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
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
The corporate efficiency policies adopted by the
company have already resulted in the swift compilation and declaration
of its financial results in record times.
On Friday, January 31, 2003, the blue chip entity
launched its new marketing innovation: the Fleet and Corporate Credit
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.
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
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.
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.
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.