SOCIETY HEALTH AND SAFETY
COLUMN FOR THE RECORD
POLITICS & POLICY 1- REPERCUSSIONS OF US-IRAQ WAR ON PAKISTAN
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PM'S VISIT TO CHINA
COMPANY PROFILE 1- A DECADE OF COMMITMENT
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MARI GAS COMPANY LIMITED
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PSO REGAINS LEADERSHIP ROLE UNDER TARIQ KIRMANI 
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PSO REGAINS LEADERSHIP ROLE UNDER TARIQ KIRMANI

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By Our correspondent
Mar 31 - Apr 06, 2003
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Pakistan State Oil (PSO) has undergone drastic changes during the. last three years. The new management has taken a variety of new initiatives that have helped the company regain its leadership position. At the core of this endeavor is the New Vision Retail Development program that brought about the development of elegantly designed outlets at strategic locations throughout the country. Equipped with most modern facilities like electronic dispensing units, convenience stores, Business Centers and, most of all, a more customer friendly staff, these outlets have gone a long way in restoring the customer confidence in PSO.

In addition to this, various new products and services like CNG stations, PSO CNG Oil, Mobile Quick Oil Change and Mobile Quality Testing Units have improved the image of the company substantially.

The management's thrust has been on increased operating efficiency, more consideration on high margin products, further expansion of new product lines and services and tightening of systems and controls as well as full impact of enhanced margins. Besides innovative marketing strategies, there has been organizational restructuring, product mix and the revamping of internal systems that have all had led to improved productivity.

PSO's corporate structure has evolved into a matrix, which has divided the company's major operations into independent activities supported by the financial, legal, information and other services. These activities operate in an autonomous and collegial manner in the form of Strategic Business Units based on the clear and transparent allocation of responsibility and accountability.

This structural change has been reinforced and related checks and balances have been established by putting in place several corporate monitoring and control systems.

Effective implementation of corporate reform and business development strategies in line with best international practices enabled PSO to maintain its market leadership position in a highly competitive business environment.

Complete security services were introduced for the first time in 2001. The changes that were introduced are extensive, substantial and far-reaching in nature.

For all hiring and appointments, written tests were taken by the IBA and interviews carried out by seasoned professionals. As such, the selections were purely made on merit.

Accordingly, PSO increased its market share in key products including Mogas, HSD, lubricants and Jet A-1. During the first half of FY-03, the PSO sales revenue soared to Rs. 101.3 billion, an all-time record since the inception of the company, thus registering an impressive growth of 17.5% over prior year period. For the period ended December 31, 2002, the company earned an all-time record profit after tax of Rs 2.06 billion, while the profit before tax stood at Rs. 2.9 billion.

Not only that, in three years time PSO's share has risen from Rs 79 to Rs 205. And it is expected to further soar in the near future.

The corporate efficiency policies adopted by the company have already resulted in the swift compilation and declaration of its financial results in record times.

 

 

PLASTIC CARDS

On Friday, January 31, 2003, the blue chip entity launched its new marketing innovation: the Fleet and Corporate Credit Cards.

The cards were a part of aggressive marketing measures to attract fleet and corporate accounts, thus enlarging its customer-service base manifold. The new cards are an extension of the company's cards diversification programme.

The vehicle-specific Fleet Card offers the advantage of a pre-approved credit limit and leads to improved fleet management. On the other hand, the corporate card is employee specific. It is a personalized card with a pre-approved credit limit.

Other benefits offered by the two cards are security and savings through the elimination of pilferage, consolidated monthly billing statement, flexibility and convenience.

Last year in July, PSO had launched Loyalty Card that entitles customers to earn 'PSO Loyalty Points' on every purchase of fuel or lubricant. The points accumulated can be later redeemed from PSO's Merchant-Consortium that covers a wide range of categories to choose from or from PSO's own stations that offer petrol, hi-octane, diesel or lubricant.

PSO's technology partner in this strategic new e-business venture is M/s ORIX Leasing Pakistan Limited that has provided PSO with the requisite infrastructure and technical expertise and support for the operation.

HUMAN RESOURCES

The management of PSO is fully cognizant of the fact that human resource is the most important asset of the company. While strengthening the ranks of its workforce with quality professionals at various levels of management' PSO has also taken several initiatives for improving the overall productivity and efficiency of its staff through computer training, in-house courses, sponsorship for studies at professional institutions and seminars. Sales Conferences and Operations Conferences are regularly held in which division managers and operations managers present the performance of their respective areas. This forum induces confidence in them, improves motivation and helps them to remain focused.

The management attaches high importance to ethics and a sound ethics policy is in force. All company promotions and transfers are done purely on merit and the employees informed about these through notice boards.

CORPORATE SOCIAL RESPONSIBILITY

As the largest oil marketing company in Pakistan, PSO has taken care of its corporate social responsibility, emerging as a socially responsible company that strongly believes in integrating social, economic and environmental aspects.

A major step last year was PSO's partnership in the Karavan Karachi Road Sense program that was aimed at inculcating road sense among children and introduce them to public institutions. The company hosted and financed several Karavan Karachi programs, some of which were presided over by the Sindh Governor, Finance Minister and Commander Karachi. The company, in a major departure from tradition, opened the doors of PSO House to school children, who visited the podium and atrium. The program not only introduced the company to a number of school children but also showed to the people at large that PSO deeply cared about making this city a safer and a happier place.

PSO has also instituted gold medals for outstanding students of six universities besides a scholarship at the Edwardes College, Peshawar, whose amount was divided among three talented students.

PSO has also been offering the largest number of internships to students of different universities from Peshawar, Islamabad, Lahore' Multan and rural Sindh.

The company has installed directional signs in Karachi and Lahore. The scope of the campaign is to be expanded to other cities as well in the future.

The company has launched the Retail Safety Booklet to promote safety at its retail outlets, depots and installations and arranged series of lectures, movies, first aid displays and fire drills arranged to mark the Health, Safety and Environment (HSE) Day at depots and installations.

ACCOLADES

Pakistan State Oil (PSO) has been honoured as the first Pakistani corporate entity to be studied as a case of exemplary corporate transformation by the Wharton Business School of the University of Pennsylvania, USA.

Wharton School is part of the University of Pennsylvania, the highly competitive and most prestigious Ivy League School in Philadelphia, which is America's first university. Its faculty includes four Nobel Prize recipients. The Wharton School has been playing a pivotal role in shaping the course of business across the globe based on study of best corporate principles and practices. In this context, selection of PSO as a case study at Wharton is indeed an honour for Pakistan.

 

 

PSO's radical and successful corporate transformation has been widely appreciated at various international forums and by world's leading consulting and financial advisory firms including JP Morgan, who in their Information Memorandum acknowledged the significant progress made by PSO towards putting in place the basic framework for corporate reform in line with the modern concepts and practices. This includes streamlining the investment planning process, developing a model for business-wise and product-wise profitability analysis and developing a comprehensive corporate plan.

Dr. Ishrat Husain, Governor, State Bank of Pakistan, has also commended the "remarkable turnaround" of PSO and suggested that the oil giant's success story should be emulated by other public sector organizations.

On a visit to PSO House, Dr Ishrat said as a nation we had a miserly approach in appreciating any good work and were extravagant in criticism. He said that he had come to PSO House to rejoice with its workforce on its achievements and the visit had given him a better insight into the operation of the country's largest oil-marketing company. "I will now be able to quote this work in a more positive way," he said.

On the issue of reforms, he suggested to the PSO management to disseminate, even offer, their experience and expertise in management, operations and human resource to other companies. "Why bring in foreign consultants on hefty payments when such fine talent can be found in the country," he remarked.

FUTURE

As the era of deregulation has beckoned, PSO is now responding faster to the changing market conditions. This has been made possible by overhauling strategies and harnessing strengths to stay ahead of the competition. With a demonstrable track record of leadership in the oil-marketing sector, PSO will continue to break new grounds in order to reach its potential.

What cannot be ignored is the fact that PSO has made all these achievements under the dynamic leadership of Mr Tariq Kirmani, a seasoned professional who has more than 30 years of experience in petroleum industry here and abroad. Mr Kirmani took charge when a void had developed following the killing of former managing director. From a situation that can be best described as grave, Mr Kirmani produced solution-oriented policies, developed strategic plans and implementation agenda. Under his supervision, PSO pioneered new options, adopted emerging trends, maintained financial integrity and introduced a highly qualified environment within the company. Combining insight, knowledge and original thinking, he opened up the world of possibility beyond conventional.

It is Mr Kirmani who has given a new image and spirit to the company, a new sense of direction and has made it a force to reckon with. It is he who has introduced a zero tolerance policy for corruption. Therefore, there is no surprise that the name of Tariq Kirmani is now synonymous with the new PSO.