INTRODUCTION Post Independence, India was grappling with grave socio-economic problems, such as inequalities in income and low

levels of employment, regional imbalances in economic development and lack of trained manpower, weak industrial base, inadequate investments and infrastructure facilities, etc. Hence, the roadmap for Public Sector was developed as an instrument for self-reliant economic growth. The country adopted the planned economic development polices, which envisaged the development of PSUs. The government-owned corporations (defined in section 617 of the Companies Act, 1956) are termed as Public Sector Undertakings (PSUs) in India. In a PSU majority (51% or more) of the paid up share capital is held by central government or by any state government or partly by the central governments and partly by one or more state governments. Public Sector Undertakings (PSUs) can be classified as Public Sector Enterprises (PSEs), Central Public Sector Enterprises (CPSEs) and Public Sector Banks (PSBs). Department of Public Enterprises gives the status of Maharatna, Navratna, Miniratna to Central Public Sector Enterprises (CPSEs). Maharatna: A company qualifying for the Maharatna- status should have an average annual turnover of Rs 20,000 crore during the last three years against Rs 25,000 crore prescribed earlier. The average annual net worth of the company should be Rs 10,000 crore. Navratna: The Central Public Sector Enterprises (CPSEs) fulfilling the following criteria are eligible to be considered for grant of Navaratna- Having Schedule 'A' and Miniratna Category-1 status or having at least three 'Excellent' or 'Very Good' Memorandum of Understanding (MoU) ratings during the last five years. The Navratna status empowers PSEs to invest up to Rs. 1000 crore or 15% of their net worth on a single project without seeking government approval. In a year, these companies can spend up to 30% of their net worth not exceeding Rs. 1000 cr. They also enjoy the freedom to enter joint ventures, form alliances and float subsidiaries abroad.

Miniratna: For Miniratna category I status, the CPSE should have made profit in the last three years continuously, the pre-tax profit should have been Rs. 30 crores or more in at least one of the three years and should have a positive net worth. For category II, the CPSE should have made profit for the last three years continuously and should have a positive net worth. Miniratnas can enter into joint ventures, set subsidiary companies and overseas offices but with certain conditions. This designation applies to PSEs that have made profits continuously for the last three years or earned a net profit of Rs. 30 crore or more in one of the three years. Miniratna Category-II CPSEs- Category II miniratnas have autonomy to incurring the capital expenditure without government approval up to Rs. 300 crore or up to 50% of their net worth whichever is lower. (Public Sector Undertakings in India)Bharat Pumps and Compressors Ltd have been placed under category-II. (PTI, 2009) Department of Heavy Industry (DHI): The Department of Heavy Industry is concerned with the development of the engineering industry viz. machine tools, heavy electrical, industrial machinery and auto industry and administers 32 operating CPSEs. The CPSEs under the Department are engaged in the manufacture of engineering/capital goods, consultancy and contracting services. (Department of Heavy Industries Website)

Bharat Pumps and Compressors Ltd.

Overview: Bharat Pumps and compressors Ltd. (BPCL) (A Public Sector Undertaking under the control of Ministry of Heavy Industries & Public Enterprises, Govt. of India), was set up in the year 1970 at Naini, Allahabad as an import substitution unit for manufacture of sophisticated process pumps and compressors for core sector industries, which were hitherto being imported by them. The company is engaged in manufacture and supply of heavy duty pumps & compressors and high pressure seamless and CNG gas cylinders / cascades to cater the needs of oil exploration & exploitation, refineries, petro-chemicals, chemicals, fertilizer and down-stream industries. (Bharat
Pumps and Compressors Ltd. Website)

Vision: To become an Indian MNC in the field of fluid handling, Gas Compression, gas storage Equipment, services and project management.

Mission: To provide quality products and services to core sector industries with especial thrust on Oil and natural Gas, Petrochemicals, Refineries, Nuclear and thermal power plants, Fertilizers and Public Transport Services complying to health and safety norms.

Objective: To increase market share of our product and services. To maximize customer satisfaction by providing quality products and services within stipulated delivery. To increase the business of spares and rendering prompt after sale services including refurbishment. (Bharat Pumps and Compressors Ltd. Website)

Board of Directors P K Verma Chiarman & Managing Director Dinesh Kumar Director (Nominee Of Govt. Of India)

Ashok Anand Non-Official Part Time Director

Sanjay Gupta Director (Nominee Of EIL)

N. C. Sridharan Non-Official Part Time Director

Devendra Raina Director (Nominee Of BHEL)

Chairman and Managing Director P. K. Verma (Additional Charge w.e.f. 2nd Sept, 2013)

Key Executives Manish Sahu Chief Vigilance Officer Sudhakar Chief General Manager (FS, ROs & CSR) Mohd. Shahabuddin Deputy General Manager (Marketing) Rajendra Roy Deputy General Manager (HD) & Chief Welfare officer G. K. Pandey Deputy General Manager (Technical) Indrasen Singh Deputy Company secretary (Bharat Pumps and Compressors Ltd. website) Product Portfolio BPCL offers a large range of heavy products that are sub-divided in 3 major divisions which are: J.P.Sinha Deputy General Manager (Spares Business) Anoop Kumar Mitra Special Assistant to CMD & Deputy Manager K.C. Joshi Chief General Manager (Works) D. K. Patel General Manager (PEX & MM) Anuj Kumar Sinha Deputy General Manager (Delhi Office) A.K. Pandey Deputy General Manager (PDD-CDE)

1- Pumps
I. Centrifugal Pumps BPCL offers a wide range of centrifugal pumps conforming to latest API 610 edition for refineries, Petroleum Industries and also for Nuclear Power Plants etc. Range offered: Maximum Power: 2500KW, maximum Pressure: 140 Kg/cm2 & maximum capacity: 12,000 M3/Hr Pumps are suitable for handling fluids such as hydrocarbon, Naphtha, LPG, Carbonate solution, boiler feed water, Benfield solution, alkaline and acidic solution, ammonia liquor, petrochemicals etc. II. Reciprocating Pumps BPCL designs and manufactures custom built Reciprocating pumps conforming to API 674 latest editions available for wide range of applications.
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Range offered: Maximum Power: 1700 HP, maximum pressure: 675 Kg/cm2 and maximum capacity: 315 M3/Hr Pumps are suitable for handling drilling mud, Cementing slurry, crude oil, steam condensate, heavy water, fatty acids, ammonia carbonate, liquid ammonia and liquid wax effluent water etc.

2- Gas Cylinders
I. High pressure Industrial Seamless Gas cylinder BPC manufactures high-pressure industrial gas cylinders for storage of gases like oxygen, argon, hydrogen, nitrogen, methane, helium, air, carbon dioxide, nitrous oxide etc. Range: 62 liters water capacity. Filling pressure: 280 Kg/ cm2 II. CNG on board cylinders (part I) Range: Water Capacity 20 to 200 liters, diameters: 232 mm to 406 mm, filling pressure: 204 Kg/cm2 and test Pressure: 340 Kg/cm2 CNG Cascades: IS 7285 (part II) Range: Water Capacity 500 to 45,000 liters, filling pressure: 255Kg/cm2 and Test Pressure: 435 Kg/cm2

3- Compressors
The company is engaged in manufacture and supply of heavy duty pumps & compressors and high pressure seamless and CNG gas cylinders / cascades to cater the needs of oil exploration & exploitation, refineries, petro-chemicals, chemicals, fertilizer and downstream industries. BPCL designs and manufactures custom built reciprocating compressors as per API 618 latest edition. Range offered: Maximum Power: 4000KW, Maximum Pressure: 450 Kg/cm2 and Maximum Capacity: 70,000 NM3/Hr Compressors are suitable for handling gases like air, nitrogen, carbon dioxide, hydrogen, hydrocarbons, ammonia, synthesis gas, coal gas, natural gas, LPG etc.

Capabilities of BPCL Engineering Capabilities: The backbone of our engineering capabilities is our highly dedicated and professional engineering team using the latest technology and computer aided tools for design, system analysis, thermal calculations, electrical and operational control etc. Manufacturing Capabilities: We have most modern and sophisticated in-house facilities under one roof for machining, heat treatment, fabrication, inspection and assembly and testing of entire range of our products. In House Testing and Inspection Capabilities Chemical Testing Metrology Non-Destructive Testing Facilities Mechanical Testing Metro graph Lab Quality Control Facilities

(Bharat Pumps and Compressors Ltd. Website)

Capital Structure Authorized: 6500000 Equity Shares of Rs1000/-each Issued, Subscribed & Paid Up: 5, 35,310 fully paid up Equity Shares of Rs 1000/- each Of the above, 1588 equity shares were allotted as fully paid without payment having been received in cash being shares allotted against by

expenditure
Source: CMIE prowess and annual report BPCL 2009-13 Graph-1

incurred

Government of India prior to formation of the company. Out of the total fully paid up equity shares, 5, 35,309 fully paid equity shares of Rs 1000/- each are held by the President of India through nominee (previous fully paid equity shares were held by the President of India through nominee). Projected Capital for Financial Year 2013-14 is Rs. 187.85 Crore
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SALES TURNOVER Sales The sale turnover has fallen in recent two years (as from the Graph-1) because of the cut throat Competition and low orders from the Market .
100 0 2008-09 2009-10 2010-11 2011-12 2012-13 Graph-2 300 200 236.36 271.12 210.21 152.15 180 Rs in Cores

Source: CMIE prowess and annual report BPCL 2009-13

NET PROFIT The Net Profit have been dwindling over the last five years, from the year 2008-09 company was making Profit till 2010-11 but during the financial years i.e. 2011-12
3000.00 2500.00 2000.00 1500.00 1000.00 500.00 0.00 -500.00 2565.00 1856.00 953 8.66

Net Profit

In Rs. Lacs

company is incurred losses and a very nominal profit in 2012-

2008-09

2009-10

2010-11

2011-12

2012-13

Source: Annual report BPCL 2009-12 and M.O.U

Graph-3

13(estimated figure from MOU 2013-14) because of high employee overhead cost and low demand of products and order from the market. (Annual Reports BPCL 2010-12, CMIE Prowess)

Clients Profile International Lavan Refinery, Tehran (Iran)

National Oil and Gas Sector:

IOCL Bharat Petroleum Corporation Ltd. Bharat Oman Refiner Ltd. Numaligarh Refinery Bongaigaon Refinery Petrochemicals Ltd.

HPCL ONGC CPCL Oil India Limited.

Nuclear Power:

Department of Atomic Energy Bhabha Atomic Research

Nuclear Power Corporation Ltd.

Fertilizers and Chemicals:

Hindustan Fertilizers Corporation Ltd. Indian Farmers and Fertilizers Corporation Indo-Gulf Fertilizer & Chemicals Gujarat State Fertilizer Corporation
(Bharat Pumps and Compressors Ltd. Website)

Mangalore Chemicals & Fertilizers. Rashtriya Chemicals & Fertilizers

National Fertilizers Ltd.

Objectives of the Study The objectives of the study are to:i. ii. Learning The Case Writing method and Project Appraisal. Understand the operational structure of Public Sector Enterprise and Bharat Pumps and Compressors Ltd. iii. iv. v. To get acquainted with style of PSEs functioning and BPCL. Study the intent and broad vision behind establishment of various PSEs and BPCL. Explore various competitive and distinctive advantages of BPCL over their industry peers. vi. vii. Analyze and compare the key performance indicators of BPCL. Study the style of functioning of BPCL due to which it had Turnaround through the winds of change. viii. Analyzing the growth and contribution of BPCL to the Indian & International Manufacturing Industries of Capital Intensive Product and to makers of Steel, Cement Industry. Research Methodology Objective of Research: The main objective of the research is to find the ground reality of the Turnaround strategy and the futures prospects of growth of the BPCL in context with its competitors. Collection of Data: Data was collected from secondary sources such as by visiting the Organization i.e. BPCL, journals, Books, Company websites and other websites, reports, Centre for Monitoring Indian Economy, Company & Competitors Annual Report etc. Evaluation and Analysis of the Data: The data collected is analyzed through various methods such as financial ratios and other statistical tool. Comparison has been made with company itself (year wise) and also with Competitors- Everest Kanto and KSB pumps. The presentation style is
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of case study for the Analysis. Some data collection has also been done by visiting organization BPCL, talking with employees, executive and Plant Visit to know the reality of its Turnaround. Preparation the report: The Case Study format is being followed for the preparation of the Report. The report will be presented in a condense form but with detailed information keeping the world limit as provided by the mentors. Competition BPCL is the group of heavy metal industry and deals in the three different segments i.e. Pumps, Compressors and Cylinders and have no direct competitor. For competitor analysis two different companies are chosen which are Everest Kanto Cylinders and KSB Pumps for two segments. Everest Kanto Cylinders is accredited with various quality and technology standards such as ISO 9001:2000 awarded to it in the year 2006, other certifications are SGS that is awarded to it in the year 2003. The Company has taken a major step by installing a state of the art Effluent Treatment Plant (ETP) in its Kandla SEZ plant. This makes it very eco friendly and at the same time it saves substantial resources. It also has made a significant use of robotic technology. (Everest Kanto Cylinders Website) In comparison to this BPCL is accredited with Integrated Management System Certification having ISO 9001-2008, ISO 14001:2004 and OHSAS 18001-2007. Company accredited with API 7K license of manufacturing Slush Pump Components. Company also holds the certification of ASTM. BPCL is committed for continual upgradation and design improvement of its products to face stiff competition in the market and also for meeting objective of client satisfaction. They have made the development in: 1. Upgraded software Caesar II 5.10 for pipe analysis. 2. 3-D modeling in place of 2-D drafting. 3. External speed reduction gear. 4. Company has so far spent Rs 66.55 crore till 2012 in capital expenditure from 2007-2008. KSB teams up with scientific institutions to research new materials and technologies for pumps, valves and systems. The objective is to create state-of-the-art equipment offering optimum

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component reliability. In collaboration with universities and research institutes, KSB investigates:

Metallic materials for pump casings or valve bodies Ceramic, diamond and carbon materials for bearings

In its research, KSB makes use of the modern resources of chemical analysis as well as metallographic and mechanical examination methods. (KSB Pumps Website) BPCL holds a 3.5% market share in cylinder segment when it is compared to Everest Kanto which holds around 70% market share in 2011. And in Pumps segment BPCL holds 1.11% in 2005 which declined to 0.76% in 2011 and KSB holds 7.28% in 2005 and in 2011 they hold 5.38%. (CMIE Prowess) EKC manufactures a wide and versatile range of high pressure seamless cylinders which are Industrial Gas Cylinders, CNG Cylinders, CNG Cylinder Cascades, Jumbo Cylinders and Skids. KSB pumps offer a wide range of pumps such as CPK, MEGACHEM, RPH, CHT/R, Submersible Motor Pumps, Mega Multitec, HDA. BPCL when compared to EKC it have similar product profile except jumbo cylinders, and its comparison with KSB shows that BPCL have only specialize in production of two types of pumps. EKC key customers are Praxair, BOC India Ltd, Inox Air Products Ltd, Advanced Silicon , Mahanagar Gas Ltd, Indraprashtha Gas Ltd, Bhagyanagar Gas Ltd, Gujarat Adani etc. overall a range of 19 customer in 2011. KSB pumps have no major clients as it deals in normal consumer market pumps. BPCL customer ranges from diversified sectors crossing a figure more than 30 major clients as described in company profile.

Financial Gearing BPCL Share Capital remains at Rs 53.53 crore in at end of F.Y 2011-12 but there is a slight reduction in the Reserve and Surplus which stand at Rs 86.69 on end of F.Y2011-12 against Rs 87.77 crore in 2010-11. The slight reduction is because of loss during the year of Rs 0.91 crore. BPCL has borrowed (Secured-Long Term Borrowing) Rs 16 crore from Bharat Heavy Electricals Ltd during the year 2011-12 carrying interest rate to Bank Rate. It has also paid off its unsecured borrowings from ONGC Ltd of Rs 8.30 crore which means they have borrowed from
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BHEL to pay off to ONGC Ltd and other Current Maturities of long term debts. The total of other current liabilities has been brought down to Rs 44.46 crore as at 31 March, 2012 as against the Rs 63.54 crore as at 31 March 2011. Overall there has been increase in the interest bearing loan in the Books of BPCL, so there can be burden of high finance cost in the coming years. Working Capital Management has also been the major issue for the organization because it has to procure raw material from suppliers for its production and the delivery of product has to be made after a long time span. For this, the State Bank of India has increased the Cash Credit limit to Rs 25 crore from Rs 12 crore. The company also has a policy of 60 to 90 days delay payment to its vendors. It also tries to secure advance amount from the buyers to meet out the Working Capital requirement. (Annual Report BPCL 2011-12) The reasons for the decline in the profit in F.Y. 2011-12 are: Slow growth in the market and less capital investment made by the heavy capital industries, so sluggish demand from the buyers. High cost of manufacturing because of old technology and less efficient operational effectiveness such as Total Quality Management etc which makes them incapable to defend with competitors. High employee Cost is also the reason for the decline in profit because of Sixth Pay Commission. The employee overhead cost increased 7% from 60.72 crore in 2010-11 to Rs 65.19 crore. The share of raw Imported material and has
1200.0 991.8 804.5 800.0 668.1 600.0 579.7 517.9 367.2 241.1 200.0 174.3 514.0 395.0 236.7 480.7 Imported Indigenous

Indigenous

increased from 2006-07 to the 200910 due to increase in the production of the company but it has shown the downward trend in the year 2010-12. The percentage of imported raw material has also increased over the national raw material consumed. Company has an increasing reliance on international components in

1000.0

400.0

0.0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Source: CMIE prowess and annual report BPCL 2010-12

Graph-4

manufacturing the product.

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Human Resource Management in BPCL Since the turnaround number of employees of BPCL has been continuously decreasing. In the year 2005-06 number of direct employees were 1233 which reduced to 1077
6

Value Added per employee in Rs Lacs

12 10.07 10 8 5.06 6.69 9.19 8.97 7.02

in 2009-10 and 888 in the year 2012-13. As on date 21st November 2013 number of female employees were 24, male employees were 805 and 350 were contractual workers.
(Interview at BPCL, 2013)
4 2 0

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

Main reason as

Source: CMIE prowess and annual report BPCL 2010-12 Graph-5

described in interview was the restriction on hiring of new employees from Central Government. Since the turnaround amount of salary, wages and benefits increased about 200% from Rs 24.838 crores in 2005-06 to Rs 44.74 crores 2008-09 due sixth pay commission in PSEs and in the year 2011-12 this amount increased to Rs 62.67 crores. Value Added per employee has been increasing since the year 2005-06 which is Rs 4 Lacs to Rs 10.1 lacs in the year 2009-10 but it has reduced to Rs 7 lacs in the year 2011-12. The average age of employees in the organization is around 45 years. (Nandan, 2013) PBDIT to employees cost has been increasing from Rs 0.9 lacs in 2005-06 to Rs. 1.2 lacs in the year 2009-10 but it has drastically reduced to Rs. 0.1 Lacs in the year 2011-12 due to low profitability in the consecutive two years 2010-12.(Annual Reports BPCL 2010-11 and 2011-12) In the last seven year (2005-11) there is only once the hiring of new employees is done which is of 16 employees in the year 2008-09. Otherwise there is the decline in number of employees due to retirements of existing employees and no new recruitment. Energy Consumption Energy Audit was conducted in the year 2007 by Academy of Conservation of Energy, Vadodara. Many steps were undertaken after that and a capital outlay of Rs 10 Lacs was made, various types of instruments were purchased and other in-house works were also undertaken. Capacitor Banks were installed in the company in addition that has been able to save energy to the tune of Rs 17.28 Lacs which is of recurring nature. Since then the power factor was maintained above 0.90 as per recommendation.
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40 35 30 25 20 15 10 5 0 7.7 6.6 16 16.1 21.4 14.1 8.4 6.2 22

36.25 31.5 25.6 24.1 24.7 22.2 19.3

Electricity (purchased) Rs. Million

BPCL

meets

its from

energy three

requirement

different sources which are

Furnace oil Rs. Million

18.3

Electricity

Purchased,

Electricity through generator and

Electricity (through diesel generator) Rs. Million

Furnace

oil.

Unit

consumption from all three sources has increased through the year which show a sign of expansion as the unit cost of

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Source: CMIE prowess and annual report BPCL 2010-12

Graph-6

electricity has not increased at the same rate. The Unit electricity purchased in 2005-06 was 29.30 lacs which increased to 33.57 lacs units in the year 2008-09 and in the year 2011-12 it touched 38.47 lacs unit.(CMIE Prowess) As depicted in the above graph energy consumption level in terms of Rupees has increased over the years but use of furnace oil has shown a tremendous increase over other energy sources and it surpassed other energy sources in the year 2011-12.

Technology BPCL is committed for continual up-gradation and design improvement of its products to face stiff competition in the market and also for meeting objectives of client satisfaction. The progress made in some important areas of technology up-gradation, design and development in recent years include: Upgraded software Caesar II 5.10 for pipe analysis work has been acquired and is being utilized in execution work of several projects. Engineering drawing/drafting method improved by introducing 3-D modeling in place of 2-D drafting by which multi level layout can be developed. Up-gradation to latest API 610, 10th edition has been implemented for different models of centrifugal pumps. Old design 83-20 Plunger Pump was with built-in gear reduction system. In this new system it has been replaced by external speed reduction gear and as a result, the frame size has been reduced. Development of high pressure, high temperature pumps for 700 MW nuclear power plant at Kalpakkam. This pump is being developed for the first time in India.

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Design and development of low weight single piece fluid end place of two pieces fluid end of mud pump has been made.

Quality BPCL has certification for quality management system (ISO 9001: 2008), environment management system (ISO 14001: 2004) and occupational health and safety (OHSAS 18001:2007). For customers satisfaction, stringent quality checks have been included in Quality assurance plans, also major switch over from sand casting to investment casting is implemented in most of the castings procurement especially in Nuclear Pump orders and accordingly, new vendors are being developed for the same. To further improve upon quality test requirements company is adding positive material identification (PMI) test and Helium Leak test by sniffer probe, the spectrometer for chemical analysis, electronic thickness, measurement instruments are included so as to upgrade the existing inspection facilities. Research & Development BPCL set up a R&D unit in the year 1977. Due to R&D efforts, the company has achieved success in the development of inducer, indigenous supercharger pumps for oilfield applications, solar pump and largest vertical process pump; modification of hydraulics of existing pump models and import substitution of expendables and spares for mud pump. (Gupta, 1994) In the year 2010-11 BPCL had made an addition of ` 1782.25 lacs in the Plant and Machinery which shows increase of infrastructure for improvement in the products and services. The company is looking for the up-gradation of technology for Mud pumps through business sharing agreement with NOV, USA for meeting requirement of ONGC/OIL and widening of range of Pumps manufacturing through technology up-gradation in order to meet requirement of high rating water circulating pumps for power sector. The company is putting effort to diversify into area of TFC( thin film composite ) membrane in association with CSMCRI( Central Salt & Marine Chemicals Research Institute ), Bhavnagar and NMCC New Delhi and also in the area of packaged drinking water in collaboration with IRCTC; New Delhi. Company is also looking for partnership with BHEL for setting up a Solar Power Plant on Pilot Project Basis. Valuation BPCL has maintained the consistency in its input output ratio (which can also be termed as the productivity ratio) throughout the year since 2006-12. The productivity of BPCL is 200%
2.3 2.2 2.1 2.0 1.9 1.8 1.7 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Source: CMIE prowess, Annual Report BPCL 2010-20112 Graph-7 2.2

Input Output ratio

2.2 2.2 2.1 2.0 1.9 Input Output ratio

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which shows that every unit of raw material consumed produces a double output. This can be better understood with the graph given.
Table 1

Years Raw materials consumed(Rs Million) Value of Production(Rs million) Import Substitution

Input output ratio 2006-07 2007-08 692.2 909.2 1498.31 1917.73

2008-09 1171.7 2399.89

2009-10 1496.8 2819.38

2010-11 964.69 2090.86

2011-12 708.56 1582.98

The most important reason for the set up of BPCL is import substitution of heavy capital goods such as pumps, cylinders & compressors. During the year 2010-11, Forged fabricated Crank Shaft for A1100 PT Pump has been indigenized and in the year 2011-12 bladder type discharge dampener for reciprocating pump which was being imported is now being indigenized resulting into saving of considerable amount of foreign exchange as well as reduction in cost. (Annual Report 2010-11, 2011-12) Export Promotion It has signed MOU with HMT (international) for Export Business. It has also demand in foreign countries & has clients in Arab Countries, Malaysia and Algeria. They secure international orders mainly through agent overseas, tenders open bidding. Challenges and Issues BPCL since its inception in 1970 was suffering loss year after year till it saw its turnaround under the guidance of Mr. A.K. Jain during 2005-06. One of the major challenges that BPCL now faces is to continue making profit in future. With its cylinder manufacturing division not in operation since past five months it would be an uphill task for BPCL to continue generating profits. Another major challenge that BPCL faces is to compete with the private players in the pumps, compressors and cylinders market. Being a public sector undertaking the cost of production incurred per employee is comparatively too high with respect to private entities due to Sixth Pay Commission, thus it faces stiff challenge from them. The organization aims to implement TQM practices to improve on its productivity, but since the organization is mainly into manufacturing of customized products the implementation of TQM practices is a tough task. Another challenge the organization faces is to implement its diversification plan and technology up-gradation plan.
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Since it is a government company it does not have full autonomy in the functioning and policy development for the company. The problem faced due to this is in the procurement of raw material like 3 months of time is wasted in development and approval of quotation for purchase from various vendors. Most of the orders they undertake are delayed and for this they have to pay late delivery fees (LDF) on every delayed order which further increases their operational cost. Corporate Social Responsibility Since past few years, the company has acknowledged its responsibility towards society at large. During the year 2011-12, 66 students from ITI and 1385 vocational trainees were imparted training. It organizes health check-up camps in nearby villages and for employees family. Apart from this company has organized health camp, distributed uniform/woolen garments to poor village students and planted trees inside the company. The company aims to plant 1000 new trees every year. The board of directors has formulated a CSR Policy dated 9th April, 2010. Further company has planned to take up other activities as per aforesaid CSR policy during the year 2012-13 as per MOU targets. Pollution and Environment The company is taking a number of initiatives towards preservation of all elements of environment by adopting various pollution control systems, strict environment monitoring and judicious use of natural resources (coal, gas, water and land). As a resolve of companys commitment towards conservation of environment, several tree-plantation drives were organized in the company. As a statutory requirement, consents/ approval are obtained from U.P. Pollution Board on maintaining all the environmental norms within the permissible limits. The statutory requirement for discharge of air under Section 21 of Air (Prevention Control of Pollution) Act, 1981 is being fully complied. Actions have been taken for implementation of pollution control in compliance of direction issued by Central Pollution Control Board, New Delhi. Discussions

Since the Turnaround of BPCL in the year 2005 the company has made significant improvement in its performance in term of profit, sales and operational efficiency. The improvement and growth that company achieved after turnaround was very much appraised by employees at all levels. Consolidated growth in terms of employees participation and management, the term MY BPC was coined which unites all the employees and management to look toward one vision which acts as a shared vision.
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The company board has approved a strategic plan in the year 2007-08 that include major areas of changes such as technological up-gradation and diversification plan, building up additional capacity and capital investment, manpower planning, quality improvement, business plan. The company has so far spent Rs 66.55 crores towards capital expenditure since 2008, under this 20 new machines were procured along with 19 supporting equipment till August 2012 this shows they are in moving towards operational up-gradation. Human Resource Development is a major concern for BPCL because majority of employees are above the age of 50 years, so it makes them difficult to adopt towards the changes in technology, knowledge and skills up-gradation. This problem is being further intensified by the restriction of Central Government to further recruit new employees. The companys marketing division does not work at par with its competitors in terms of devising marketing strategies for clients relationship management, procurement of orders, participating in international trade fairs, designing its basic Segmentation, Targeting and Positioning Strategy. The marketing division have pre-conceived notion that the name of BPCL is well known in the industry and they dont need further exposure for its new orders and clients. The companys contribution towards public exchequer in the year 2011-12 amounted to Rs 17.77 crores in the form of duties and taxes and has also paid dividend of Rs 53.53 lakhs to government of India in the year 2010-11. BPCL has also contributed to Iron and Steel Industry, in the year 2011-12 the company purchased steel plates worth Rs 3.11 crore (594.62 MT ) , seamless tubes worth 10.43 crore (1539.65 MT). It has also contributed to India Government as mentioned above in form of taxes and duties. In order to meet stiff international competition BPCL is putting efforts towards cost reduction through design/technology up-gradation, improvement in quality and workmanship so that its market share could expand. Oil exploration/ exploitation activities are expanding and further expansion in Nuclear Power Plants will generate more requirements for plunger/ mud pumps and nuclear pumps.

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References
(BPCL 2011-12), Annual Report Allahabad: BPCL. Bharat Pumps and Compressors Ltd.(n.d.). Retrieved November 17, 2013, from http://www.bpcnaini.co.in/Site-Detail-mod-Management-id.html Bharat Pumps and Compressors Ltd.(n.d.). Retrieved November 15, 2013, from http://www.bpcnaini.co.in/ (BPCL 2010-11), Annual Report Allahabad: BPCL. Department of Heavy Industries (n.d.). Bharat Pumps and Compressors Limited, Memorandum of Understanding 2012-13 Retrieved November 4, 2013, from http://dhi.nic.in.com Everest Kanto Cylinders (n.d.). Certifications about Everest Kanto Retrieved November 20, 2013, from http://www.everestkanto.com/aboutus/company_profile.htm Government of India (n.d.). Introduction to Public Sector Enterprises Retrieved November 5, 2013, from http://india.gov.in/spotlight/public-sector-undertakings-india Gupta, K. L. (1994). Research and Development in Public Sector Enterprises. New Delhi: Indus Publishing. KSB Pumps (n.d.). Comprehensive information about KSB India Retrieved November 25, 2013, from http://www.ksbindia.co.in Nandan, S. (2013). Organizational Change Effectiveness in an Indian Public Sector Organization: Perception of Employees at different level . South Asian Journal of Management , 97-113. CMIE Prowess, (n.d.). Retrieved October 22, 2013 Press Trust India . (2009). BPCL likely to get Mini-Ratna status. Allahabad: Times of India .

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