Financial Times

Lanka IOC to increase number of dealers
It may have been only three years ago that Lanka Indian Oil Corp began operations in the country, but already they are seeing returns on concerted efforts to offer its customers world-class services, leading to brand loyalty.
Despite a rough year due to high oil prices, leading to a colossal negative balance subsidy of Rs. 7.4 billion and weak shareholder returns, a number of projects have gone ahead to ensure the company’s presence and reputation becomes more entrenched.

To keep its profile high, Lanka IOC has refurbished 80 of its retail outlets, where 20 have been “razed and rebuilt”, leading to increases in sales, where the company now has a 27, 24 and 19 percent share of petrol, diesel and kerosene, respectively, with a 26 percent overall share in the retail market, S. K. Swaminathan, Director, Lanka IOC told reporters last week. “A concerted effort has also been made to better train our managers and service staff to ensure that there is an improving landscape as far as our retail outlets go,” said K. Ramakrishnan, Managing Director, Lanka IOC, adding that 18 of the outlets now offer a convenience store, where five contain ATMs.

The company is also looking to increase the number of franchises, especially in less high-profile areas, where Lanka IOC is looking for prime land it can rent over a 20-year lease to bring services to more rural areas, such as building outlets on B roads and in fishing villages, he said.

On subsidies, Mr Ramakrishnan said the “company was in talks with the government” and he was “pleased with the progress being made”, adding that next on the agenda was looking after the company’s shareholders as the stock price was significantly down from the opening price when the company was floated in 2004. He had no comment to make over Sri Lanka’s decision to back moves to report Iran to the UN Security Council leading to the possibility of oil import disruptions. (RI)

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