IOC, IBP to have 1700 more outlets

AHMEDABAD: Indian Oil Corporation Ltd and its subsidiary IBP Ltd will invest Rs 1,650 crore during 2005-06 to set up another 1,700 odd retail outlets.
The two companies retail network would grow from around 13,500 outlets as of FY05 end to 15,200 by end of FY06. NG Kannan, director (marketing) told TOI that IOC''s strategy is to create a strong entry barrier for all competitors by having a presence in al-most all high volume and lucrative areas.
"A joint marketing plan has been prepared whereby IOC''s and IBP''s new outlets will not be set up close to each other.IOC has budg-eted an investment of Rs 1,150 crore to add around 1,000 outlets in FY06 so as to have a total of 11,200 stations in place. IBP will invest Rs 500 crore to expand its network from 3,300 to 4,000 outlets by FY06 end," explained Kannan.
Diesel accounts for around 70% of total petroleum products and it happens largely on the highways. Kannan said that for IOC to retain its existing diesel market share of 40 per cent it has to increase its presence on the highways.
Under the ''Swagat'' brand IOC is setting up large format outlets spread over 3-5 acres on the highways to compete against new en-trants like Reliance and Essar groups. These mega-outlets will offer all facilities required by a trucker like auto parts and tyres, food and beverages, communication and entertainment services and medical facilities. "Each of these outlets would cost Rs 2-3 crore. Around 100 Swagat outlets will be ready this year and another 100 will be added during next financial year," said Kannan.
The other major initiative being undertaken by IOC is to upgrade its ''Q&Q'' branded outlets to the ''Xtracare'' level on the highways as well as in major cities. "By end of 2005-06, IOC plans to have 2800-3000 of its outlets under the ''Xtracare'' and these will account for about 70 per cent of IOC''s total sales by volume," said Kannan.
IOC''s ''Xtra Rewards'' card programme had not done well. So, a complete revamp has been undertaken and it will now set up termi-nals provided by HDFC Bank. "IOC has tied up with major players like Hindustan Lever for this programme and a new target of 5 mil-lion cards in 18 months time has been set," said Kannan. The existing 12,000 card-holders will be moved to the new plan.