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BPCL to foray into bottled water, DTH businesses

BPCL to foray into bottled water, DTH businesses

Author | Source: Business Standard | Saturday, Jul 19,2008 8:27 AM

BPCL to foray into bottled water, DTH businesses

Diversification plan aimed at boosting its flagging profits.

Bharat Petroleum Corporation (BPCL), the country's second largest oil marketing company, plans to diversify into bottled water and direct to home (DTH) services in an attempt to boost its profits.

The company reported a 91 per cent decline in its fourth quarter net profit as it was forced to sell fuel below the prevailing market price.

The company is seeking the approval of shareholders, through a postal ballot, for the new line of business. The result of the postal ballot would be known by August 22. BPCL's profit fell to Rs 58 crore in the three months ended March 31 this year from Rs 670 crore a year ago.

"The bottled water market is growing and presents a lucrative opportunity. Our existing infrastructure in bottling and distribution gives us an edge to enter into this business. However, we need to acquire technology and lay infrastructure such as purifying and distilling plants," said a company source who did not wish to be identified.

The bottled industry is witnessing increased competition, with global cola giants, Pepsico and Coca-Cola Company slugging it out with local players including industralist Vijay Mallya's Kingfisher. The size of the bottled market in India has, however, not been estimated.

The company plans to foray into the information technology and communication services space by providing DTH and software solutions.

According to PriceWaterhouse Coopers, the DTH homes are estimated to increase from 4 million in 2007 to 25 million by 2012. The DTH penetration is set to increase from 3 per cent of the television homes in 2007 to 19 per cent in 2012.

The oil marketer will manufacture storage devices for petroleum and allied products to transport its goods economically.

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