Transforming
NP
By Sandra Chouthi
Business Guardian
Port
Spain
Petroleumworldtt.com
07 01 07
This CEO likes to lead by example.
So how does Michael Callender of National Petroleum
Marketing Company Ltd (NP) do that?
He goes to the Tragarete Road service station
and pumps gas for two hours.
He wishes customers a pleasant morning or afternoon
before asking how much gas they would like to get.
He did that for a couple of Saturdays for a couple
of hours.
On
one occasion, he got a $5 tip from “a
group of about five rough-looking men.”
He put it in the kitty for the employees.
“They said they like what they are getting,” Callender
said.
Impressed
customers asked of the red-shirted attendants, “who’s
he?
They’d reply, “he’s
the CEO.”
In
an interview at NP’s Sea Lots offices,
Beetham Highway, last Friday, Callender said of
the attendants at the Tragarete Road station, “Everytime
they see me, I try to do something positive to
motivate them.”
He
said consumers can’t be happy with the
quality of service they get at service stations.
“We certainly are not. We also recognise
that having a modern service station network is
good, is important. But the quality of service
that you get in a service station is equally important.
You don’t want to go into a brand new station
and not get good service.”
Part of the challenge NP executive faces comes
from Cepep.
“When you have things like Cepep out there,
they gravitate from having to work long hours in
a service station to go outside. I’m not
sure how productive they are, but they get more
money.”
As an option to having an attendant pump their
gas, NP has installed six card readers in dispensers,
known as Crind, at the Tragarete Road station.
“We
are working out the interface with our bankers
and with Radiant (Systems) in the United
States.”
Each card-reading dispenser costs $80,000.
Callender said first-world service stations have
moved to card-reading dispensers.
“In a service station in the United States,
you don’t see an attendant.
“You
either give your card inside or put your card
into the machine, punch in $20 and pull
out your card. Efficiency.”
The Tragarete Road gas bar is selling more gas
than expected, the chief executive said.
With wide aisles that allow easy entry and exit,
the station sells 12 million litres of fuel annually.
The original projection: eight million litres.
Enter the car mall
Look ahead to the introduction of acre-sized service
stations that will operate like a car mall.
In other words, the gas bar will have alongside
it complementary businesses.
Callender said NP will be partnering with a private
entrepreneur to create a car mall later this year.
“A station like that will probably cost
in the order of $12 million,” he said.
“We
will, in fact, have the wholesale agreement.
We will have a long-term agreement with them
to
supply fuel, pumps and underground storage tanks.
They will do the rest.
“In
the future, you will see a lot of service station-type
businesses getting into businesses
that are complementary. You see it in the United
States. It is a means of getting private sector
involved.”
Subsidy on diesel and gas
The annual fuel subsidy is about $2 billion, NP
officials say.
Petrotrin sells NP fuel at world market prices.
The subsidy goes to Petrotrin.
“We are in a price-regulated market. The
price at the pump is fixed. At least for the time.
I’m not too sure how long into the future
that will continue, but at this time it’s
fixed.”
Does the high price oil fetches internationally
make paying the subsidy easier?
Garnet
Redwood, NP’s divisional manager
of technical services, said most of the subsidy
is paid on diesel.
“It is the lowest in the world,” Redwood
said, referring to the $1.50 per litre price of
diesel at local service stations.
Changing the model
last year, NP sold 175 million litres of diesel
mainly to transportation vehicles, maxis and
taxis, said Angelita Cattine, retail sales manager.
Even
though the company’s two aging tug
boats, which are used to transport fuels from the
Petrotrin refinery at Pointe-a-Pierre, have been
non-functional for the past two years, NP has been
spending $15 million annually to pay up to 35 workers
to do “basic maintenance” on them.
“We
still have the manpower for them,”
“They
will be going home shortly.”
Really?
“Yes.
They have been on the vessels for the last two
years.”
Doing what?
“Basic
maintenance.”
“Once
they are on the water, you have some basic things
to do.”
Does that make sense to you?
“No. That’s why we’re
changing that.”
Callender said the Government has mandated NP,
Petrotrin and the National Gas Company (NGC) to
meet and discuss the laying of a pipeline from
Petrotrin in Pointe-a-Pierre to a central facility
somewhere south of the Caroni.
This
would involve using NGC’s existing
pipe path, storage and a gantry to service the
north and east/west Trinidad.
Petrotrin
is expected to have a new, modern gantry at the
Gasparillo gate at Pointe-a-Pierre for south
Trinidad’s fuel needs.
The
boats—the NP Unity and The Enterprise—are
to be sold by public auction.
“Particularly
with the pipeline coming within the next two
years, we have received the approval
of the shareholder to sell the vessels, which we
are going to do very shortly, before the end of
the year, and we are also going to be terminating
within the next year-and-half the water transport,
which moves product from Pointe-a-Pierre to Sea
Lots.”
NP currently pays $30 million annually to an American
owned, Bahamas-based company to ship fuel from
Petrotrin to Sea Lots.
“The
intention is to eliminate water transport as
quickly as possible.”
Whither NP-operated
Quik Shoppes?
NP loses $2 million annual from its 13 Trinidad-based
Quik Shoppes due to theft.
Callender
said they can be profitable if it’s
not run by a state enterprise, but rather private
entrepreneurs.
“The
convenience store model is a good model that
makes money if it is a private entrepreneur
doing that, not a state company.”
Why?
“Shrinkage. Can’t control it. It’s
not for state enterprises. Private enterprise,
where you have your people manage it. Excellent.”
He said despite the installation of the latest
equipment to keep track of inventory, decreasing
the incident of theft is very challenging.
“We
are right now making a recommendation to change
the model.”
Are they making a profit?
“The
convenience stores? Right now? No.
“The
level of loss is about $2 million a year. We
are changing the model because this model
does not work for us.
“The
convenience stores can make a lot of money, but
it is not for a state company to run.
Give it to a dealer to run.
“We recognise that, we’ve recommended
that and that’s the way we are going. And
it will be positive for everybody. The dealer will
make money and we will make money.”—SC
Upgrades and remediation
State-owned National Petroleum Marketing Company
Ltd (NP) is in transformation mode.
Presently, five stations are closed for upgrade.
Wrightson Road
Beetham
St Augustine
Carousel, Cocoyea
Point Fortin
Upgrade means demolition of the existing station
and replacement of the underground tanks with double-walled
tanks of much increased capacity (10,000-15,000
gallons) and building a new modernised facility.
Nine stations will benefit from a fuel system
upgrade:
NP Arouca
NP Valencia
Tabaquite
Manzanilla
Guapo
San Raphael/ Talparo
Fyzabad
Penal
Plymouth, Tobago
The upgrades to the fuel systems at Arouca and
Penal are expected to be completed by month’s
end.
NP is awaiting clearance from the Environmental
Management Authority (EMA) to begin work at the
Plymouth (Tobago) and Manzanilla stations.
The Sattar service station in Princes Town is
under remediation, following which, new tanks and
dispensers will be installed.
NP says that the Sattar dealer is responsible
for the improvement of physical building and equipment
on site.
And that the dealer who owns the station next
to Sattar closed it down following a robbery.
Currently underway is a full upgrade of the NP-owned
Radica Persad station in Craignish Village, Princes
Town.
The upgrade and remediation programme will run
for three years.
NP
CEO Michael Callender said, “by that
time, we’d have a completely rationalised
service station network which is modern and which
is what the public of T&T want. It is something,
as Trinidadians, I think we’ll be proud of.”
Callender said the upgrade is being funded by
the Government.
“The dealer-owned and operated stations,
we are financing that through a bank, First Citizens.
We got a preferred offerer. First Citizens is doing
the first tranche of financing for us—$20
million.
“In
the service stations we are utilising the funding
for, we are not using more than $3
million a site.”
Garnet
Redwood, NP’s divisional manager
of technical services, said contractors who responded
to NP’s advertisement for projects submitted
prices which he found to be up to ten per cent
higher than expected.
Redwood said prices have been coming down lately.
“I think the competition is biting into
their profit take. Competition, the number of stations
we are doing and the number of contractors we are
inviting on a rotational basis to bid on these
jobs,” Redwood said.
Business Guardian
Thursday 28th June, 2007
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©2007 Trinidad Guradian. All Rights Reserved.
