Dedication

Dedicated to our parents and our teacher Mr. Ahmed Rana for inducing us to
brighten benevolence, bringing more knowledge and experience in our life, which
will prove as an asset in the forth coming years.

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Acknowledgements
"In the name of God, most Gracious, most Compassionate".
This research project would not have been possible without the support of many
people. We wish to express our gratitude to our supervisor, Sir Ahmed Rana who
was abundantly helpful and offered invaluable assistance, support and guidance.
Special thanks also to all our graduate friends, especially to all group members for
sharing the literature and invaluable assistance.
There were times in the course of preparing this report when things were tough and
the future seemed dark. It could not have been possible to write it, without the
immense help of a few individuals to whom we would like to offer our gratitude.

Thanks!

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Introduction

We worked on Pearl PARCO in this project report regarding subject Brand audit.
The reason of working on Pearl PARCO is that it is the biggest Oil Refinery of
Pakistan and is dealing in retail sales as well as in Industrial Sales.
In last few days we have visited the Regional Office of Pearl PARCO at Lahore
several times and tried to collect maximum data regarding prices and sales
strategies. Although we had limitations due to shortage of time, but we did our best
to grab maximum and highlight the Sales and Selling competencies of Individuals
working for Pearl PARCO.
The purpose of this report is to express what we observed what are the necessary
measures that can help in streamlining and improving the sales of Pearl PARCO.

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Company Profile
After the 1971 war between India and Pakistan, the Government of Pakistan
realized the need for a refinery in the middle of the country. In 1972, Government
of Pakistan allotted Land for this Refinery in Mahmoodkot district Muzafargarh.
With the collaboration of Government of Abu Dhabi and Government of Pakistan
Pak Arab Refinery Limited (PARCO) was formed in 1972. In beginning due to
lack of funds, it was decided that Pak Arab Refinery Limited (PARCO) shall build
a pipeline from Kemari at Karachi to Mahmoodkot at district Muzafargarh.
Lands were also allotted to Pak Arab Refinery Limited (PARCO) at Kemari (PS1),
Korangi (TS1), Bubbak (PS2), Shikarpur (PS3), and Rajhanpur (PS4) to create
pumping stations for this Pipeline.

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In end December 1972 Pak Arab Refinery Limited (PARCO) started acquiring
lands to connect these pumping stations from Kemari (PS1) to Mahmoodkot (TS2).
This Project of acquiring land and fabricating/ erecting a pipeline was completed in
1976. The initial employees of Pak Arab Refinery Limited (PARCO) were brought
from WAPDA and Sui Gas. This company was formed with a startup capital of
forty Millions at that time.
From 1976 onwards PARCO starting functioning as the Pipeline Transport
company. As Pakistan always had a great import bill for White Oils, this transport
company started playing its role in saving foreign investment in form of saving
HSD (High Speed Diesel) previously used for transporting of fuels from coast to
upcountry. The success story forced the government of Pakistan to pump in more
into PARCO and extend this pipeline from Mahmoodkot to Faisalabad (TS3) and
Machike (TS4).
Pak Arab Refinery Limited (PARCO) was lucky to get a very young and
enterprising Managing Director (Mr. Shahid K. Haq) in 1992. This Young MD
PARCO, immediately starting using his influence on the Government of Pakistan
and the Board Director from the Government of Abu Dhabi to convince them about
the need for Mid Country Refinery in Pakistan.
Due to these efforts, all the feasibilities were finalized and approved by two
governments and first EPC contract was awarded in 1998. This project of Eight
Billion US Dollars was completed in 2001.
After Pak Arab Refinery Limited (PARCO) came into production in 2001, the need
for another pipeline was felt from Mahmoodkot to Karachi so that white oil
produced by the refinery can also be transported to coastal areas of the country.
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Pak Arab Refinery Limited (PARCO) decided to separate the two businesses. Now
this pipeline transport company was name Pak Arab Pipeline Company (PAPCO).

Product Line
Once the Refinery came into production the following products were produced.
Liquid Petroleum Gas (LPG)
Motor Spirit (MS90 RON)
High Speed Diesel (HSD)
Low Speed Diesel (LDO)
Kerosene Oil (SKO)
JP8 (Jet Fuel)
High Sulfur Furnace Oil (HSFO)
Sulfur
Asphalt (Asphalt Plant almost ready for production)

For sales of the above products, Government issue Oil Marketing License in the
name Pearl PARCO. To avoid controversy of LPG, PARCO distributed the
products quota among LPG Marketing companies as per their market share and
signed Off Take Agreements with them.
As Motor spirit and Diesel (Both Being Regulated Products) was also scarce
product in the country, on demand from the Government of Pakistan, Pak Arab
Refinery Limited (PARCO) distributed the Quota among Oil Marketing
6|Page

Companies. At that time there were four Oil Marketing companies, but government
also decided to give new Oil Marketing Licenses. As the main products line were
of regulated products and the existing OMCs were only four, Pak Arab Refinery
Limited (PARCO) signed off take agreements with them. These are the following
OMCs.
Pakistan State Oil (PSO)
Shell Pakistan Limited (SPL)
Caltex
Total Parco Pakistan Limited(TPPL)
Attock Petroleum Limited (APL)
Later on government issued Oil Marketing Licenses to the following companies
too
Hascol Petroleum
Bosicor (Currently BYCO)
Askaar
Admore
OOTCL (Overseas Oil Trading Corporation Limited)

So Pak Arab Refinery Limited (PARCO) also signed sales agreements with these
new OMCs.

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Customer Profile
Currently in Pakistan, after Pakistan Railways, Pak Arab Refinery Limited
(PARCO) is the biggest Semi Government Organization. It is the only AAA Rated
financial company of Pakistan. Pak Arab Refinery Limited (PARCO) has a
Refinery, Pipeline, stations and land along Pipeline worth Ten and half Billion US
Dollars.

PEST
Political situation:
The political situation of Pakistan is not satisfactory and unstable. Rapid change in
the Govt. and the change of the policies of the previous govt. by the new govt.
abruptly effect the Pakistans political situation. Due to these entire factors the
foreign investors hesitate to invest in Pakistan.
Govt. should device such policies that are beneficial for the local exporter as well
as for the investors.

ECONOMIC SITUATION
The economic condition of Pakistan is not suitable for investment. Market growth
rate is very low and new investors hesitate to invest. Increasing inflation rate due to
heavy loan make the business environment strict. Actually increase in inflation rate
leads to high cost of production so our country products sell out at a high price but
with low margin.

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SOCIAL SITUATION
The change in the lifestyle of the people affects the growing demand of the
PARCO products. The change in the lifestyle and needs in different demographics
also affect the demand of the customers.
Due to all these changes PARCO is performing excellent for the excellence of
organization as well as for the customer.

TECHONOLGICAL FACTOR
Technological advancement in all the sectors of the country has changed the entire
socio-economic environment. Especially in the Oil sector there is a lot of
technological development.

Oil Shortage In Pakistan

The oil shortage witnessed in the Punjab and Sindh during the first week of June is
primarily due to several factors. Firstly, the planned annual maintenance of Attock
Refinery in June-July hurt output, as the refinery contributes 6.5 per cent of the
country's oil needs and meets 13 per cent of the petrol demand. The instability and
vagueness in the oil pricing mechanism has also forced many refineries to curtail
or block their production. The Pak-Arab Refinery Limited (Parco) shut its plant for
the first three days of June, and only agreed to reopen after a new oil pricing
mechanism was chalked out. Approximately 18 per cent of the country's oil needs
and 35 per cent of petrol demand is met by Parco. The issue of liquidity and
circular debt is continuing to harm the energy sector, with refineries operating at 60
to 65 per cent of their capacity. Moreover, the production in the last few months
has stood at 10 to 15 per cent lower than agreed monthly commitments, putting
pressure on imports and causing delays in supply. In the wake of higher CNG
prices as well as the weekly closure of stations (or petrol pumps), petrol demand
9|Page

has also gone up, which has lead to the shortage in petrol supplies. The shortage of
petrol meant that the commodity was being sold at Rs10 to Rs20 above its regular
price, with black marketers and hoarders benefiting handsomely. Petrol shortage
does not benefit any one as the commodity has no perfect substitutes. Though LPG
suppliers gain an advantage when petrol and kerosene oil are not available, but
they are a negligible fraction of the market for petroleum

Parco Brand Analysis

Pak Arab Refinery Limited (PARCO) is marketing the products that are deficit in
Pakistan markets. Under the normal circumstances, brands need to be focused on
in minute details but due to deficit availability of the products, Pak Arab Refinery
Limited (PARCO) has managed to not only survive but also maintain a very good
reputation in market from the quality point of view.
Pak Arab Refinery Limited (PARCO) has also started marketing Lubricants and
Industrial Fuels under the brand name Pearl. Pearl Lubricants are also of very high
quality but Pak Arab Refinery Limited (PARCO) has treated this very tricky
business like it other Fuel businesses and has badly failed in achieving a prominent
position on the retailers shelves.
Industrial Fuels supplied through Pearl are also maintaining a very good reputation
due to its timely supply system and availability of the products in high demand
seasons.

10 | P a g e

Consumer Analysis
The main consumers of PARCO fuel products are the Industrial consumers and of
Lubricants are the Individual vehicle owners. The Industrial Consumers of Pearl
are very satisfied due to the availability and the professional team ready 24/7 for
services. The Industrial consumers are also satisfied with the systems PARCO has
derived for delivery without adulteration.
The consumers of PARCO are also satisfied with the Pearl Lubricants quality but
all complain of lack of awareness of the product line and lack of brand awareness
program of Pearl.

Product Line Of Pearl

Pearl Fuels
High Sulfur Furnace Oil
HSFO is the main product that PARCO is trying to dispose off through Pearl
team. Previously HSFO was supplied to the Power Sector through OMCs
like PSO and Shell. Due to the current situation in Pakistan market, the main
OMCs were buying HSFO from PARCO on credit and were not able to
make payments due to the circular debt introduced by Government of
Pakistan. Pearl made a strategy of selling HSFO to consumers directly on
advance payments or against Bank guarantees. In this way PARCO started
surviving without indulging itself into circular debt bad situation.
Light Diesel Oil
Light Diesel is one product that was previously being used for adulteration
in High speed Diesel. Pearl Team has also successfully managed to sell this
11 | P a g e

product on advance payment basis to the small Industrial consumers as well

as to the Agri consumers.
Super Kerosene Oil
SKO is one product that has a very high demand in winters season as in
most of the rural parts of Pakistan, SKO is the primary source of heating as
well as cooking. PARCO also started selling the same through Pearl on pure
cash advance basis and Pearl team has successfully managed to deliver
results as per the expectations of the management.

High Speed Diesel

This is one new product that the PARCO management decided to market
directly through the Pearl sales system. The main reason for selling this
product too thru Pearl is to avoid the horrifying circular debt system.

Circular Debt
Many critics of the sector say the government organizations are
being run with parallel standard operating procedures, with many
of them going haywire. Instead of offering 'one-window solutions',
separate 'counters' have sprung up all the way through the chain.
A lack of coordinated efforts from the government caused circular debt crises that
had led the country into the oil shortage and sever load shedding. Globally,
however, on a long-term basis, circular debt is no abnormality in the energy sector.
All that is required of governments is to ensure adequate and timely payments to
the OMCs so their balance sheets remain stable and the cycle is not disrupted.

12 | P a g e

The payment of Rs90 billion by the government to Pakistan State Oil (PSO) last
month did ease some pressure though, it is evident that it would not last longer.
It would be difficult for the government to expect capital investments from the
private sector without taking any concrete steps for better governance and
accountability. No investor would come forward unless they are offered protection
and see the potential of future returns.
There is an urgent need to re-visit our priorities and develop sustainable plans that
can be materialized before it's too late. The world economy is moving forward at a
phenomenal pace and Pakistan run the risk of being left too far behind.
Investor confidence, stringent regulations and sustainable and practical policies are
integral to move the oil refining sector in the right direction. Unless these are
issues are address - and resolved - the future of the sector looks extremely bleak.

13 | P a g e

Lubricant Competition
MAJOR OMC'S
(SELLING WITH
THE SUPPORT
OF FUEL OILS)

LOCAL
BLENDERS
(WITHOUT THE
SUPPORT OF

FUEL OILS)
SHELL PAKISTAN HY LUBE
CHEVRON
SAUDI LUBE
MASTER

IMPORTED
LUBRICANTS

(RECLAIMED &
REOROCESSED)

DUCKHAM
SONICA

SHELL
CALTEX

MOMIN
RACE TRACK

PSO
ZP

LUBRICANTS
ZAMIR SONS

ZIC
LG

PETROLEUM

HAROON OILS
WORLD

FUCHS

PETROLEUM
KEN LUBE
RACE TRACK
MEHRAN
WHITE HORSE

RS 200
GULF
MICKING
GORRILA

(WP)
UNITED

ZIPEX

LUBRICANTS
GUARD LUBE
MIAN PETROLEUM
UNION

US OILS

IRANIAN

BLACK TIGER

(APPROX 20

CHEMICALS
PETROMARK

Pearl Lubricants
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SMUGGLED

CASTROL
ELF

PSO
TOTAL ATLAS
ATTOCK

ADMORE
HASCOMBE
ASKAR OIL
ELF (TPPL)

FAKE

BRANDS

TOTAL

Pearl Lubricants can be divided into the following categories

1. Automotive
i) Gas Motor Oils
ii) Diesel Motor Oils
2. Industrial
The automotive Oils are categorized into Gas Motor Oils and Diesel Motor Oils.
The Diesel Motor Oils can also be used in several Industrial Machines. For the
purpose Pearl is also marketing these Diesel Motor Oils in Drum packing of 205
Liters. The remaining Gas motor Oils are only marketed into small packing.
Product Name

Grade

Viscosity

SPEED

SF

SAE-40

ENERGY

SF/CD

SAE 20W-50

Packing

0.7 Liter
1 Litre

1 Litre
3 Litres
4 Litres
Drum (205
litres)

ZABARDAST

CF

SAE-30

20 Litres
Drum (205
litres)

ZABARDAST

CC/SC

SAE-50

4 Litres
10 Litres
20 Litres
Drum (205
litres)

ZABARDAST

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CD/SF

SAE 20W-50

4 Litres

10 Litres
20 Litres
Drum (205

PLUS

litres)

GEARUP

GL-4

SAE-140

1 Liter
Drum (205
litres)

HYDRAULIC
PLUS

HYDRAULIC

ISO VG

68

20 Liters
Drum (205
litres)

ISO VG

46, 68, 100, 220

20 Liters
Drum (205
litres)

START F

SF/CC

SAE 15W-40

BIXXOL
Economic/
BIXXOL

1 Liter
4 Litre
1 Liter

SL/CF

SAE 15W-40

4 Litre

EXTRA

TRUCK M
PLUS

CG-4/SL

SAE 15W-40

4 Litres
20 Litres
Drum (205
litres)

DIESEL
MOTOR OIL

CD

VISION & MISSION

16 | P a g e

SAE 40

4 Litres

VISION

To be a leading national energy company of choice for all

stakeholders by employing a strategy of diversification and
integration with the right technology and adopting best
industry practices for sustained competitive advantage.

MISSION

To transport, refine and market petroleum and related

products in Pakistan in a safe, efficient, reliable and
environment-friendly

manner

maintaining

professional

excellence and ensuring favorable returns on all employed

resources
VALUES

Integrity

Teamwork

Results Orientation

Innovation & Continuous Improvement

Commitment

Courage

JOINT VENTURE (JV) PARTNERS

17 | P a g e

PARCO has the followiong strategic partnerships.

TOTAL PARCO PAKISTAN LTD (TPPL)
TOTAL PARCO PAKISTAN LTD (TPPL), is a joint venture between PARCO and TOTAL
S.A of France. TPPL is marketing consumer petroleum products through its national
network of retail outlets. At present TPPL has more than 175 retail outlets around the
country.
SHV ENERGY PAKISTAN
SHV of Holland markets 25% of PARCOs LPG production as PEARL Gas under a
Technical Services & Support Agreement (TSSA). SHV Holdings N.V is a Fortune 500,
multinational operating in FMCG warehousing, natural gas exploration, venture capital and
LPG marketing and distribution with a presence in over 36 countries. The SHV Gas
Division operates in the downstream LPG marketing and distribution business and
specializes in providing an economical, efficient and complete energy solution to industrial,
commercial and domestic users.
OMV
PARCO also markets lubricants all over Pakistan in association with OMV, Austria. OMV
an oil and gas company, engages in the exploration, production, refining, transportation, and
marketing of oil and gas. It has petrochemical properties in Austria, Kazakhstan, Libya,
New Zealand, Pakistan, Romania, Tunisia, the United Kingdom, and Central and Eastern
Europe. OMV is headquartered in Vienna, Austria.
PAK - ARAB PIPELINE COMPANY LIMITED (PAPCO)
Pak - Arab Pipeline Company Limited (PAPCO) - is an excellent example of Public-Private
partnership. Shell (26%), PSO (12%) and Chevron (11%) joined hands with PARCO (51%)
providing the US$ 120 million equity to build and operate a cross-country pipeline system
for transporting High Speed Diesel from Karachi ports to up-country locations. PAPCO was
commissioned in March 2005, comprising 817 Km of 26 dia cross-country pipeline,
storage tanks, pumps and other allied facilities. PAPCO has proven immensely successful as
the main fuel corridor for the country.

Swot Analysis
Pak Arab Refinery Limited (PARCO) has several products to sell but the main
concentration of selling is of Lubricants under the brand name of Pearl. The reason
we chose this one product is that the remaining products Pak Arab Refinery
18 | P a g e

Limited (PARCO) is selling is deficit and the company does not have to
concentrate more on other aspects.

Strengths
Country Wide Warehouses
Big Agents at major cities
Sales staff in potential market hubs
Fake oils yet not available in case of PEARL lubricants

Weaknesses
Unattractive Packaging
Short Product Line
No Price Control
No Trade Promos
Ground Level Market Share
Weak Market Pull

Opportunities
Top Tier Market
Industrial Grades
PEARL Truck Plus in small packs of 4 & 10 Ltrs
Company Run Retail Outlet Chain

Threats
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MNCs Increased focus over lube business

High Quality Imported lube oils at affordable Prices
Counterfeit
Price Hike
Reduced Margin Profit

COMPETETOR ANALYSIS
Pak Arab Refinery Limited (PARCO) has the following competitors working in
Pakistan.
National Refinery Limited (NRL)
Pakistan Refinery Limited (PRL)
Attock Refinery Limited (ARL)
Bosicor Refinery Limited (BYCO)
NRL (NATIONAL REFINERY LIMITED)
National Refinery Limited (NRL) was incorporated as a public limited
company at Karachi in 1963. Government of Pakistan took over the
management of NRL under the Economic Reforms Order, 1972. NRL is a
petroleum refining and petrochemical complex producing a wide range of
fuels, Lube Base Oils, BTX (petrochemicals), Asphalts and specialty
products for domestic consumption and export. It is located on a plot
comprising 263 acres in the Korangi Industrial Area of Karachi. The
companys plants have a fuel refining capacity of 2,710,500 tonnes per
annum (tpa) of crude oil, two lube refineries with a combined designed

20 | P a g e

capacity of 176,200 tpa of lube base oils (LBO) and a BTX unit with a
designed capacity of 25,000 tpa.
(ARL) ATTOCK REFINERY LIMITED
Since its commissioning in 1922, ATRL passed through various stages of
transformation. From batch distillation stills of 2,500 barrels per day (BPD),
today it has grown into a modern state-of-the-art Refinery with a capacity of
40,000 BPD.
VALUE ADDITION
ARL is in continuous search for value added products and has produced and
supplied Polymer Modified Bitumen (PMB).
ARL has successfully added JP-8 to its range of Jet fuel production, which
already included JP-1 and JP-4.
ARL is supplying Unleaded Gasoline, Low Sulfur Diesel and Low Sulfur
Furnace Oil to the market in line with its policy of producing more
environment friendly fuels. ARL is now targeting low benzene and low
aromatics gasoline production and further lowering sulphur level in diesel to
less than 500 ppm.
(BPL) BOSICOR PAKISTAN LIMITED
The Company was incorporated on 9th January, 1995 as a Public Limited
Company with the objective of acquiring, setting up and operating an oil
refinery of 30,000 barrels per day capacity. The refinery is situated at
District Hub, Lasbela, Balochistan, kilometers from HUBCO. The plant
consists of a Crude Distillation Unit, the Reformer Unit, the Kerosene
Merox Unit, the Light Straight Run Merox Unit, Utilities, off sites and
associated Ancillaries.
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(PRL) PAKISTAN REFINERY LIMITED

In 1959 Pakistani Investors and major oil companies joined hands to set up
the biggest oil refinery in Pakistan. In 1962, this idea was materialized in the
form of Pakistan Refinery Limited, which had a capacity to process 50,000
barrels of Iranian Light crude oil per day.

Pak Arab Refinery Limited (PARCO) is considered as a better Fuel producer in the
country on the basis of the following advantages over the competition.
Latest Refinery producing Euro 4 Standards
Government of Pakistan has emphasized on all the Refineries of the country to
avail Euro 4 standards in Oil Industry to stop the Ozone and Environment
pollution.
Own Pipeline
Pak Arab Refinery Limited (PARCO) has a very big competitive advantage
over its competition in shape of owning a pipeline network. Whereas the
competition has to depend on devastated Pakistan Railways or Road transport
for transportation of its product.

POPs and PODs

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POPS
The main points of Parity are that
Producing Oil Products
Marketing Industrial Oil Products
HSFO, LDO, HSD, SKO
Marketing LPG

PODs
PARCO is the only Pipeline company of Pakistan
Having its own Marketing wing for Industrial Sales
Marketing own LPG under the brand name Pearl
Marketing Fuel products under Brand name Pearl
Marketing Pearl Lubricants in retail Industry
Own Asphalt Plant in process of Commissioning

23 | P a g e

Recommendations
PARCO should focus on these issues:
Implement and improve training practices

Improve employee satisfaction

Improve pay/benefits

Start Promotion Campaigns

Improve the launch of the product

Be competitive in pricing

Implement a multi-source feedback system

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