UTILITY STORES CORPORATION OF PAKISTAN (PRIVATE) LIMITED HEAD OFFICE, ISLAMABAD

Brief On Utility Stores Corporation's Achievements

Apr 16 - 22, 2007

1 GENERAL

Utility Stores Corporation was established in September 1971 by the Government of Pakistan. Important points with special reference to its objectives, brief history, measures taken to improve its performance and current status under various heads are given in the succeeding paras

2 OBJECTIVES

a. To protect the real income of the poor peoples by providing consumer goods at cheaper prices as compared to the market.

b. To act as price moderator, deterrent to profiteering hoarding etc, by maintaining, buffer stocks of daily use.

c. To assist the Government in crises situation by compliance of its policies and exercising check on the prices of consumer goods.

3. USC has successfully achieved above objectives through the chain of stores all over the country since its inception and earned public support in favour of the Government.

4. RE-STRUCTURING / RE-ORGANIZATION OF USC

As per decision of the Government, during financial year 2000 re-organization of USC under taken and following, major steps were initiated to turn around its operational performance

a. Unviable stores were closed reducing the number on yearly basis since 1996 which were reduced to 340 as on June 2004.

b. Surplus manpower had been laid off reducing it from 3606 employees since 1997 to 1037 employees as on June 2004.

c. Operational expenses have been drastically cut down from Rs.566.96 Million in 1998 to Rs.35000 Million by June 2006 which I is made a saving of Rs.216.96 Million.

d. A policy of good Governance and economy measures has been launched

e. Outstanding vendors liabilities more than 262 Million during the past three years have been laid off who has started supplying goods to USC and business cycle has increased.

f. As a result of reorganization process. Closure of stores various surplus redundant assets were. disposed of to save, their further deterioration/ losses.

g. Recoveries on account of insurance claims, advances and shortages were affected.

h. With these measures, customer traffic at store has been increased, resultantly USC sale has increased.

USC ROLE IN SUPPORT OF GOVERNMENT:

(1). USC has successfully carried out following relief schemes launched by the Government for welfare of poor people during 2005 2006:-

A. RELIEF IN SUGAR PRICES

(Rs. In Million)

USC has sold 382,000 Tons sugar since March 2005 to Nov 2006 at a subsidized price and an average Relief @ Rs. 14.00 per Kg, is availed by the public. 5384.00

B. RELIEF IN ATTA PRICES

USC has sold 254000 Tons Atta at a reduced price of Rs.230.00 per 20 Kg Bag as against retail price of Rs.270.00 and a Price. Relief @ RS.40.00 per Bag since June 2005 to April 2006 is passed on to the public. 508.00

C. RAMZAN RELIEF PACKAGE

With the Government assistance, USC has launched during Ramzan 2005 & 2006 Relief Package and a sizeable economic relief is availed by the public. 470.00

D. SPECIAL PRICE REDUCTION SCHEME

In line with the Government policies, to exercise check on prices USC has launched Special Price Reduction at the eve of Eidul Azha and other occasion which has facilitated the public to avail Relif. 600.00

E. EARTHQUAKE RELIEF

During October 2005 to December 2005 in the Earthquake disaster, USC has supplied food stuff relief goods at an average 50 60 trucks daily to the Emergency Relief Cell of the Cabinet Division which has assisted the Government to support the earthquake effecttes. 417.00

Aggregate overall Relief to the public during the year 2005 2006. 7343.00

 

(2). USC had played effective role to stabilize prices in the market in conformity with Government polices. This has forced retailers to keep their prices at the low level.

(3). USC Act as vehicle to meet food stuff crises, whenever it arises.

(4). Provide data and prices of commodities to the Kitchen Committee of the Cabinet to facilitate decision making and planning by the Government.

(5). Introduced MIS in Key Areas.

(6). Introduction of USC own brand products in packing at economical rates.

(7). Availability of Best Quality Commodities and other branded goods are ensured with the result customer traffic at store has increased.

(8). Business relation with the vendors registered favourable improvement and supply position is comparatively much better.

OVERALL IMPACT

A. REDUCTION IN OPERATIONAL LOSSES

Despite facing a difficult challenges, like retrenchment of staff, closure of stores, lethargic work force, unwilling worker to accept changes, interruption in supplies, levy of GST and other adverse business environment, following constant reductions in operating losses are registered and during financial year 20052006 has earned net profit:

(Rs in Million)

YEAR

PROFIT

LOSS

REDUCTION

PERCENTAGE

1999 -2000

-

260.14

65.80

20.0(%)

2000 - 2001

-

234.05

25.99

10.00%

2001- 2002

-

36.16

197.87

84.54%

2002 -2003

-

90.00

-

-

2003-2004

-

32.69

57.31

64.00 %

2004 2005

246.00

USC has turned into Profit

2005-2006

422.77

-do-

B. FUTURE PLANNING

At present USC is operating 15 Regional Offices/Warehouses and 560 Stores. In order to cover entire Pakistan USC intend to expand its net work by opening 20 new Distribution Centers and 440 Stores at the Uncovered District/Tehsil level to cover the population of 20,000 and above with a view to provide benefits of reduced prices to more segment of population and at the same time generate employment opportunities for the people of these USC will also open static and Mobile Franchise Stores to provide rozgar to the unemployed youth to make them active member of the society as per Government policy.

USC will also actively participate in the Government relief activities to Curb the price hike in an effective way in normal as well as in the Crises situation.

USC intend to expand its operation in a way so as to be at break even, through strict economy measures and policy of good governance.

GOVERNMENT ASSISTANCE REQUIRED

a. USC is a welfare organization, levy of GST does not provide a level playing field to USC as compared to retailers. It should be waived off.

b. USC intend to install computer net working on line system. i.e. linkage of operational activities at stores, Warehouses with the Regional Offices and USC Head Office as well, with this automation, it would be possible to identify the overall and unitwise stock movement, its availability, stocks turn over, procurement planning to avoid overstocking blockages of fund and will help in decision making, so as to improve performance with the multiple benefits of automation.

c. Government should allocate rent free stores in all District and. Tehsil Headquarters for welfare of the common man.

d. Government should allocate wheat quota to USC at Government prices, so as to sell it at cheaper prices in the open. market for welfare of the common man.

e. Government should allow confiscated goods 80% quota to USC so as to sell it to public through a large chain of USC stores.

QUALITY IMPROVEMENT

It is USC prime motive to provide improved service to the valued customers through our polite behavior, better service, competitive prices, availability of good quality products under one roof for which we have undertaken following action:

a. Competitive prices of all consumer items are ensured.

b. Interior cleanliness of the stores and products are carried out to present a better outlook.

c. Packing and presentation of the commodity items are improved to ensure complain free atmosphere at stores.

d. Training of field force and change of culture is being emphasized.

c. All National and International companies are being frequently invited to launch their promotional schemes through USC out lets.

f. Publicity through electronic & print media is being introduced to create awareness among the customers.

g. Reward & Incentive schemes are being introduced to create a competition among work force to:

(1). Shows better attitude/ salesmanship.
(2). Improve sale at stores'.
(3). Avoid customer complaints.
(4). Reflect good discipline.
(5). Minimize losses/expenses etc.

h. Monitoring and accountability of each field is carried out to evaluate Progress, rectify weaknesses and plug malpractices as a routine process.

j. Procurement of good quality products from the source through a committee of Officers is carried out so as to ensure good quality of Rice & Pulses at each out lets.

k. As a result of these measures public response is very encouraging and USC performance has greatly improved.

7. CONCLUSION

USC is a tool in the hands of Government, its existance in the public sector is very vital. It assists the Government to implement all welfare activities for the benefit of common man. Government should strengthen this organization to ensure availability & to exercise check on market prices.