial
as well as captive power applications. 

Bio-fuels
To straddle the complete bio-fuel value chain, IndianOil has formed a joint
venture with the Chhattisgarh Renewable Development Authority (CREDA) with
an equity holding of 74% and 26% respectively. IndianOil CREDA Biofuels Ltd. has
been formed for carrying out farming, cultivating, manufacturing, production and
sale of biomass, bio-fuels and allied products and services.

IndianOil has the largest captive plantation for bio-fuel production in India – 1012

11
hectares – which is underway in Chattisgarh and Madhya Pradesh,
generating rural employment of over 1.4 lakh man-days. IndianOil has also
entered into a partnership with Ruchi Soya Industries Ltd., a leading manufacturer
of high quality edible oils, to establish a model value chain for the production of
bio-diesel in the state of Uttar Pradesh. 

A MoU for collaborating on commercial production of biodiesel from algae has

also been signed with PA LLC.

Other Diversification Initiatives

IndianOiI has forayed into wind energy business with the commissioning of a 21
MW wind power project in the Kutch district of Gujarat and the cumulative power
generation from the 14 wind turbine generators has crossed 6 crore units(KWHR)
since commissioning in January 2009. 

IndianOil has also launched Solar Lanterns in Orissa, Karnataka and NorthEastern
states and an all-India phased roll out is underway. Solar products like Solar
Lanterns and torches are being sold through our Kisan Seva Kendras and Retail
Outlets. 

IndianOil has signed a MoU with the Nuclear Power Corporation of India Ltd.
(NPCIL), for investing in the nuclear energy sector in the country. 

Globalisation Initiatives
IndianOil has set up subsidiaries in Sri Lanka, Mauritius and the United Arab
Emirates (UAE), and is simultaneously scouting for new business opportunities in
the energy markets of Asia and Africa.

Lanka IOC Plc (LIOC)

LIOC is ranked no. 1 among the island nation’s leading listed companies. It
operates about 150 petrol & diesel stations in Sri Lanka, and has a very efficient
lube marketing network. Its major facilities include an oil terminal at Trincomalee,
Sri Lanka's largest petroleum storage facility and an 18,000 tonnes per annum
capacity lubricants blending plant and state-of-the-art fuels and lubricants testing
laboratory at Trincomalee. Presently, it holds a market share of about 43.5%. In a
highly competitive bunker market, catering to all types of bunker fuels and
lubricants at all ports of Sri Lanka, viz., Colombo, Trincomalee and Galle. It is the

12
major supplier of lubricants and greases to the three arms of the Defence
services of Sri Lanka. I t holds 12.4% share of the market. It has also introduced
nitrogen filling facilities for automotive tyres, the first of its kind in Sri Lanka. 

IndianOil (Mauritius) Ltd. (IOML)

IndianOil (Mauritius) Ltd. is the third largest petroleum company in Mauritius and
holds an overall market share of 24% and commands a 42% market share in
aviation fuelling business, apart from its bunkering business. It operates a modern
petroleum bulk storage terminal at the Mer Rouge port, besides 17 filling stations.
In addition to the ongoing expansion of retail network, IOML has to its credit the
first ISO 9001-2008 product-testing laboratory in Mauritius.

IndianOil Middle-East FZE (IOME)

The Corporation's UAE subsidiary, IOC Middle East FZE, which oversees business
expansion in the Middle East, is mainly into blending and marketing of SERVO
lubricants and marketing of petroleum products in the Middle East, Africa and CIS
countries. It exports finished lubes to Oman, Yemen , Bahrain, UAE and Nepal . 

India Inspired
As a leading public sector enterprise of India, IndianOil has successfully combined
its corporate social responsibility agenda with its business offerings, meeting the
energy needs of millions of people everyday across the length and breadth of the
country, traversing a diversity of cultures, difficult terrains and harsh climatic
conditions. The Corporation takes pride in its continuous investments in
innovative technologies and solutions for sustainable energy flow and economic
growth and in developing techno-economically viable and environment-friendly
products & services for the benefit of its consumers.

IndianOil. The Energy of India

13
 VISION AND MISSION OF INDIANOIL:
VISION

A major diversified, trans-national, integrated energy company, with national

leadership and strong environment conscience, playing a national role in oil
security and public distribution.

MISSION

 To achieve international standards of excellence in all aspects of energy and

diversified business with focus on customer delight through value of
products and services, and cost reduction
 To maximize creation of wealth, values and satisfaction for the
stakeholders.
 To attain leadership in developing, adopting and assimilating state-of-the-
art technology for competitive advantage.
 To provide technology and service through sustained Research and
Development.
 To foster a culture of participation and innovation for employee growth and
contribution.
 To cultivate high standard of business ethics and Total Quality Management
for a strong corporate identity and brand equity.
 To help enrich the quality of life of the community and preserve ecological
balance and heritage through a strong environment conscience.
14
15
 OBJECTIVES:
 To serve the national interests in oil and related sectors in accordance and
consistent with Government policies.
 To ensure maintenance of continuous and smooth supplies of petroleum
products by way of crude oil refining, transportation and marketing
activities and to provide appropriate assistance to consumers to conserve
and use petroleum products efficiently.
 To enhance the country's self-sufficiency in crude oil refining and build
expertise in laying of crude oil and petroleum product pipelines.
 To further enhance marketing infrastructure and reseller network for
providing assured service to customers throughout the country.
 To create a strong research development base in refinery processes,
product formulations, pipeline transportation and alternative fuels with a
view to minimizing/eliminating imports and to have next generation
products.
 To optimize utilization of refining capacity and maximize distillate yield and
gross refining margin.
 To maximize utilization of the existing facilities for improving efficiency and
increasing productivity.
 To minimize fuel consumption and hydrocarbon loss in refineries and stock
loss in marketing operations to effect energy conservation.
 To earn a reasonable rate of return on investment.
 To avail of all viable opportunities, both national and global, arising out of
the Government of India’s policy of liberalization and reforms.
 To inculcate strong ‘core values’ among the employees and continuously
update skill sets for full exploitation of the new business opportunities.

16
 To develop operational synergies with subsidiaries and joint ventures
and continuously engage across the hydrocarbon value chain for the
benefit of society at large.

FINANCIAL OBJECTIVES:

 To ensure adequate return on the capital employed and maintain a

reasonable annual dividend on equity capital.
 To ensure maximum economy in expenditure.
 To manage and operate all facilities in an efficient manner so as to generate
adequate internal resources to meet revenue cost and requirements for
project investment, without budgetary support.
 To develop long-term corporate plans to provide for adequate growth of
the Corporation’s business.
 To reduce the cost of production of petroleum products by means of
systematic cost control measures and thereby sustain market leadership
through cost competitiveness.
 To complete all planned projects within the scheduled time and approved
cost.

17
 4 P’s of IOCL
PRODUCTS

 Petrol
 Diesel
 LPG
 Auto LPG
 Aviation turbine fuel
 Lubricants
 Naphtha
 Bitumen
 Paraffin
Kerosene

PRICE

 Price for all the products of all company is decided by petroleum

Ministry.
 Very less difference in price of all PSU’s

PLACE

 Located all over India.

 Maximum number of refineries.
 Only company having retail outlet outside India ( Sri Lanka)

PROMOTION

 Subhiksha: Two ZOOP noodles packet free on

purchase of Rs. 250/-
 Dominos: Rs. 50/- off on each midsize dominos pizza.
 PVR cinema: Rs 10/- off on eatables purchased
in PVR cinema.
 Rajdhani Thali: 10% off on each Rajdhani Thali.
 Yoko Sizzlers: 10% off in Yoko Sizzlers AC Restaurants.

18
 PRODUCTS OF IOCL:

IndianOil is not only the largest commercial enterprise in the country it is the
flagship corporate of the Indian Nation. Besides having a dominant market share,
IndianOil is widely recognized as India’s dominant energy brand and customers
perceive IndianOil as a reliable symbol for high quality products and services.

Benchmarking Quality, Quantity and Service to world-class standards is a

philosophy that IndianOil adheres to so as to ensure that customers get a truly
global experience in India. Its continued emphasis is on providing fuel
management solutions to customers who can then benefit from our expertise in
efficient sourcing and least cost supplies keeping in mind their usage patterns and
inventory management. 

IndianOil is a heritage and iconic brand at one level and a contemporary, global
brand at another level. While quality, reliability and service remains the core
benefits to its customers, its stringent checks are built into operating systems, at
every level ensuring the trust of over a billion Indians over the last four decades.

The Retail Brand template of XtraCare(Urban), Swagat(Highway) and Kisan Seva

Kendras(Rural) are widely recognized as pioneering brands in the petroleum retail
segment. IndianOil’s leadership extends to its energy brands - Indane LPG, SERVO
Lubricants, Autogas LPG, XtraPremium Branded Petrol, XtraMile Branded Diesel,
XtraPower Fleet Card, IndianOil Aviation and XtraRewards cash customer loyalty
programme.

19
 BITUMEN
Bitumen is a thermoplastic material and its stiffness is dependent on
temperature. The temperature versus stiffness relationship of bitumen is
dependent on source of crude and method of refining. Bureau of Indian Standards
(BIS) first time introduced paving grade Bitumen specification IS: 73-1950 based
on penetration. Based on classification the bitumen was classified into five
grades: S35, S435, S65, S90 & S-200.

BIS first revised the IS: 73-1950 specification in the year 1962 based on
penetration. In IS: 73-1961 specification only eight parameters were considered
for specifications.

BIS revised IS: 73-1961 specification in year 1992 for waxy and non waxy crude
based on penetration. In this revision, IS introduced four additional qualification
tests like penetration ratio, paraffin wax content, viscosity at 60 & 135 degree C
and retained penetration after thin film oven test. In case of non waxy crude one
additional grade S55 (50/60 penetration) was introduced. However, in case of
waxy crude only four grades A35, A55, A65, & A90 were specified.

To improve the quality of the bitumen, IS revised IS-73-1992 specification based

on viscosity grading (Viscosity at 60 Degree C) in July 2006.As per the specification
there are four grades VG-10,VG-20,VG-30 & VG-40.Few specification tests like
specific gravity, water content ,ductility ,loss of heating and Farass breaking point
were removed from IS:73-1992 specifications as these test do not have any
relationship either with the quality or performance of the bitumen.

20
INTRODUCTION OF VISCOCITY GRADE BITUMEN:

India has embarked upon massive and unprecedented road construction and
improvement programmes involving huge investments. It has also to maintain a
vast road network of over 33 lakh Km.The durability of the road surfaces depends
largely on the type and quality of the bitumen used and quality control exercised
in the production, transportation, mixing, laying and compaction.

Traditionally, we have been using Penetration Grade Bitumen in Bituminous

mixes. The bituminous surfacing was showing rutting at higher temperatures,
cracking at lower temperatures and raveling due to fatigue. The life of Bituminous
surfacing on National Highways varied from 3-4 years requiring frequent repairs
and renewals. To achieve durable pavements, use of modified bitumen was
introduced in late nineties. The cost Modified Bitumen is about 30-40 % higher
than the cost of bitumen as well as the construction of pavement with modified
bitumen requires higher levels of care & quality control during the entire process
right from production of modified Bitumen to laying and compaction. The latest
introduction is”Viscosity Grade Paving Bitumen” which is designed to take care of
the lowest temperature (responsible for cracking) and maximum temperature
(responsible for rutting).The BIS has issued IS 73 specification for this type of
Bitumen in July 2006.In view of the importance of Bitumen in road construction
and maintenance, it is necessary that appropriate grade of Bitumen most suited
for our environment are used and adequate quality control is exercised in each
stage.

21
THE NEED TO SHIFT FROM PENETRATION TO VISCOSITY GRADE, TO PAVING
BITUMEN

Penetration grade was developed in an era of significantly lower pavement

loading. In the past, truck weights were less than 30 tons with tyre measure of 75
PSI. Today truck weights exceed 35 tons with tyre pressure of 125 PSI. The 10%
increase in truck weights yield 40% increase in stresses applied to the pavement
and is further aggravated by heavy traffic and change in weather conditions.
Therefore, to cope up with the change in conditions, a need to shift from
penetration to viscosity grade paving bitumen has been felt. Both user agencies
and statutory bodies have shown keen interest in use of VG Bitumen.

VISCOSITY GRADING OF BITUMEN

Viscosity grade Bitumen is categorized according to viscosity (degree of fluidity)

grading. The higher the grade, the stiffer the Bitumen. In viscosity grade viscosity
tests are conducted at 60 C and 135 C, which represent the temperature of road
surface during summer (hot climate, similar to northern parts of India) and mixing
temperature respectively. The penetration at 25 C, which is annual average
pavement temperature, has been also retained in specification.

Grade Application
VG-10 BITUMEN Widely used in spraying such as surface
dressing and paving in very cold climate
in lieu of old 80/100 Penetration grade.
Also used to manufacture Bitumen
Emulsion and Modified Bitumen
Products.
VG-20 Bitumen Used for paving in cold climate & high
altitude regions.
VG-30 BITUMEN VG-30 is primarily used to construct
extra heavy duty Bitumen pavements
that need to endure substantial traffic
loads. It can be used in lieu of 60/70
penetration grade.
22
VG-40 BITUMEN Is used in highly stressed areas
such as
intersections, near tool booths and
truck parking lots in lieu of old 30/40
Penetration Grade. Due to its higher
Viscosity stiffer Bitumen Mixes can be
produced to improve resistance to
shoving and other problems associated
with higher temperature and heavy
traffic loads.
TABLE:

VISCOSITY GRADE (VG) BITUMEN SPECIFICATION AS PER IS 73:2006

CHARACTERISTICS VG-10 VG-20 VG-30 VG-40

Absolute Viscosity, 800 1600 2400 3200
60 0C ,poises, min
Kinematic Viscosity, 250 300 350 400
135 0C, CST, min
Flash Point, 0C. min 220 220 220 220
Solubility in 99.0 99.0 99.0 99.0
Trichloroethylene,%
, min
Penetration at 25 0C 80-100 60-80 50-70 40-60
Softening point, 0C, 40 45 47 50
min
TEST ON RESUDUE
FROM THIN FILM
OVER TEST/RTFOT

(Viscosity Ratio at 4 4 4 4
60 0C, max)
Ductility at 25 0C, 75 50 40 25
cm, min, after thin
film over test

23
DIFFERENCE BETWEEN PENETRATION AND VISCOSITY GRADE:

Penetration Grade classification based on the penetration value (degree of

hardness) (Test conditions:25 c, 100 gm, 5 secs) while VG system is based on
absolute Viscosity(degree of flow resistance) of the bitumen samples measured in
Poise (Test Conditions: @60 C, 300mm Hg vacuum) . It includes Kinematics
Viscosity measured in cst@135 C.

VG system is based on fundamental engineering parameter (not empirical)

Viscosity is measured at 60 C and 135 C, which takes care of both low and high
temperature susceptibility of the binder, which is not possible with the
penetration value @ 25 C. Hence, pavement engineers, contractors I consults can
have better understanding about the binder’s performance in the field. Any two
same viscosities Grade Bitumen would give similar rutting performance in hot
summer unlike penetration Grade. Greater ease of handling to customers, as
Viscosity Value at two different temperatures (@60 C and 135 C) is available,
which would enable users to measure accurate mining and compaction
temperatures. Minimum specified Kinematic Viscosity value @ 135 C helps to
minimize the potential of tender mixes during construction. Viscosity Grade
Bitumen are suitable for a wide range of temperature: 2 C for raveling fatigue
cracking, 60 C for rutting and 135 C for construction (mixing and compaction) IS
73-2006 has only & tests to evaluate a sample compared to 14 tests in
Penetration Grade Bitumen. This reduces time and cost of testing without
sacrificing its quality.

24
 BENEFITS OF VG BITUMEN

Bitumen is a common binder used in road construction. It is principally obtained

as a residual product in petroleum refineries after higher fractions like gas, petrol,
kerosene and diesel, etc., are removed. Indian Standard Institution defines
Bitumen as a black or dark brown non-crystalline soil or viscous material having
adhesive properties derived from petroleum crude either by natural or by refinery
processes.

IndianOil produces bitumen from its refineries at Panipat, Mathura, Koyali, Haldia
and Chennai and markets it in bulk as well as packed in steel drums. IndianOil also
markets modified Bitumen CRMB and Emulsion. CRMB is produced at Panipat,
Mathura, Koyali, Haldia and CPCL refineries. IndianOil markets Bitumen Emulsion
by the brand name Indemul and it is produced from emulsion plants located in
Haldia and Panipat refineries. CRMB and Emulsion are available both in bulk as
well as in packed drums. 

25
General uses of Bitumen:

For civil engineering works

 Constructions of roads, runways and platforms.

 Water proofing to prevent water seepage.
 Mastic floorings for factories and godowns.
 Canal lining to prevent erosion.
 Dump-proof courses for masonry.
 Tank foundation.
 Joint filling material for mason

Industries

 Electrical cables and junction boxes.

 In battery manufacture as sealing compound.
 Paint industries for manufacturing black paints and anti corrosive paints.
 Ceramics.
 Printing inks.
 Water proof papers.
 Electrical capacitors.
 Bituminous felts.

26
 TYPES OF BITUMEN MANUFACTURED BY IOCL

VG-10: It is manufactured by IOCL. its absolute viscosity at 60C is 800, its

kinematic viscosity at 135C is 250, its flash point is 220C, it is soluble in
tricholorothene is 99% its penetration at 25C is 80-100 and its softening point is
40C. VG-10 is widely used in spraying applications such as surface dressing and
paving in very cold climate in lieu of old 80/100 Penetration grade. It is also used
to manufacture Bitumen Emulsion and Modified Bitumen products.

VG-30: another type of bitumen manufactured by IOCL. its absolute viscosity at

60C is 2400, its kinematic viscosity at 135C is 350, its flash point is 220C, it is
soluble in tricholorothene is 99% its penetration at 25C is 50-70 and its softening
point is 47C. VG-30 is primarily used to construct extra heavy duty Bitumen

Pavements that need to endure substantial traffic loads. It can be used in lieu of
60/70 Penetration grade.

CRUMB RUBBER MODIFIED BITUMEN(CRMB): It is basically a combination of

bitumen with penetration grade of 80/100 and Crumb rubber modifier. IOCL
manufactures CRMB in three grades they are CRMB-50, CRMB-55, and CRMB-60.
It reduces rutting.

Life of pavements reduces noise pollution, it has better anti-tripping property, it

shows more stiffness. It is available in bulk and packed from IOCL.

EMULSION: An emulsion prepared by homogenizing two pure immiscible

components will rapidly result in phase separation. To prepare stable emulsion,
an emulsifier must be added that facilitate emulsification of two immiscible
phases and promotes stability. Bitumen emulsion is a liquid product in which
bitumen is suspended in a finely divided condition in an aqueous medium and
27
stabilizes by suitable material. Emulsion is applied on the road it breaks
down resulting in release of water and the mix start to set. It is mainly used for hill
road construction, where heating of bitumen is difficult. Rapid setting emulsions
are used for surface dressing work.

Marketing of Bituminous Products:

Bitumen:
IndianOil markets Bitumen from its Refineries located at Koyali(Gujarat),
Mathura(UP), Panipat(Haryana), Barauni(Bihar), Haldia(WB) and CPCL(Tamil
Nadu). Bitumen is available from these locations both in bulk as well as in packed
drums. In addition to the refinery locations, packed bitumen is also marketed
from upcountry locations Jamshedpur (Jharkhand), Bokaro (Jharkhand), Guwahati
(Assam), Haldwani (UP), Balasore (Orissa), Coimbatore and Madurai (Tamil
Nadu). 

CRMB:

CRMB is available from the refinery locations at Koyali, Mathura, Panipat, Barauni,
Haldia and Chennai. The product is available both in bulk as well as packed
drums. 

Emulsion:

Emulsion is available from Haldia and Panipat refineries. IndianOil is shortly

setting up new Emulsion plants at Chennai, Koyali and Mathura refineries.

PMB:
IndianOil is setting up a Polymer Modified Bitumen plant at Koyali Refinery. The
plant is expected to be ready by the end of 2010.

PRODUCTION OF BITUMEN:

28
Bitumen is produced by refining crude oil by fractional distillation. The
crude oil is pumped from storage tanks, where it is kept at about 60°C, through a
heat exchanger system where its temperature is increased to typically 200°C by
exchanging heat gained from the cooling of newly produced products in the
refining process. The crude is then further heated in a furnace to typically 300° C
where it is partly vapourised before entering an Atmospheric Distillation Column.
Here the physical separation of the components occurs. The lighter components
rise to the top and the heaviest components fall to the bottom of the column. The
material from the bottom then enters a Vacuum Distillation Column via another
heat exchanger. Here is where the bitumen is produced. Vacuum distillation helps
to maintain the inherently high binding characteristics of crude, due to the lower
operating temperatures.

INTRODUCTION:
Need for the research:
29
Earlier Indian oil had 100% market share in bitumen in West Bengal. Since
2007 the market share started gradually decreasing due to import of bitumen
which started from October 2007. The road contractors and processors who were
dependant only on IOCL bitumen few years back have now started buying
imported bitumen. As a result the sales quantity has decreased over the past few
years. Though the decrease is negligible but still it has become a major concern
for IOC to regain its market share.

Research Problem:

The research problem was to analyze the reasons for gradual decrease of market
share and decreasing sales quantity of bitumen. For this analysis to be carried out,
we have to work on the various factors which are affecting the buying behavior of
bitumen of road contractors and processors.

Research objectives:

 To understand the grading and various uses of bitumen.

 To understand the bitumen market of IOCL in west Bengal by visiting its
customers and to have a rough idea about the annual demand of bitumen
in west Bengal.
 To visit Kolkata and Haldia port to collect the information about quantity of
bitumen imported in last few years.
 To identify major importers of bitumen and collect information about price,
quality, availability and customers of imported bitumen.
 To analyze the data and provide recommendation to IOCL in order to regain
its market share.

An Insight into the Research

30
Scope of the study:

The research work will be totally concentrated inside the Kolkata region. The
Research work will cover the respondents from the customers of IOCL’s VG
bitumen i.e. both road contractors and processors of VG bitumen, and Kolkata
based importers of bitumen.

Research Methodology:

This research work is done to first find out the factors which affect the buying
decision of Bitumen of customers & secondly on the basis of survey analysis,
formulate recommendations to improve sales of bitumen of IOCL.

Type of research:

The research work conducted is exploratory & descriptive in nature. This research
work is used to investigate the factors which are affecting the buying decision of
bitumen & marking perception of customers about imported bitumen available in
market. It is an exploratory and descriptive research, as it has both the secondary
data and surveys.

Sources and tools of data collection:

a) Primary Data

The data was to be gathered through a survey based research approach with the
help of questionnaire.

b) Secondary Data

The source of secondary data was the articles on bitumen mentioned on the
internet. The sources of all the sites are mentioned in bibliography in this report.

Sampling Techniques

31
Comparing this years and previous year’s purchased quantity of bitumen of
IOCL customers, I made a list of customers whose purchase quantity of bitumen
have decreased than that of the previous year. From that list I randomly selected
some Kolkata based customers of IOCL both road contractors and processors.

Sample Size

There were 2 types of questionnaires which were formulated to carry out this
research work. The sample sizes for each type of questionnaire are as follows:-

1. Customers: a)road contractors: 15

b)processors: 5

2. Importers: 2

Limitation of the Research

There were few limitations in this research work. Due to limited time span it was
not possible to visit all customers of west Bengal. Whereas,to get more concrete
results it was necessary to increase the sample size.

Research procedure:

32
The project title was “effect of sales of bitumen of IOCL due to import of
bitumen”. Since no prior data was available about the imported bitumen market
as well as the effect of sales of IOCL due to import,so it was necessary to
understand the bitumen market of west Bengal and total potential of bitumen by
visiting both customers and importers .The research process is divided into two
phases:

Phase 1:

Phase 1 was the starting point of research work & its duration was about 2 weeks.
Before going out for primary research work, I studied the bitumen market with
the help of internet & collected some useful insight about the industry. In the
primary research work, I first of all decided on the different category of persons
who are linked with the usage of bitumen ie the customers of bitumen. They are
divided in 2 categories; road contractors who directly use the purchased bitumen
for construction purposes and Processors of bitumen, who process the purchased
bitumen into various products such as paints, Cationic Bitumen emulsion
Modified Bitumen, water proofing agents also used for construction purpose.

I collected the address and contact details of west Bengal based bitumen
customers of IOCL and compared their previous year purchased quantity with the
current year. The ones whose purchase quantities have decreased were
shortlisted. I visited Kolkata and Haldia port to collect the contact details of
importers.

Phase 2:

I visited the customers with a questionnaire to conduct an exploratory survey to

find out the reason for which their purchase quantities have decreased. This
helped me to point out the factors which are most important in influencing the
buying behavior of the customers and thus help me in analysis to provide
recommendations to the company.

A separate questionnaire was made for the importers.

The sample questionnaires are as follows:

33
 Questionnaire for bitumen customers:
1. Who are the suppliers of bitumen to your company?

----------------------------------------------------------------------------------------------------------

2. What are the grades of bitumen your company deals with?

----------------------------------------------------------------------------------------------------------

3. What are end uses of bitumen of your company?

----------------------------------------------------------------------------------------------------------

4. Are the end uses of bitumen same for the last 2 years?

----------------------------------------------------------------------------------------------------------

5. Do you import bitumen or buy imported bitumen?

----------------------------------------------------------------------------------------------------------

6. Buying price of imported bitumen (if any)?

----------------------------------------------------------------------------------------------------------

7. Buying price of IOCL bitumen?

-----------------------------------------------------------------------------------------------------------

8. What is the payment mode/facility provided by the suppliers other than IOCL?

------------------------------------------------------------------------------------------------------------

9. Annual demand of bitumen of your company

2008:-----------------------

2009:-----------------------

2010:-----------------------

34
10. What is the price to quality rating you want to give to IOCL bitumen?

Excellent good neutral satisfactory bad

2008 ----------- ------- ----------- -------------- ------

2009 ----------- ------- ----------- -------------- ------

2010 ----------- ------- ----------- -------------- ------

11. What factors you consider before buying bitumen?

------------------------------------------------------------------------------------------------------

12. Any recommendations you want to give to IOCL for improvement?

-------------------------------------------------------------------------------------------------------

35
 Questionnaires for importers of bitumen:

1. Since when your company has started importing bitumen?

--------------------------------------------------------------------------------------------------------

2. From where your company imports bitumen?

3. Quantity of bitumen imported in recent years?

---------------------------------------------------------------------------------------------------------

4. What type of customers are your bulk buyers?

--------------------------------------------------------------------------------------------------------

5. What is the selling price of bitumen to customers excluding VAT, excise duty
and transportation cost?

---------------------------------------------------------------------------------------------------------

6. What are the payment modes and facilities (if any) you provide to customers?

----------------------------------------------------------------------------------------------------------

VISITS:

36
 Below is the list of customers whom I visited for the research purpose with
the questionnaire. The reason for short listing them is due to their decreased
purchased quantity of bitumen than the previous year.

SL.NO NAME ADDRESS SALE QUANTITY

2008-09 2009-10
(MTS) (MTS)
1 JALNIDHI BITUMEN 130, Cotton Street,Kolkata-7 4539.5 4465.2
SPLTS.P LTD
2 DILIP KUMAR CHATTERJEE 158,Lenin Sarani,kol-30 298.52 86.17

3 MASCOT INDUSTRIES 56,N.S Bose Road Kol-1 352.22 221.48

4 SHIVAM PETRO 34A Metcafe St,Room No- 188.56 184.26
PRODUCTS PVT.LTD 7C,Jain Centre Kol-30.
5 UNIVERSAL BITUMENOUS 12 BBD Bag(E),Kolkata-1 944.4 1499.97
INDUSTRIES
6 UNITED TAR PRODUCTS(P) 40/1 Strand road Kolkata-1 731.7 25.99
LTD
7 VAISNO CONSTRUCTION P 74,Ramswarup Khetri Road 376.47 291.21
Kol-53
8 PROTEK SOLUTION Millenium City-B.E ,Tower -2 IT 187.95 56.38
PRIVATE LTD. Park,DN-62 Sec 5 Salt Lake-91
9 DAGCON(INDIA) PVT.LTD 167,Anandapur,Rajdanga Main 61.49 0
Road Kol-107
10 DRA INFOCOM PVT LTD. 44,Shantipaly Kol-107 121 10
11 ALLIED BITUMEN 98,B.K Pal Avenue Kol-5 351.2 14.58
COMPLEX(INDIA)
12 ADHUNIK INFRA Kamalalaya Centre 156, Lenin 460.25 0
STRUCTURE (P) LTD. Sarani Kol-13
13 HINDUSTAN TAR Nimtala Ghat Street Kolkata 432.64 0
PRODUCTS -06
14 HARIHAR INDUSTRIES Jalan 214.23 0
Complex,Bipramapara,Howrah
Post-Begri
15 BENGAL CONSTRUCTION 6th Floor Sarat Bose Road Lala 479.06 0
CO. Lajpat Rai Sarani

37
 Kolkata -700020
16 VANEETA PETROCHEM N.H 2 Delhi 63.53 0
Road,Jaganathpur,Dankuni
17 SIMPLEX 27,Shakesphere Sarani,Park 162.84 19.75
INFRASTRUCTURE Circus Kol-12
18 DINESH CHANDRA 158,Lenin Sarani,Kol-30 28.43 0
AGRAWAL
19 CALCUTTA FELT 39,Hazra Road, Kolkata-34 216.12 16.57
INDUSTRIES
20 ASIANOL LUBRICANTS LTD 7B Pretoria Street Kolkata-71 49.28 29.01

38
 List of importers visited are:

SL.NO NAME ADDRESS GRADES

MAX.IMPORTED
AND PRICE
1 VINERGY INTERNATIONAL 33/1 N.S ROAD, MAX IMPORTS
MARSHALL VG 10 GRADE
NAME OF RESPONDENTS- HOUSE,9TH FLOOR PRICE-Rs 32, 474
PUNIT GARG ROOM NO 932 DATED-26/05/2010
(INC TAX AND VAT)
500MT/MONTH
330 BULK & 170
PACKED
2 HIMADRI CHEMICALS PVT LTD 23A N.S ROAD 8TH MAX IMPORTS
NAME OF THE RESPONDENT- FLOOR KOLKATA-1 VG-10 GRADE
A.K SINHA PRICE-32,556
DATED-26/05/2010
300-500—MT/MONTH

39
 IMPORT OF BITUMEN:
Import of bitumen started at Haldia port from October 2007.

In the year 2007-08 the total import was 14,200 MT of bitumen.

Below is the import data of bitumen from Haldia port:

2008-09
Sl.
No
. VESSEL'S NAME C/Work   ORIGIN  
02-06-08
1 JANESIA ASPHALT-V SINGAPORE VINERGY INTERNATIONAL
15:25 5,204
13-09-08
2 JIANG ZHOU SINGAPORE VINERGY INTERNATIONAL
04:45 3,926
22-10-08
3 ALFATEM TURKEY HIMADRI CHEMICALS
03:45 6,026
09-02-09
4 JANESIA ASPHALT-V SINGAPORE VINERGY INTERNATIONAL
20:06 5,182
21-03-09 VINERGY INTERNATIONAL-
5 JIANG ZHOU SINGAPORE
05:30 3,994 3990/PEC LTD.-4.09

24,332
2009-10
Sl.
No
. VESSEL'S NAME C/Work   ORIGIN  
06-04-09
1 JIANG ZHOU SINGAPORE VINERGY INT. PVT. LTD.
04:35 4,002
13-05-09
2 JIANG ZHOU SINGAPORE PEC LTD.
04:00 3,961
15-06-09
3 JIANG ZHOU SINGAPORE PEC LTD.
02:00 3,904
24-10-09
5 DA WEL SHAN NANJING PEC LTD.
06:00 5,176
08-01-10
6 DA WEL SHAN CHINA VINERGY INT. PVT. LTD.
23:00 4,957
28-01-10
7 XING HAI WAN KEMAMAN PEC LTD.
14:30 4,110
26-02-10
8 TASCO-I MALAYSIA PEC LTD.
16:55 3,882
2
  TOTAL      
9,992

40
Comparing the above data we see that the import quantity has gradually
increased in the past three years. It has been graphically represented as follows:

30000

25000

20000

15000

10000

5000

0
2007-08 2008-09 2009-10

Among the importers Vinergy International Pvt ltd. imports the maximum
quantity of bitumen in West Bengal. Most of the customers I visited were buying
imported bitumen from Vinergy.

41
PRICING OF BITUMEN OF IOCL:

IOCL changes the price of bitumen after 15 days. Which indicates it comes with a
new price list in the market after every 15 days of a month. So the price of
bitumen change twice a month and 24 times during a financial year.

The main reason behind the change in price after every 15 days is that, the basic
price of bitumen is based on import parity price of packed bitumen source EX
IRAN. The free on board price of IRAN drum is taken from the International Argus
Asphalt Report. The report is published fortnightly and therefore every fortnight
packed bitumen price is worked out based on import parity mechanism. The price
of bulk bitumen is worked out from the price of packed bitumen by subtracting
the cost of bitumen drum.

Ex-Refinery prices exclusive of taxes (Rs./Metric tonne)

Applicable from: April 16, 2010

BITUMEN GRADES
  VG-10 VG-30 VG-40
PORT REF(Mumbai/Mangalore/Kochi) 26090 26890 28230
KOYALI 26090 26890 28230
MATHURA 27290 28090 29430
PANIPAT 27590 28390 29730
PORT REF (Haldia/Vizag/Chennai) 26190 26990 28330
BARAUNI 27220 28020  
BITUMEN (PACKED)
PORT REF(Mumbai/Mangalore/Kochi) 29090 29890 31230
KOYALI 29090 29890 31230
MATHURA 30290 31090 32430
PANIPAT 30590 31390 32730
PORT REF (Haldia/Vizag/Chennai) 29190 29990 31330

42
 PRICING OF IOCL BITUMEN DATED (15/5/2010):

Handlin Packin E.D. E.D.

PRODUCT SOURCE BASIC g Bulk g Tran % QTM EDU TOTAL
    PRICE Charge Bitumen Charge Value     CESS  
    (RS)   Trans       (RS) 3% (RS)
                     
BITUMEN 80/100/VG- 29590.0
10 PACKED HALDIA 29490.00 100.00 0.00 0.00 0 14% 4142.60 124.28 33856.88
-DO- FOR BHUTAN & 29590.0
NEPAL 29490.00 100.00 0.00 0.00 0 14% 4142.60 124.28 33856.88
BITUMEN 80/100/VG- GUWAHAT 31440.0
10 PACKED I 31240.00 200.00 0.00 0.00 0 14% 4401.60 132.05 35973.65
BITUMEN 80/100/VG- 30140.0
10 PACKED ULUBERIA 29490.00 0.00 450.00 200.00 0 14% 4219.60 126.59 34486.19
DO- FOR BHUTAN & 30140.0
NEPAL ULUBERIA 29490.00 0.00 450.00 200.00 0 14% 4219.60 126.59 34486.19
BITUMEN 80/100/VG- 26490.0
10 BULK HALDIA 26490.00 0.00 0.00 0.00 0 14% 3708.60 111.26 30309.86
-DO- FOR BHUTAN & 26490.0
NEPAL HALDIA 26490.00 0.00 0.00 0.00 0 14% 3708.60 111.26 30309.86
BITUMEN 60/70/VG-30 30390.0
PACKED HALDIA 30290.00 100.00 0.00 0.00 0 14% 4254.60 127.64 34772.24
-DO- FOR BHUTAN & 30390.0
NEPAL HALDIA 30290.00 100.00 0.00 0.00 0 14% 4254.60 127.64 34772.24
BITUMEN 60/70/VG-30 GUWAHAT 32240.0
PACKED I 32040.00 200.00 0.00 0.00 0 14% 4513.60 135.41 36889.01
BITUMEN 60/70/VG-30 30940.0
PACKED ULUBERIA 30290.00 0.00 450.00 200.00 0 14% 4331.60 129.95 35401.55
DO- FOR BHUTAN & 30940.0
NEPAL ULUBERIA 30290.00 0.00 450.00 200.00 0 14% 4331.60 129.95 35401.55
BITUMEN 60/70/VG-30 27290.0
BULK HALDIA 27290.00 0.00 0.00 0.00 0 14% 3820.60 114.62 31225.22
-DO- FOR BHUTAN & 27290.0
NEPAL HALDIA 27290.00 0.00 0.00 0.00 0 14% 3820.60 114.62 31225.22
BITUMEN 30/40/VG-40 31780.0
PACKED HALDIA 31680.00 100.00 0.00 0.00 0 14% 4449.20 133.48 36362.68
-DO- FOR BHUTAN & 31780.0
NEPAL HALDIA 31680.00 100.00 0.00 0.00 0 14% 4449.20 133.48 36362.68
BITUMEN 30/40/VG-40 GUWAHAT 33630.0
PACKED I 33430.00 200.00 0.00 0.00 0 14% 4708.20 141.25 38479.45
BITUMEN 30/40/VG-40 32330.0
PACKED ULUBERIA 31680.00 0.00 450.00 200.00 0 14% 4526.20 135.79 36991.99
-DO- FOR BHUTAN & 32330.0
NEPAL ULUBERIA 31680.00 0.00 450.00 200.00 0 14% 4526.20 135.79 36991.99
BITUMEN 30/40/VG-40 28680.0
BULK HALDIA 28680.00 0.00 0.00 0.00 0 14% 4015.20 120.46 32815.66
-DO- FOR BHUTAN & 28680.0
NEPAL HALDIA 28680.00 0.00 0.00 0.00 0 14% 4015.20 120.46 32815.66
BITUMEN 80/100/VG- 27520.0
10 BULK BARAUNI 27520.00 0.00 0.00 0.00 0 14% 3852.80 115.58 31488.38
BITUMEN 60/70/VG-30 28320.0
BULK BARAUNI 28320.00 0.00 0.00 0.00 0 14% 3964.80 118.94 32403.74

43
In West Bengal refining of crude oil is done at Haldia refinery. The basic price is
the price of bitumen at Haldia refinery at the time of production. Bitumen
produced there is then transported in bulk to Uluberia for packaging. The
transportation cost of Rs.450 and packing charge of Rs.200 is added here with the
basic price of bitumen per MT.
Duties on bitumen:
Excise duty: 14% on basic price
EDU Cess : 3% on excise duty
Local tax(VAT): 4%

44
PRICE OF IMPORTED BITUMEN:
I visited vinergy international and himadri chemicals who are the major importers
in west Bengal. They import bitumen mainly from china,Singapore,turkey and
middle east countries.
Though there are special duties on imported bitumen still they provide bitumen
to the customers at a lower price than that of IOCL. This is because the
international price of crude oil keeps on fluctuating. When the price is low they
order bitumen in large quantities. Vinergy international has storage tanks for
bitumen. So they can provide customers the required quantity of bitumen at a
faster rate and at a lower price than that of IOCL.
The special duties on imported bitumen are:
Customs basic duty: 5%
Additional duty: 8%
Special additional duty: 4%
Excise cess: 3%
Customs cess: 3%

Payment mode/facility provided by the importers:

The importers provide bitumen to customers on credit.
According to Mr. Sunil Singhal of DRA Infracon Pvt Ltd.,one of the customers of
IOCL,the importers give discount of Rs. 1800 per MT of bitumen than the price of
IOCL.

45
FACTORS INFLUENCING THE BUYING BEHAVIOR OF BITUMEN CUSTOMERS:
From the interview of the customers it was found that there are 4 factors which
play the most important role in influencing the buying behavior of customers:
 Price
 Availability
 Quality
 Service
Most of the customers were satisfied with the quality of bitumen of IOCL. But still
they opted imported bitumen because of poor service of IOCL. IOCL cannot
provide the customers with required quantity of bitumen on time, due to its huge
customer base. So customers buy imported bitumen when there is shortage or
immediate requirement.
Price also plays an important factor. Since the importers provide bitumen on
credit and also on discounts as mentioned earlier, so some IOCL customers have
started buying large quantities of bitumen from them.
A no. of formalities have to be fulfilled while ordering bitumen from IOCL, like
photo ID proof, address proof, demand draft etc, which is a long procedure.
Also due to its huge customer base IOCL cannot give attention to its individual
customer demands.
Some customers have no new projects in hand so the quantity purchased have
decreased than the previous year.

46
 Customer responses:
Below is the rank-wise rating of the above 4 factors by the customers as deduced
from their responses

Customers price availability quality service Suggestion to IOCL

Jalnidhi bitumen 3 1 4 2 Service should be

splts.p ltd improved

Dilip kumar 4 1 3 2 Increase availability

chatterjee

Mascot industries 3 2 4 1 Service should be

improved

United tar 3 1 4 2 Increase availability

products(p) ltd

Dagcon(India) 2 1 4 3 Increase
pvt.ltd availability,discounts
should be given

DRA infracon pvt 1 2 4 3 Discounts,allow

ltd. credits;improvement
of service,customers
relation should be
given importance

Calcutta felt 3 1 4 2 Increase availability

industries

Allied bitumen 2 1 4 3 Increase availability

complex(India)

Simplex 1 2 4 3 Discounts should be

infrastructure given,improve service

Vaneetapetroche 3 2 4 1 Service should be

m improved

47
From the above rating it is seen that availability plays the most important
factor for the buying decision of bitumen. Service also plays an important factor.
It has been represented in the following diagram:

0
availability service price quality

Some customers complained that the time between the placement of order and
delivery is too long. Sometimes it is almost as long as 2 weeks, so they go for
imported bitumen whenever there is shortage or immediate requirement.
Some customers are also importing bitumen as according to them the quality is
almost the same, but the cost of importing bitumen is lower than that of IOCL.
Few such customers are:
 Dagcon India pvt ltd.
 Jalnidhi bitumen
As far as quality is concerned most of the customers accepted the fact that quality
of Indian Oil bitumen is much better than that of imported bitumen. So the main
concern of IOCL is to increase the availability of bitumen and improve the service.

48
Sale of IOCL bitumen in the Eastern region:

2009-10
 
STATES BULK PACKED TOTAL

WBSO 82285 61752 144037

ORISSA 28834 10591 39425
BIHAR+JHARKHAND 91992 130324 222316
NESO 19515 60105 79620
TOTAL 222626 262772 485398

2008-09
STATES BULK PACKED TOTAL

WBSO 76374 67605 143984

ORISSA 13778 15126 28904
BIHAR+JHARKHAND 83414 143169 226583
NESO 17966 74536 92502
TOTAL 191537 300436 491973

Growth percentage of bitumen sales in West Bengal

= (144037-143984)/143984*100=0.03%

So we see that the growth rate in west Bengal is somewhat flat though the
number of bitumen customers has increased than that of previous years.

49
MARKET SHARE OF IOCL IN EASTERN REGION IN 2009-10:

iocl
import

MARKET SHARE OF IOCL IN EASTERN REGION IN 2008-09:

iocl
import

50
From the above pie-charts we see that within 3 years, the imported
bitumen have already captured 6% of market share in eastern region, and every
year the quantity of imported bitumen is increasing.
So it has become a major concern for IOCL to regain its market share in bitumen
industry.

51
 RESEARCH FINDINGS:

 Service and availability play the most important factor for making buying
decision of bitumen as quality wise there isn’t much difference between
IOCL and imported bitumen.
 60% of the customers of IOCL interviewed were buying imported bitumen
due to poor service of IOCL, as IOCL cannot provide the quantity of bitumen
as and when required by the customers. Also their individual demands
were not given attention by IOCL.
 Some customers were importing bitumen for self use as well as buying
bitumen from IOCL.
 10% of the customers were buying imported bitumen due to price
flexibility, as the importers give discounts to the customers as well as
provide the goods on credit in some cases.
 Others did not have new projects in hand at present so their purchase
quantity of bitumen from IOCL has decreased.
 Some customers said it takes a long time to fulfill the formalities of IOCL
before placing an order, so whenever there is immediate requirement they
go for imported bitumen which involves a much shorter process.

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 ANALYSIS:

PRICE:
Comparing the prices of IOCL bitumen and imported bitumen we see that in spite
of the import duty the price of imported bitumen is less than that of IOCL
bitumen.
For eg.- the price per MT of VG 10 bitumen of Vinergy international is Rs 32, 474
And that of Himadri chemicals is Rs. 32,556 (26/5/2010).

The price per MT of VG 10 bitumen of IOCL at Haldia is Rs 33,856 and at Uluberia

is Rs. 34486.19 (15/5/2010).

Besides the importers also provide discounts to customers on the purchase of a

certain quantity of bitumen. Credits are also provided to attract more customers.
On the other hand, payments have to be made in demand drafts while placing an
order in IOCL.

AVAILABILITY:

The most important factor affecting the buying behavior of customers is

availability. Although price of the imported bitumen is less, but still Indian Oil has
loyal customers who would always prefer IOCL bitumen over others. Some
customers have accepted the fact that presently they are buying imported
bitumen because of unavailability.

Bitumen is obtained from the fractional distillation of crude oil which is limited.
Also IOCL has other products to concentrate upon which are obtained as
byproducts of crude oil. So whenever bitumen is unavailable or there is shortage
at IOCL, they go for imported bitumen, though very small quantity.

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SERVICE:

Some customers complained that IOCL has poor service, as the goods ordered
were not delivered on time. Besides, the time between placement of order and
delivery is longer as compared to that of importers. Also it is a long process as
they have to fulfill certain formalities as mentioned earlier. So whenever there is
emergency or shortage they buy imported bitumen. The importers have storage
tanks for bitumen, so whenever an order is placed they deliver them immediately.
Also they don’t have huge customer base like that of IOCL, so can give attention
to their customers’ individual demands and thus have maintained a good
customer relation.

QUALITY:

From the interviews of the customers it can be said that quality wise there isn’t a
much difference. Except one, majority customers said that IOCL bitumen quality is
better than that of imported.

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 RECOMMENDATIONS:

From the above analysis the followings can be recommended in order to

regain the market share of bitumen:

 Customer relation should be improved. Though IOCL has huge customer

base still individual demands should be given importance to some extent.
 Service should be improved. IOCL should try to provide the customers
the quantity ordered on time.
 Discounts can be given occasionally or on the purchase of a certain
quantity of bitumen. This will attract more new customers.
 Credits can be provided to some extent based on volume purchased and
the loyalty of the customers.
 IOCL must reduce its refinery cost and capital expenditure on bitumen to
make it cost effective by passing it on the other refinery product. Hence
it will be able to supply the product at a lesser price compared to its
competitor.

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 CONCLUSION:

Although Indian Oil is losing market share to imported bitumen, still this is
negligible and isn’t much of a threat as of now, as customers still rely upon Indian
Oil because of its brand name. Though few customers have started importing
bitumen or buying them from importers still they are in small quantities and they
go for imported bitumen only when IOCL cannot provide them the required
quantities on time.

So it can be concluded from the analysis that if availability and service of IOCL is
improved, IOCL will continue to maintain dominance over the market and will
soon be able to regain the lost market share.

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 WEBLIOGRAPHY:
1. www.nynas.com
2. www.benzeneinternational.com
3. www.indianyellowpages.com/india/importers/bitumen.htm
4. www.tradeindia.com
5. www.exportersindia.com/foreign-exporters/bitumen.htm
6. www.hnd.usace.army.mil/techinfo
7. www.tradekey.com/kb-bitumen/
8. www.mongabay.com
9. www.infodriveindia.com/
10. www.kolkataporttrust.gov.in

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