MRPL to focus on domestic mart

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Bibhu Ranjan Mishra / Bangalore January 14, 2008,


State-owned refinery will reduce dependence on exports as revenues fall.

With the domestic demand for petroleum products at an all-time high, Karnataka-based Mangalore Refinery and Petrochemicals (MRPL) is planning to reduce its dependence on the export market.

The company, which used to export about 50 per cent of its products, is aggressively looking at new avenues in the Indian market.

“Exports bring us lesser revenues today, so we will concentrate more on the domestic market. Whatever surplus we have after catering to the domestic market, we will export,” said R Rajamani, the managing director of MRPL.

He said the company’s exports have fallen to 43.45 per cent (of the total revenues) from about 50 per cent a year ago.

MRPL, which saw a turnaround in 2003-04, a year after state-owned Oil & Natural Gas Corporation acquired a majority stake in the company, now exports motor spirit, mixed xylene, naphtha, high-speed diesel and aviation turbine fuel (ATF) to about 18 countries.

MRPL is the second-largest exporter of manufactured goods in India. In fiscal 2006-07, MRPL’s export revenue stood at Rs 11,673 crore out of its total revenue of Rs 32,376.8 crore.

The Miniratna, which ventured into direct marketing in 2000, is aiming at revenues from oil retailing and supply of jet fuels.

While the company has already forayed into the fuel retailing business, with the opening of its first retail outlet in Maddur in Karnataka, it is hoping to tap the lucrative ATF market in India.

The ATF market in India has so far been dominated by state-owned oil marketing companies such as IOC, HPCL and BPCL.

“We are presently in talks with two airlines. The draft agreements are being exchanged. We are going to supply ATF to Bangalore International Airport (BIAL) and Hyderabad International Airport,” said Rajamani. He said MRPL had submitted bids to supply ATF to Air India and Indian Airlines.

“We had applied for tenders from Air-India and Indian Airlines, which will be known shortly. They had invited tenders for the supply of ATF in about 8-9 airports. We have already applied for some of them,” he said.

Meanwhile, MRPL is readying itself with an ATF loading facility inside its refinery, at an investment of about Rs 20 crore.

“Once we establish the ATF loading facility, we will aggressively bid for tenders,” he said.

The fuel retail outlet at Maddur has come up with an investment of about Rs 1.7 crore. It will open two more outlets in Hubli and Mangalore.

Initially, the company announced the opening of about 15 outlets in three southern states, including Karnataka, Andhra Pradesh and Tamil Nadu, in the next six months, and about 500 outlets over a period of time.

The company said the investment in the retail venture would be in excess of Rs 500 crore. However, before going in for aggressive expansion plans, MRPL will await oil bonds from the Centre.

“Once we start these outlets, we will approach the government for bonds. Based on that, we will go ahead to expand our retail presence,” said Rajamani.“Once we establish the ATF loading facility, we will aggressively bid for tenders,” he said.

The fuel retail outlet at Maddur has come up with an investment of about Rs 1.7 crore. It will open two more outlets in Hubli and Mangalore.

Initially, the company announced the opening of about 15 outlets in three southern states, including Karnataka, Andhra Pradesh and Tamil Nadu in the next six months, and about 500 outlets over a period of time.

The company said the investment in the retail venture would be in excess of Rs 500 crore. However, before going in for aggressive expansion plans, MRPL will await oil bonds from the Centre.

“Once we start this outlet, we will approach the government for bonds. Based on that, we will go ahead to expand our retail presence,” said Rajamani.