HINDUSTAN PETROLEUM

Company Profile: Hindustan Petroleum

Corporation Limited
Ticker: 500104
Exchanges: BOM
2009 Sales: 1,136,800,000,000
Major Industry: Oil, Gas, Petrol, Coal &
Related Services
Sub Industry: Oil Refiners & Distributors
Country: INDIA
Employees: 11246

Our Profile

HPCL, a fortune 500 company, is one of the major integrated oil refining and marketing companies in India. It
is a Mega Public Sector Undertaking (PSU) with Navaratna status.

HPCL accounts for about 20% of the market share and about 10% of the nation's refining capacity with two
coastal refineries, one at Mumbai (West Coast) having a capacity of 5.5 Million Metric Tonnes Per Annum
(MMTPA) and the other in Vishakapatnam (East Coast) with a capacity of 7.5 MMTPA. HPCL also holds an
equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art refinery
at Mangalore with a capacity of 9 MMTPA.

HPCL owns the country's largest Lube Refinery with a capacity of 335,000 Metric Tonnes which amounts to
40% of the national capacity of Lube Oil production. HPCL has given India a firm ground in this sector with
its world class standard of Lube Base Oils. Presently HPCL produces over 300+ grades of Lubes, Specialities
and Greases.

HPCL has earned "Excellent" performance for fifteen Consecutive years upto 2005-06, since signing of the
first MOU with the Ministry of Petroleum & Natural Gas. HPCL won the prestigious MOU Award for the
year 2007-08 for Excellent Overall Performance, and for being one of the Top Ten Public Sector Enterprises
who fall under the 'Excellent' category. HPCL's performance for the year 2008-09 also qualifies for
"Excellent" rating.

HPCL, over the years, has moved from strength to strength on all fronts. The refining thruput has increased
three fold between 1984/85 to 2007/08, rising from 4.47 MMTPA in 1984/85 to 13.70 MMTPA currently.

Consistent excellent performance has been made possible by highly motivated workforce of over 11,245
employees working all over India at its various refining and marketing locations.

HPCL continually invests in innovative technologies to enhance the effectiveness of employees and bring
qualitative changes in service. Business Process Re-Engineering exercise, creation of Strategic Business
Units, ERP implementation, Organizational Transformation, Balanced Score Card, Competency Mapping,
benchmarking of refineries and terminals for product specifications, ISO certification of Refineries and
Supply Chain Management are some of the initiatives that broke new grounds.

HPCL has successfully integrated Information Technology in its activities at different levels. The Enterprise
Resource Planning (ERP) system is now operational on J.D.Edwards, an Oracle product, across the
Corporation.

SALES AND DISTRIBUTION STRATEGY OF PETROL IN BPCL

SELLING STRATEGY…..

• We have plans to set up 42 auto petrol dispensing stations across the country during 2002-03, of
which, 16 would be in Delhi. The other cities we are looking at are Mumbai, Bangalore, Hyderabad,
Pune and Ahmedabad. At present, the company has seven auto petrol dispensing stations in Mumbai
and two in Delhi. As per the strategy, we are also in talks with the Italian auto petrol kit
manufacturer, OMVL, for setting up a joint venture for supply of convertible kits for automobiles.
• India`s petrol industry that serves 635 million consumers, is dominated by state-owned firms and is
plagued by shortages, delays and poor service.

But we, at HPCL, would like to bring initiatives that would boost consumer loyalty and beat
competition in an industry where service rather than products would drive future growth. As a part of
our strategic marketing initiative to break out of traditional petrol business and establish `HPpetrol`
as a distinct and unique brand, we would like to increase consumer focus and penetrate the untapped
rural markets. Today we have a consumer base of more than 16 million and a network of 1,823
distributors. We expect petrol demand in the country to grow by seven to eight per cent to 11 million
tonne by 2005, from about 8 million tonne in 2001-02.
• Withdrawal of the subsidy will allow state and private companies to compete as equals. Currently,
Indian Oil Corporation has about a 50 per cent share in the domestic PETROL market, while Bharat
Petroleum Corporation has the rest.
 • We will begin selling our entire range of lubricants and engine oils in Malaysia and Indonesia later
this year. The third and final phase of our business strategy will be to establish presence in Nepal,
Bangladesh, Tanzania, Kenya, Indonesia and Malaysia. We also plan to sell our products, ranging
from transport fuels to consumer products and lubes, in these countries. Though we have not planned
anything on retail marketing in these countries yet, we are preparing for such an eventuality.

DISTRIBUTION STRATEGY……..

• As such, there is rapid growth in the distribution network of petrochemical industries inindia and the
government is looking forward to major investments from foreign companies.

• HPCL has a network of more than 60 distributors and agents for the distribution of polypropylene. It caters
to more than 3000 worldwide customers and is focused on the establishment of excellent customer service.
HPCL caters to chief countries like Europe, China, Japan, and the Middle East. The core area of the
distribution network of HPCL is in establishing continuous rapport and relationship with the customer.
There are professional teams offering technical solutions as well.

• HPCL has the largest distribution network in the country. The company has a huge distribution network
and a wide national marketing strategy. The distribution network is focused on the following areas:

1. Reliable supply of petrochemicals

2. Enhanced customer service
3. Maintaining quality in its products
4. Technical Support
5. After sales service

• The major distributors of petrochemicals are putting their thrusts in the following key factors:

1. There is a big gap between the demand and supply of synthetic rubber and detergents.
2. Future possibility of supply of petrochemicals exceeding demand.
3. Aiming at increasing the per capita consumption of petrochemicals.
4. Equipping petrochemical plants with latest technology.
5. Setting up new plants to cater to the world at large.

• The distribution of petrochemical industries inIndia is in Panipat, Mathura, Digboi, Guwahati, Barauni,
Mumbai, Vadodara, Vishakahapatnam, Mangalore, Chennai, and Haldia. The wide distribution
network and the various advancements of the major petrochemical companies like RIL, IPCL, and BPCL
have been a key feature of growth this year.