Companies

GP Petroleums to invest ₹100 crore in new plant in Gujarat

Rutam Vora Ahmedabad | Updated on February 19, 2020 Published on February 19, 2020

Company’s second blending plant in India to process about 300,000 kilolitres of lubricants

Global automotive and industrial lubricants maker GP Petroleums Ltd (GPPL) plans to foray into the specialty products segment in India, to tap the market potential for transformer oils and white oils, among others.

GPPL, a part of UAE’s GP Global Group, has announced ₹100-crore investment for a greenfield lubricant processing facility in Gujarat, which will have the capacity to process about 300,000 kilolitres (KL) of lubricants. This will be the company’s second blending plant in India, where it will also manufacture specialty value added products that will cover the entire value chain of its customers.

Speaking to BusinesLine, Prashanth Achar, CEO, GPPL, said the company’s strength is in verticals of industrial lubricants and automotive segments. “We will soon be adding another vertical, which is specialties. It will include products such as transformer oils and white oils. This is something new that we will be doing soon. The R&D of these products has been done and we are waiting to commercialise them. The specialty products will be made at the upcoming new facility in Gujarat.”

Besides GPPL’s home-grown IPOL brand, the new plant may blend REPSOL branded automotive products as well. The two brands are well placed to cover all the available segments of motorcycle oils, diesel engine oils, car oils and specialty oils, and at different price strata.

Consolidation plans

The Gujarat facility in Saronda will be the second facility of the company after its existing 80,000 KL-capacity unit at Mumbai with a storage facility of 15,000 tonnes — one of the largest in the industry. This existing ISO-certified plant is about 45 years old, which has prompted the company to toy with the idea of consolidating all manufacturing operations at the Gujarat unit and eventually phase out the old unit.

“We are not sure whether to have two operational units or consolidate all manufacturing at one facility. That decision will be taken after considering the cost-benefit analysis. We can say in the long term, this will be the strategy,” added Achar.

The BSE-listed GPPL is a debt-free company looking to fund the ₹100-crore investment through a variety of options, including through internal accruals or debt finance or a combination of the two.

Achar stated that the new plant is a part of the company’s global growth strategy to achieve 500 million litres of lubricant processing. “We are aiming to achieve 500 million litres of processing in the near future from the current about 120,000 litres — that means multiple times’ growth. To achieve this we are considering both organic and inorganic options," he added.

The company is present in five countries across West Asia, West Africa and South Asia regions.

Published on February 19, 2020
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