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Spanish integrated oil and gas company Repsol is now entering the Indian market by tying up with GP Petroleums, a brand in the domestic lubricant space.
Under the agreement, GP Petroleums will locally manufacture and market Repsol’s line of premium quality lubricants in India using the latter’s brand name. The products will be launched in September, the companies said at a press conference here.
Market share targetThe joint venture is important for GP, a subsidiary of the UAE-based Gulf Petrochem Group, as it looks to increase its market share in the automotive segment.
Manan Goel, Group Director of Gulf Petrochem, told BusinessLine , “We currently control about 4.5 per cent of the lubricant oil market share in India, of which 4 per cent is from the industrials segment and the remaining from the automotive segment. We’d like to add on another 4 per cent to our market share with this venture, and specifically focus on lubricant oil for automotives.”
Repsol’s strength, Goel added, is in making lubricants for the two-wheelers.
‘Right time to enter’The Indian market is ripe for Repsol to enter, he added, considering it is among the largest in the world in terms of demand for two-wheelers.
GP currently has a strong local presence in industrial lubricants with its flagship IPOL brand.
It inherited the bulk of its industrial lubricants market from Sah Petroleums, in which it bought controlling interest last October.
Since GP already has considerable manufacturing capacities locally (in Daman and Vasai), the joint venture does not require much capital outlay, Thangapandian Srinivasalu, Executive Director of Gulf Petrochem, said. The marketing and distribution costs will be split evenly between the partners.
The Repsol line of premium lubricants in India will help GP move up the value chain, he said, while also remaining competitively prices vis-a-vis other foreign lubricant brands, such as Castrol.
GP also has plans to build a 100,000-tonne-a-year blending plant at Pipavav, Gujarat, which will require investment of up to ₹125 crore, by next year, as it plans to strengthen its refining capacities.
Madrid-based Repsol produces crude oil and natural gas, refines petroleum, and transports and retails fuels and lubricants.
Shares of GP Petroleum gained 1.29 per cent on the BSE on Wednesday, to close at ₹35.20.
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