Laugfs Petroleum (Pvt) Limited/Southern Petroleum (Pvt) Limited

Action Plan for 90 days effective from 15th July 2014

1. The Business

The Business

Vision

Mission

We are in the business of Retailing Petrol , Diesel, Kerosene, Lubricant Oil, Auto Gas and Domestic Cylinders e.t.c

To be the most preferred and recognized fuel retailer in the country with an unparalleled level of customer service and product range.

To achieve excellence in petroleum sales and marketing of High Quality Products and meet the expectations of the customer through a dedicated team of highly trained personnel.

Looking Back – 2013/14

Year Plan (2013/14) Looking Back (2013/14)

• Planned to commence Colombo south Filling Station on 16th May 2013

• Commenced Commercial Operations of Colombo South Filling Station on 30th January 2014

• Planned to complete Construction of 6th filling station outside of Colombo by end of February 2014

• Completed Constructions of 6th filling station 15 KMs off Colombo city limits and Ready for Commercial Operations in April 2014

• Petrol variants at standard along LAUGFS Auto LPG Sheds in 3 prime locations at off colombo - Galle, Kurunegala and wattala

• Commenced Commercial Operations of Galle ,Kurunegala and wattala Filling Station in October 2013 & January 2014 Respectively

• Completed Construction of Wattala Filling Station and Ready for Commercial Operation in April 2014

• Planned to tie up with 50 existing filling stations at key locations Island wide to introduce POS machines, enabling to use Touch NFC cards

Looking Back – 2013/14 (Cond: )

Year Plan (2013/14) Looking Back (2013/14)

• Introduce at least one Cash Machine to a Filling Station to upgrade the efficiency ,safety and accuracy of cash collection

• Introduce Digital Automatic Nitrogen Tyre Inflators to all filling Stations

• Installed 04 Nitrogen Tyre Inflators at Dehiwala, HavlockTown, Galle & Kurunegala Filling Stations

• Purchase three Bowsers in order to have our own transportation system

• Proposed to Purchase a Fuel Transportation Bowser in December 2014 (Subject to Cost Benefit Analysis)

• Introduce Fuel Station Management & Automation tank gauging System at Dehiwala filling station

• Propose to introduce Fuel Station Management & Automation tank gauging system at Dehiwala Filling Station on April 2014

2. Macro-Environment Analysis

Laugfs Petroleum

(Pvt) Limited

PLE

TSE

Political• Obtaining Approval for filling Station

from the Government.• Government Tax Policies and

Regulations (Eg: Taxes on Turnover)

Economical• Interest rate, monetary policies,

Inflation. • Long term prospects of the economy

.

Social• Income distribution among the

people ( Disposable Income)• Changes in lifestyles and living

condition

Technological developments

• Introducing New Operating Techniques ( E:g. Tag Readers)

• Increase efficiency through usage of wireless technology.

• Environmental Regulations.

Legal (Regulatory)• International trade regulations

Environmental

3.1 Industry Analysis – Current Status of the Industry

Item 2012 2013 2014

Value of ImportsUSD. Bn

5.0 4.3

Average Price of Crude Oil ( C& F)• Barrel

Rs

USD

14,732

116.00

13,776

110.13

Current Price of a Barrel

USD 99.84

As a percentage of all imports 26 % 24 %

World Market Crude Oil Prices

3.2 Industry Analysis

During 2013/14 Galle & Kurunegala Filling Stations has commenced operations under IOC Dehiwala Filling Stations has commenced operations under CPC

Wattala & Gampaha filling stations has completed constructions and ready for commencement of operations from April 2014

No.of Filling Stations

Sales In Kilo Liters

Market Share %

• CPC LAUGFS 10 58,883 0.90%

OTHER 1132 4,826,103 73.76%

• LIOC

LAUGFS

02 257 0.01%

OTHER 162 1,657,586 25.33%

Total 1306 6,542,829

Market Share %

LAUGFS - CPC

CPC - OTHER

LAUGFS - IOC

IOC -OTHER

4. Company Analysis

Competitive ComparisonCPC Vs. LAUGFS - Island wide in 2013( In Kilo Liters)

LIOC Vs. LAUGFS - Island wide in 2013( In Kilo Liters)

  Auto Diesel Super Diesel 90 Octane 95 Octane Kerosene Total

CPC 3,509,388 37,614 1,059,543 60,573 217,868 4884,986

LAUGFS 28,003 2,686 19,189 7,797 1,158 58,833

LAUGFS % 0.80% 7.14% 1.81% 12.87% 0.53% 1.2%

  Diesel Petrol Total

LAUGFS 30,689 26,986 57,675

LIOC 882,003 775,418 1,657,586

Western Province

5. SWOT Analysis

Strengths Weaknesses • Average 20,000 customer base per day

• 24 Hour Customer service provider.

• An unmatched strength of a strong

group of companies. (Eg: Brand Name associated with Image)

• Largest Dealer in CPC & LIOC Network

• Lack of space available for introducing all grade fuel at filling stations constructed at the beginning.

• Calibration errors in fuel dispensers.

• Poor Island wide network.

 

Opportunities Threats• Growth in Existing Market (Eg: Increment in vehicle

population)

• Opportunity to upgrade gas stations as fuel filling stations

• Potential market in North & East (Eg: Proposed Filling Station in Oluwill)

• Impact on utilization of Express Highways of Motorists.

• Introduce of New Motor vehicles with alternative energy solutions (Eg: Electric Car)

• Competition coming from the neighboring filling stations

6. Goals for 2014/15Goals / Objectives KPIs Expected Outcome Key Challenges / Issues

Financial

( Estimated Completion Date - Mar 2015 )

Revenue Growth Net Profit

Increase up to 15 billion Increase up to

100million

Increasing of Competition.

Customer Transformation alternative energy solutions.

Customers

( Estimated Completion Date - Mar 2015 )

No.of Customer Complains Corporate Customers

Zero 5000 ( Touch Cards)

Negative Attitude and job satisfaction of Customer Service Assistants.

Internal Processes

( Estimated Completion Date - Mar 2015 )

Increment of Mobile Capacity

Implementation of filling station automation system enhances speed and accuracy of Information transformation

19800 L

Introduce to all Stations

High Cost Involvement in acquiring own transport system an Filling Station Management System

People and Training

( Estimated Completion Date - Mar 2015 )

No. of Training Programs Employee Turnover Value Allocation to Employees

06 01% 35%

Retention of Employees within the organization

7. Goals for 2014/15 (Contd.)

Goal / Objective /

Key issueStrategies Timeframe Responsibility

Expected Impact

Customer

( Estimated Completion Date - Mar 2015 )

• Expand the Filling Station Network in order to achieve consolidated net profit of Rs. 100mn per annum.

• Identify possible locations to expand the Filling Station Network .

Commencement of Commercial OperationsOluwil – JuneKosgoda - August Bandaragama - AugustAwissawella -OctoberThalangama -SeptemberPapiliana -September Seeduwa -DecemberMatara -DecemberKurunegala – New -OctoberWaskaduwa - DecemberKaluthara - JanuaryHambanthota - February

GM Consultant Senior Manager -

Operation Accountant

Increment of Revenue and Market Share

7. Goals for 2014/15 (Contd.)

Goal / Objective /

Key issueStrategies Timeframe Responsibility

Expected Impact

Customers

( Estimated Completion Date - Mar 2015 )

Direct Promotions to attract 500 corporate customers with 5000 cards

During 2014/15 GM Consultant Senior

Manager - Operation

Accountant Executive

Business Relations

Increment of Revenue and Increase Customer Loyalty

7. Goals for 2014/15 (Contd.)Goal /

Objective / Key issue

Strategies Timeframe Responsibility Expected Impact

Internal Processes

( Estimated Completion Date - Mar 2015 )

Acquiring Fuel transporting Bowser

Implementation of filling station automation system enhances speed and accuracy of Information transformation.

 

Acquiring Fuel transporting Bowser– December 2014

Filling Station Management System

Dehiwala – April 2014 Orugodawatta /Koswatta –

May 2014 Other FS – July 2014

GM Consultant Senior Manager -

Operation Accountant

Reduce the lead time and transport cost

Increase the efficiency & Accuracy of Information gathering

People and Training

( Estimated Completion Date - Mar 2015 )

Increase no. of Training Programs and cost allocated to training and Development

Entire year periodically. GM Consultant Senior Manager -

Operation Accountant

Improve competency, knowledge and attitudes of the employees to delight customers and to minimize number of customer complaints, work depression of employees.

Thank you…