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STRATEGY OF ATF

MARKETING
AJENDA
• ONGC Business & diversification .
• Aviation Turbine Fuel .
• Aviation Business scenario .
• ATF Marketing
• Model Building And Models
• Competitor Analysis for ATF
• SWAT Analysis
• IT Management in ATF business
• Conclusion
ONGC Business &
diversification .
ONGC Group of companies are

1.Oil and Natural Gas Corporation Ltd. (ONGC-the Parent


Company)

2.ONGC Videsh Limited (OVL- a wholly ONGC subsidiary


of ONGC)

3.ONGC Nile Ganga BV( a wholly owned subsidiary of OVL)

4.Manglor Refinery and Petrochemical Ltd.( MRPL-Subsidiary of ONGC)

5.ONGC Hazira plant.


Introduction of Aviation Turbine fuel
What is ATF?
CIVIL JET FUELS, Aviation turbine fuels are used for
powering jet and turbo-prop engine aircraft and are not to
be confused with Avgas. Outside former communist areas,
there are currently two main grades of turbine fuel in use in
civil commercial aviation: Jet A-1 and Jet A, both are
kerosene type fuels. There is another grade of jet fuel, Jet B
which is a wide cut kerosene (a blend of gasoline and
kerosene) but it is rarely used except in very cold climates.
CHEMICAL COMPONENT:
Aviation fuels consist of blends of over a thousand
chemicals, primarily Hydrocarbons (paraffin’s, olefins,
apothems, and aromatics) as well as additives such as
antioxidants and metal deactivators, and impurities. Principal
components include n-octane and isooctane. Like other
fuels, blends of Aviation fuel.
CRUDE DISTILLARTION UNIT Use for ATF production.
Aviation Business Scenario
• Aviation business:
Indian air transport is one of the fastest developing
aviation sectors of the world. In recent years, Indian air
transport has witnessed a boom which has given rise to the
need for improving Indian air transport .
• Aviation growth:
India International passenger numbers growth is 8.6% &
International freight Tones growth is 8.3%.
ATF is key parameter for Aviation:

1.The Fuel bill constitute 33% of their total operating


expenses whereas the Indian carriers the fuel constitutes
about 38-40%
of the operating expenses.
ATF Marketing
• Market Segmentation: In India Kerosene market divided in three
markets.
India produces around 91,07,000 tonnes ATF annually and
exports 44,86,000 tonnes.
Target Markets: Many private Indian airport operators like
DIAL,MIAL,BIAL,
etc. And foreign agencies keen to invest there lays a huge
untapped market potential for ATF.

KEROSENE MARKET

Industrial Aviation
Public distribution
Kerosene Turbine fuel
system
ATF Marketing
Private Indian Air transporter
1.Jet Airways 4.GoAir
2.Kingfisher 5.SpiceJet
3.Air Deccan

 ATF DEMAND:
Aviation turbine fuel is increasing day by day because of Aviation
industries
growth .The Passenger are traveling in domestic as well as
international which will increase ATF demand from petroleum
companies.
ONGC ATF Supply chain management.
 Supply chain management:
1.Inbound logistics (supplier)
2.Manufacturing (petroleum refinery)
3.Outbond logistics (aviation fuel station at Air port)
ONGC Expertise in handling ATF
ONGC has been handling ATF refueling at offshore location,
which are approved by DGCA, over almost three decades.
Three offshore location are like mini airports except that
dispensing systems are not mobile.
ONGC production of ATF of the required specification at
Hazira planton march 11,2007.the plant has capacity 8 10

to produce 18000 kl of ATF Per month.


2 3
5
6
8 9
11

4
7

23 18

12

13

19 14
22

15

16

21 20 17

Model for Industry Analysis
Competitive forces within a petroleum industry:
• Porter suggests there are five basic competitive forces which
influence the state of competition in an industry.
OPEC CONTRIES,
(CRUDE Threat
of new
entran
t
RIL, ESSAR

The Rivalry Amongst


Current competitors in the
industry
SUPPLIERS Customers

OIL IOCL, BPCL Aviation


SUPLLIES) HPCL, MRPL Industries
Bargain Bargainin
ing g power
power of
of customer
supplie s
rs

Substitutes
Vertical Integration
• The degree to which a firm owns its (OPEC Countries) as
upstream suppliers of crude oil and its downstream buyers
(Aviation industries) is referred to as Vertical Integration.

RAW MATERIAL
(CRUDE OIL)

INTERMEDIATE
PROCESS
(REFINARY
PROCE)
DISTRIBUTOR

END CUSTOMER
(AVIATION
INDUSTRIES)
BUYER
Vertical Integration
 Benefits of Vertical Integration:
1.Reduce transportation costs if common ownership results in
closer geographic area.
2.Improve supply chain coordination.
3.Capture upstream & downstream margin
4.Facilitate investment in specialized assets in upstream and
downstream
 Drawbacks of Vertical Integration:
1.Capacity balancing issues. The ONGC may need to build
excess upstream capacity to ensure that its downstream
operation have sufficient supply also taking care of its customer
( HPCL,BPCL,IOCL).
2. Potentially higher costs due to high investment which
required (ROI) in small time span.

3. Decreased flexibility due to previous upstream investment.


Competitor Analysis for ATF

 Competitor ANALYSIS:
• ONGC Ltd. Faces competition from both other Oil PSU’S like
IOCL, BPCL,HPCL and Private players like Shell India,
Reliance, Essar Oil etc. A through analysis of these
competitors is as follows.
1.Market share
2.Brand Image
3.Product Quality
4.Fuel services
5.Fuel station Infrastructure
6.Value Added services
SWAT Analysis
• STRENGTH:
1.ONGC has a Market share of above 80% crude oil and
natural gas exploration and production.
2.ONGC has huge Assets of technical and managerial
resource which can help them of new retail business.
3.ONGC can use there transportation facility for there
refinery which reducing operating cost.

• WEEKNESS:
1.ONGC is relatively New entrant in Oligopolistic sales
market. They have less experience in Retail marketing
compare with other.
2.ONGC does not have excess to ATF & even Fuel filling
infrastructure at Airport which can help ONGC to have
marketing tie up with numerous Airlines.

3.ONGC has not have full fledge set-up for marketing of ATF.
Continued
• OPPORTUNITY:
1.ONGC can use MRPL Shell venture to market ATF.
2.Reducing cost economizer. 3.By
reducing supply of kerosene in PDS it can produce more ATF.

• 4.Demand of ATF in northern region of India –HPCL,BPCL,


have shown their willingness to source ATF from Hazira
and that can be transported by Rail.
• THREATS:
1.ONGC ATF products depends on requirements of
kerosene by OIL Marketing companies for PDS( Public
distribution system)
2.Presently import duty on ATF is higher as compared to that
on Kerosene for PDS( Zero custom duty)
IT Management in ATF
business
• IT Management:
Information technology (IT) and fuels
management system can provide a means to make these
processes more accurate and more efficient ,ultimately
reducing operating costs and improving on-time
performance at the ramp. 1.The
Paperless Electronic Fuel Ticket Solution .
2.The Wireless Revolution.
3.Moving Forward and Selecting a solution.
4.Database management system for various data related
of FUEL requirement. (Daily, Weekly, Monthly ).
5.SAP Solution for fuel management.
Conclusion

ONGC is benefit for them that crude oil use for there own
refinery for Petroleum production. The ATF production &
marketing is help for
to increase the profit of company. Also ONGC can used
Aviation fuel
for there own Helicopters for man & machines transportation
for offshore operation which reducing operating costs of the
company. By increasing production and sell it at domestic
market will increase the profit ratio.