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Shri. Thangapandian S, Executive Director, Gulf Petrochem Group

17 Dec 2015

We want to achieve 5% automotive lubricant market by the end of decade.

Vehicular population in India is on the rise and by 2030 it is expected to reach a confounding figure of 400 million. This offers a huge opportunity for the lubricant industry too. The industry in consumer segment is expected to grow at 6.6% per year. Executive Director, Gulf Petrochem Group Thangapandian S speaks to InfralinePlus on the opportunities ahead and how the company wants to en-cash it. Excerpts.

Kindly share as to how this partnership with ‘Repsol’ help GP Petroleums Ltd capture its due share in India’s lubricant market?

The Indian market has great potential and it’s amongst our priority markets.. Gulf Petrochem Group’s subsidiary - GP Petroleums, in order to tap the growing potential in the Indian market, partnered with Spain’s No 1 petroleum company ‘Repsol’ to exclusively manufacture and market Repsol’s line of premium quality lubricants across India and to expand our footprints in this ever growing economy.

Repsol, being a brand with a strong presence in the automotive sector worldwide, has given us a firsthand advantage in this sector. Whilst, GP Petroleums has a equally strong presence in industrial lubricants with its flagship brand IPOL; this partnership has lead us to identify synergies and leverage each other’s strength to also unleash a new marketing strategy in the automotive segment.

With growing vehicular population and increasing demand for lubricants, how important is India in your scheme of things?

The Indian lubricants market is the third largest market in the world in terms of consumption volume. We see a very potential market in India for lubricants with rising opportunities.

In 1991, there were already 20 mn vehicles in India and by 2011, the number had reached to 140 million. Further by 2030, vehicle population is expected to reach a confounding figure of 400 million.

With reference to the forecasted growth in the auto industry, we feel that the lubricant industry in India is likely to benefit from this growth. The overall lubricants industry in consumer segment in India is expected to grow at 6.6% per year.. Hence our strategy fits with the overall growth in the coming future.

Diverse offerings from competition such as lifetime warranties, 5 yr warranties etc are already there. How do you plan to deal with the competition in the Indian market?

GP Petroleums has a strong presence in industrial lubricants with its flagship brand IPOL. IPOL has been present in India for over four decades and more than 70% of our business is from the industrial lubricant sector. Repsol’s products come with differentiated benefits and special features that will cater to the newly emerging premium and top-end segment across markets in the country.

We will bring in efficiencies in our cost structure. GP Petroleums has well equipped manufacturing facilities with hi-tech blending facility, quality-control test labs and automated filling and packaging stations. The group’s in-house base oil storage facility of 17,000 KL is one of the largest in the industry in India.

GP Petroleums and Repsol together are targeting on achieving 5% automotive lubricant market by the end of the decade and if we successfully achieve that then India will be the second largest lubricant market for Spanish lubricant maker with a production of 50,000 metric tonne in India. Right now, GP Petroleums is very excited about this partnership and will mainly focus on manufacturing and marketing Repsol’s superior and comprehensive line of premium quality lubricants across India.

Do you feel, there is enough awareness about automotive lubricants among India’s driving population? If not, what should be done to spread right awareness among the population?

We feel that a big challenge which the industry faced few years back was the awareness about the lubricants available in the market and right lubricant for the right application. But as we dig more into the present time, we see that people now are well aware of the products they are using and with what they are looking for. Specifically the youth, who are very cautious about the customization, mechanism and maintenance of vehicle they are in for a purchase hence, they keep themselves abreast of the products they use for their vehicles.

Environment protection initiatives have taken centre stage across the globe; India too is serious about controlling pollution. How do you think, vehicular population can contribute in the betterment of environment?

We believe that a lot of initiatives are being taken on clean energy by the government. Prime Minister Narendra Modi has instructed ministers to draft a policy proposal that would promote clean fuel and auto engines, including a possible 10-year tax holiday for stakeholders.

With the technology of Repsol we will introduce low viscometric products which will meet latest emission norms plus also help the customer with fuel economy. This would be in the fastest growing segment of two wheelers plus also other DEO segment.

Is this an exclusive partnership in automotive lubricant segment that you have inked with Repsol, or are you open for partnerships in the same space? Do you plan to introduce your own products in this space in future?

As I already mentioned, right now GP Petroleums will be manufacturing and marketing Repsol’s superior and comprehensive line of premium quality automotive lubricants across India. The country, in the near future, is promising growth in this sector. Since we all know that this partnership is at its starting point, we envision that as things move forward, there will be a lot more things that we can do together.

What is the current year target of sales figure in industrial lubricants segment? What kind of growth in industrial lubricants segment do you see in the next 2-3 years?

As you are already aware of, the Industrial lubricant demand is dependent on industrial production and growth trends in the economy. India is a massive market for process oils. Process oils are the biggest contributor within industrial lubes. India is a huge market for process oils as well, accounting for 53 per cent of the overall industrial lubricant demand.

This business is driven by growth in infrastructure investments, manufacturing, mining sector and increased manufacturing exports.

So as demand in these sector is expected to rise in the near future, we expect to see some growth in the industrial segment which is currently showing a sluggish growth.

With ‘Make in India’ campaign, medium and small scale industries in India is likely to grow with more companies / firms to come up in this space. What kind of growth do you envisage in the industrial lubricant segment?

The “Make in India” strategy encouraged the Small and Medium Enterprises (SMEs) to make the growth process more inclusive. These sectors that can help India cut its dependency on imports and encourage jobs and raise income of millions.

The Indian Prime Minister Mr. Narendra Modi launched the ambitious “Make in India initiative” with an aim to make manufacturing a key engine for India’s economic growth. His dream is to make India a manufacturing hub with the support of foreign investment which will create jobs and ultimately raise the purchasing power of us Indians.

Here, SMEs come into the picture as it is this sector that can help India cut its reliance on imports, encourage jobs and raise income of millions. Which is why, the “Make in India” mission has to be supported by the government to bring overall change in its policies and procedures.

Industrial lubricant business foresees a simultaneous growth as all the manufacturing sectors gear up for its ‘Make in India’ campaign and the government is keen to shape business friendly policies, especially in the oil sector, which is set to open anytime now.