The Chinese Petroleum Corp (
With an eye on shaving around 15,000 employees from its payroll before privatization, expected sometime in 2005, Chinese Petroleum hopes to farm out around 77 stations around the country to employees, said the executive who requested anonymity.
Chinese Petroleum Chairman Kuo Ching-tsai (郭進財) was yesterday quoted in a Chinese-language newspaper as saying that the move would be a step on the road toward eventual privatization.
The 77 gas stations, which reportedly rack up annual losses of about NT$34 million, would be offered to employees to operate independently, under the Chinese Petroleum banner, the executive said.
While offering its employees a chance to effectively run their own businesses, the executive offered scant details as to how private management would help the loss-making gas stations turn a profit.
He did say that operators would be free of the legal constraints placed upon state-run firms in terms of salaries, budget targets and simple day-to-day operations, which could offer some hope of eventual profitability.
The executive said that a crucial part of the plan was to simply maintain the firm's share of the local market.
Since Formosa Petrochemical Corp (台塑石化) started to produce ethylene in July 1999 and began selling oil-based products in September 2000, Chinese Petroleum has seen its share of Taiwan's market trimmed by around 30 percent.
According to the Taiwan Ratings Corp (中華信評), the local partner of Standard & Poor's Ratings Services, Chinese Petroleum's market share of retail gas stations in Taiwan stood at 73 percent in April of this year, versus Formosa Petrochemical's 24 percent.
"We cannot close any of the stations, as laws governing our operations don't allow us to. In addition, we must try to restrict new entrants in the market," the executive said.
The gas station plan is still being formulated and must first be accepted by the Chinese Petroleum worker's union, the executive added.
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