Petrolimex station in Hanoi. Photo by Can Dung
Twenty years ago on September 1, 1990, the petroleum retail enterprise of the Petrolimex Company Zone I officially became operational. With an initial eight retail petrol stations, the enterprise has developed a strong chain of 68 petrol stations to meet more than 40 percent of the demand in Hanoi.
Trade and Industry - The Petroleum Retail Enterprise on September 17 organised a ceremony to mark its 20th founding anniversary and receive the State’s Labour Order, second class.
Developing its retail network
Established in the early time of the transitional period from the centralized and subsidized mechanism to a market management mechanism, the petroleum retail enterprise initially operated with only 100 employees and backward equipment. Receiving instructions from the Vietnam National Petroleum Corporation (Petrolimex), and particularly direct guidelines from the Petrolimex Company Zone I, the Party Committee and the Board of Directors of the enterprise saw that “demand for petroleum for production and daily activities in the capital city will soar and retail sales will occupy an important role in economic activities with constantly growing demand”. Accordingly, in 1993 when the State officially abolished petroleum quotas, the enterprise began the urgent task of accelerating the development of its retail petrol stations.
Acting with dynamism and creativity, the enterprise quickly established dozens of retail stations and developed all of its existing petrol stands into stations equipped with modern facilities. As a result, by the end of 1995, the enterprise had set up a total of 39 petrol stations with equipment that could ensure environmental compliance and prevent fires in the heart of Hanoi’s inner and outlying districts.
Petroleum station No. 85 on Nguyen Van Cu street in Hanoi’s outlying district Gia Lam has been upgraded and expanded to meet international standard. Photo by Can Dung
Between 1996 and 2000, a fierce competition emerged among wholesale petroleum traders and petroleum agents as the sector saw the participation of new petroleum importers and traders like the aviation petroleum company, Petec and PetroVietnam. And since Hanoi included petrol stations in its infrastructure planning, a number of stations had to be moved or cease operation due to land lease expiry. Accordingly, the enterprise leaders sought solutions to deal with the situation and to continue expanding outlets while at the same time speed up the upgrade of existing stations and diversify sale methods.
To maintain its market share and promote the Petrolimex trademark, the enterprise has, as instructed by Petrolimex and the Petrolimex Company Zone I, stepped up the application of technological advances for its retail petrol stations, including the use of accurate, automatic Tatsuno petrol dispensing pumps to help reduce losses. Taking a variety of bold and simultaneous measures, the enterprise’s sales have risen sharply by 10-15 percent year on year and the living condition and incomes of its staff have been improved considerably. By 2000, the enterprise had a total of 42 stations in Hanoi and sales rose 1.4 times over 1995 to meet over 80 percent of petroleum needs in the Hanoi.
Competing through prestige and quality
In the 2001-2010 period when national and global economies faced numerous fluctuations, the competition among 11 key petroleum importers became fiercer. During the time, the Government stipulated a series of policies with the aim of gradually perfecting the management mechanism over the petroleum trade, including Decision 187/2003/QD-TTg and Decree 55/2007/ND-CP. Later, it issued Decree 84/2009/ND-CP on oil and petrol trading that made the petroleum trade operate in line with market mechanisms and allowed petrol businesses to set their own selling prices. These policies had clear effects on the effectiveness of the enterprise’ s business later on.
Many companies joined in the trade of petroleum during this time resulting in the rapid expansion of petrol stations. From 42 petrol stations, or 46.6 percent of the total of 90 petrol stations in the capital city in 2000, the enterprise had 44 stations, or 39 percent of the total 113 petrol stations in 2005. In 2010, the enterprise has 68 out of 233 petrol stations in Hanoi.
To maintain its leading role in the field, the enterprise has always placed importance on investing and developing its retail network, applying scientific and technological advances in management and business, and modernizing its technical and material facilities. This move has been regarded as the key to ensuring the enterprise’s sustainable growth. As a result, many stations were built using new, cutting-edge technology. Existing stations have constantly been upgraded, their storage capacity has been enlarged, and their equipment has been modernized to ensure environmental protection standards, create favourable conditions for sale activities, and improve employees’ working conditions. Such constant upgrades have helped raise the quality of the enterprise’s services and its turnover. As a result, all of the enterprise’s stations posted a sale growth rate of 30 percent to 300 percent.
The enterprise has also attached importance to applying IT in management. It has deployed an automatic measuring system to monitor dispensing pumps at all of its stations. It has put into use the Internet-based communication infrastructure with Edocman applications to manage documents, perfected a system of using cards for purchase of petrol, and deployed the use of Flexicard services.
In addition, it has applied new sale forms, including direct retail sales, pre-paid and post-paid sales, and sales with “mobile coupons”. Significantly, the enterprise has carried out a “petroleum card” project. To date, 220 offices and businesses have used Flexicard for buying an average volume of 1,400 cu.m of petrol worth over 20 billion VND a month.
During the past 20 years, the enterprise has marched side by side with Hanoi in its renewal and it has always played the key role to stabilize the petroleum market in the city. Even when oil and gas prices in the world market surged and many petroleum traders faced losses and reduced both their imports and sales, causing instability in the market, the enterprise has always, as directly instructed by the Petrolimex Company Zone I, ensured the supply of petrol for consumers. Accordingly, though accounting for just 30 percent of the total petrol stations in Hanoi, the enterprise made up over 40 percent of the retail market share.
With these achievements, the enterprise’s staff has been awarded with many prizes from the Party, the State, Government ministries, central agencies and Hanoi authorities. Particularly, they received the State’s Labour Order, second class, on the enterprise’s 20th founding anniversary./.