Opens new plant in Chennai, regional office in Bangalore
Close on the heels of the launch of its state-of-the-art commercial product manufacturing plant in Chennai a few weeks ago, Gulf Oil Lubricants India has opened its regional office in Bangalore early June.
In an exclusive interaction, Mr. Ravi Chawla, MD – Gulf Oil Lubricants India, touched upon points pertaining to the company focus on the southern markets, future trends and the far-yet-soon-to-be-real challenge called electric vehicles, among others.
Excerpts from the interaction:
Welcoming New Kid On The Block
Our state-of-the-art plant in Chennai that was inaugurated a few weeks ago is a new start for the southern team, and this has been one of our strongest teams. We are happy to have this new office which is consumer-friendly and trade-friendly. We are sure that the energy levels of this vibrant and new space will help us collectively do even better. Most importantly, this is a place we believe where our team can enjoy working. This, for us, is a great new beginning.
New commercial production plant
We have invested about Rs. 200 crores of capital expenditure in our new commercial production plant at Ennore in Chennai. It boasts of state-of-the-art blending, packaging and storage systems. For us, it is not only about showcasing our manufacturing technology and offering a quality product, but is also about meeting our needs for future demand in terms of our volumes.
We have already crossed about 95,000 kl and the Silvassa plant has already run into the capacity limit. This new plant will help us meet the demand needs for the next three to four years and we also hope that we have our R&D center there to develop new products for the market within India and in the region around. We will really be able to present to the OEM platforms where we can develop value propositions for the markets in different segments which we are targeting our products at.
The installed annual manufacturing capacity of the new plant is 50,000 kl.
Spotlight on southern markets
Southern India markets have always been our focus, mainly for our truck segment. We have been growing above the industry growth rate and hence we need the additional capacity. The locations in the South are primarily chosen because the region is a large market for us. Yet we see that we can get closer to our new customers and new segments like motorcycles and cars.
Besides, some of our large OEM customers are present here. Our southern team has always been our strength, hence both the new plant in Chennai and the new Bangalore office are in keeping with taking our strengths to move to a higher level.
Growth target
We have been growing at more than 2-3 times the industry growth rate and we have already crossed 95,000 kl in the last financial year. Our next target would be to look at a more aggressive growth, and we feel that the market conditions are improving with the diesel engine oils picking up pace and the other segments also growing. The monsoon forecast is good this year. Hence, given all this and coupled with our internal goals, which we want to exceed and do better, and our commitment, we try to continue growing at least 2-3 times the market growth rate in the industry.
Target CV sector
For us, the CV sector is categorized in three ways. One, the factory fill where we have a couple of large customers, and some are in south India also; second, the franchisee workshops where we are seeing much growth happening; and third, the open market where we need to distribute our products and work with the influencers, the trade and the consumers. All the three segments are important for us, and in the last six months, we have seen new vehicles come in. They will require new generation lubricants. Then, we have the needs to fulfill for BS-4 with BS-6 coming too. Altogether, we see much work in these areas to bring in our products.
We are a global brand, so we have all the products available in Europe. It means for us to bring them to India and work with the OEMs. Of course, we have to see if we can add value to these products. We also feel that the fuel economy will play a big role, and with regard to the emission norms, for BS-6 we have already making AdBlue which helps in the emission norms control. The CV sector is large and nearly 40 per cent of the players are in diesel engine oils. We feel there is much work in the CV sector and we are ready for it.
Future trends
One of the trends is surely that there are BS-4 and emission norms coming up along with the fuel economy. Then the LCV segment showing new growth. All these will require tailored products. So we are going to work on how to bring in better products, with the demand also improving for high-end branded lubricants.
These trends are positive, and thus Gulf Oil is well-positioned. We believe we are the number three brand in India today, while among the private sector players, we are close to being number two. And the trends are that the distribution and the product quality requirements are going to be critical, and we are working in that direction and are sure to take the business ahead.
In the EV era
Electric vehicles (EVs) have been much in the discussion within the industry in the last six months and we are watching that space closely. We believe that EVs will be good, but it will take time. We feel that in the next 15 years or so, we would not see much demand contraction in the lubricants market, but definitely after that we will have to see how the growth rates move.
Our focus is five years at a time. Having said that, it is a fact that we are also getting ready to see how to mitigate that and as time unfolds we are also seeing many challenges in the adoption of EVs. So, we will have to recalibrate our plans and look at how best we can use the current base and look at the products that we need to bring in.