Byco – Oiling the Economy

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Interview Questionnaire for Mr. Kalim A. Siddiqui


Please share your educational & professional background.

I am a Chemical Engineer by profession and have completed my education from United Kingdom. I initially joined Caltex and worked there for almost 20 years. After that, I was hired by PSO where I served at various management positions for a couple of years. I was the Managing Director there before joining Byco. Currently, I am working as the President, Petroleum Marketing in Byco. I was also part of the board of management at PSO and PRL and now I am a member of Board of Investment (BoI). I have written many un-official papers for the government and the authorities have considered my opinions and solutions.

 

What are the aims & objectives of Byco? Tell us about the future plans of this organization.

To join Byco was a great challenge for me in the sense that before joining this company I was heading one of the largest organizations in Pakistan while Byco was a new entrant. When I joined Byco the turnover was just Rs. 6.7 billion but Alhamdulillah, we achieved a turnover of nearly 27 billion by the end of the last financial year which is almost a 300% increase as compared to last year. This was achieved through considerable growth in volumes and organic growth in retail network development. Now, we are the 5th largest OMC among an industry of 12, as compared to being on the 10th position earlier. My vision is to take Byco from its present level to even greater heights of success and be counted among the top 3 OMCs in Pakistan. We are an emerging energy leader with 163 retail stations across and expecting to reach 250 by the end of this financial year.

 

Are you facing any major problems? To what extent is the government or the concerned authorities supporting you?

Currently, there is only one major problem which is broad based and faced by all businesses in Pakistan which is continuity and long term policies regarding business and commerce. Every new government rejects the policies of the previous government and makes its own which has negative consequences on business entities and investors. Most investors have a 3-4 year business plan therefore any unexpected change in policies as a result of a shift in the political set up during this period would discourage investors to take risk. Investors and business men will only bring in investments if they expect a fair return, long-term continuity in policies and stability of the government.

Do you face any hurdles or competition with other petroleum companies?

We constantly face tough competition from other companies. There are also hurdles in every stage but we have to find our own way which we have successfully done and are moving ahead. There are only 3 companies which have their terminals on Keamari and recently we have made an arrangement which will enable us to become the next which for us is a great achievement. We will start operating next month.

 

Does Byco comprise of foreign investment?  

Byco is a 40:60 entity. 40% of the stake is with Abraaj Capital and 60% with Bosicor Corporation Limited.

 

Describe the strategy that you have adopted to get maximum profit?

The strategy we adopted for maximum value creation is to provide finished products according to the customer needs. Marketing contributes greatly towards revenue generation but the refinery also plays a pivotal role and has vast potential. Since the past couple of years, it is under discussion with the government and any conclusive decisions are yet to be reached. Its finalization will triple or quadruple our revenues. There are only 5 refineries operating in Pakistan and just less than 50% of the country’s finished products are being supplied by them while the remainder is being imported. If we increase the installed capacity or number of refineries, it will help us to match demands and move towards self sufficiency, revenue generation and economic growth.

 

Why should consumers prefer using Byco products as compared to other petroleum products?

We have our own refinery which ensures continuity of product supplies making us a reliable choice for customers. I believe in future integrated companies like ours will dominate the market and will be preferred over competitors who are dependent on other refineries for their supplies. One of our refineries with a capacity of 35,000 barrels is in operation and another refinery with a capacity of 120,000 barrels is under construction on which 85% of the work has been completed.

 

What are the government policies for petroleum industries?

The defined policy of government is to adapt de-regulation and I am a great advocator of this policy as it will greatly benefit the industry as well as the country in the long term. For instance, whenever government increases the prices of petroleum products, increase in price of petrol is always greater than the price of diesel and the reason given is that diesel is used in public transport. This is a major misconception as internationally the price of petrol is always less than the price of diesel.

 

During Bhutto’s regime there was a big collapse in the organization? What was the reason?

The main reason for the collapse was nationalization of all private companies. This led to a loss of enterprise in the economy and since there was no competition, efficiency of those companies declined drastically and consequently customers received products and services that were not only more expensive but also of poor quality. At that time PTCL, for instance was purely a public entity and the time it took to receive a connection could last from one generation to the next. Moreover, per minute international call rates  were approximately Rs. 80 or Rs.100. After privatization, the same organizations have become far more efficient; can provide competitive call rates and a greater range of products and services at a cost which are hundred times less. Nowadays, you can make calls all around the world for nearly Rs. 1 per minute.

 

In your opinion, how can stability be established in our country?

Government should carry out long term planning with continuity in policies and a broader vision. It should put emphasis on developing and incorporating new technologies and ideas that would strengthen the economy and provide stability to the country. If we all work with honesty and integrity and give the required dedication towards the needs of our country, I strongly believe that we will not need any assistance from IMF or any other international aid agencies.

 

What advice would you like to give to new investors who are willing to enter in the petroleum Industry?

There is enormous opportunity of investment in Pakistan. Believe me, there are billions or trillions tons of natural resources. The potential of growth and investment that exists in Pakistan is unlimited. All we need to do is to improve the law & order situation and provide an enabling environment for investors.

 

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