Companies

Gulf Oil mulls assembly unit as battery business charges ahead

G Balachandar Chennai | Updated on August 26, 2019 Published on August 26, 2019

Ravi Chawla, MD, Gulf Oil Lubricants India Ltd.   -  Bijoy Ghosh

Gulf Oil Lubricants India Ltd, which is keen to grow its two-wheeler battery business, is contemplating setting up an assembly plant soon.

The lubricant brand entered the two-wheeler replacement battery segment a few years ago as a pilot venture. But seeing strong momentum in the business, along with immense potential presented by a demand-supply gap, Gulf Oil is now looking at investing substantially in it.

It has been importing and selling batteries under the Gulf Pride brand in India. Its batteries have been specifically targeting two-wheelers in the sub-150cc segment.

“We did about ₹50 crore in two-wheeler battery business in 2018-19. We are looking at better growth going forward as we will start investing in distribution, brand and technical support. Now, we want to seriously look at some sort of area for assembly. Of course, the plans are at the drawing board level and will take a few months to finalise,” Ravi Chawla, Managing Director, Gulf Oil Lubricants India, told BusinessLine.

Though the Hinduja Group company has not yet finalised the investment, its proposed assembly plant would typically require ₹70-75 crore. It has short-listed three or four locations for the unit. “We hope to finalise everything in three or four months,” said Chawla.

Gulf Oil’s two-wheeler battery business garnered revenues of about ₹15 crore for the first quarter. It is currently present across 150 districts nationwide. “We can look at ramping up our presence to 200-250 districts in a year’s time,” he added.

Chawla further said the company is also planning to invest in leveraging its lube distribution to cross-sell two-wheeler batteries.

While 50 per cent of battery distribution will be done via the lube distribution channel, the balance will be through battery dealers, he added.

Its distribution network in rural areas will help it take its batteries beyond big cities and towns, he said.

Noting that there is a demand-supply gap for good quality batteries, Chawla said Gulf Oil is confident of growing its presence and gaining share. Presently, Exide and Amara Raja are the two major players in the two-wheeler segment.

Published on August 26, 2019
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