Gulf Oil Lubricants expands Indian OEM partnerships

Tanya Thomas Mumbai | Updated on January 09, 2018

Signs on Bajaj Auto, Force Motors, Fiat

The rapidly growing lubricant company Gulf Oil Lubricants India Ltd is extending its partnerships in the automotive sector by signing on Bajaj Auto, Force Motors and Fiat, a source close to the company said.

The Hinduja Group company is expanding its partnership with Bajaj Auto in India to now become the latter’s lubricant partner for its global sales. Bajaj Auto is the country’s largest exporter of two-wheelers.

Gulf Oil has also recently signed on to be lubricant partner for Force Motors for commercial vehicles, and will be selling Adblue — an automotive grade urea that cuts down vehicular emissions — with Fiat.

Gulf Oil’s existing OEM (original equipment manufacturers) partners include Ashok Leyland, Mahindra, L&T Komatsu, Bharat Benz and Volvo Penta.

Q2 net up 38%

Gulf reported a ₹40.42-crore net profit for the second quarter of FY18, up 38.05 per cent higher than the ₹29.28 crore reported by the company in the corresponding quarter of FY17. Net sales stood at ₹322.95 crore, up 22.55 per cent.

Ravi Chawla, MD, Gulf Oil, told BusinessLine sales growth was strong in the quarter, especially in the personal mobility side. “Our OEM sales have grown very well and that is our billing to dealerships. We are also seeing industrial sales to our direct industries. Products that we sell through the industrial portfolio have also grown well.”

The company expects to commission a ₹150-crore blending plant near Chennai by the end of December, to which about 30 per cent of volumes (primarily for South India) will shift from the existing plant in Silvassa. This will reduce freight costs. The company expects the plant to be Ebitda-neutral from day one as savings in freight costs will offset incremental fixed costs.

More than half of India’s auto lubricants market is dominated by brands belonging to the three large PSUs: Servo (Indian Oil Corporation), Turbo (Hindustan Petroleum) and MAK (Bharat Petroleum).

The other half of the market is dominated by MNCs including Castrol (a division of BP), Shell, Exxon Mobil, Total and Gulf Oil.

Soaring investments

Investments are ramping up here as lubricant makers fight for market share and razor-thin margins. Outside of the PSU behemoths, analyst point to Castrol and Gulf Oil as the fastest growing in this space.

Published on November 14, 2017

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