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Concept of energy-efficiency through lubes is fast-catching up



The lubricants sector was traditionally considered product oriented and focused more on price per litre vis-à-vis total cost of equipment ownership. There is, however, slow but sure shift from price led purchasing to value-led decision making with players like Gulf Oil advocating for long life and high performance lubricants. While this approach will depress the volumes of lubricants for a particular application, the volume of industrial lubricants will grow on the back of the industrial growth especially on account of improving the specialties share, says Ravi Chawla, Managing Director, Gulf Oil Lubricants India Ltd. In this interaction with Rakesh Rao, he elaborates on emerging trends in lubricants industry and growth plans of Gulf Oil.
 
Your company has been a leader in lubricants space. How do you see the performance of Gulf Oil’s industrial lubricants business?
Gulf Oil operates in a wide variety of industrial sectors ranging from steel, power, and cement to pulp - paper, ceramics and glass. 
 
Gulf Oil’s industrial lubricants portfolio is one of the largest among peers. In hydraulic oils - which constitute 10 per cent of the overall industrial lube consumption - we have 9 formulations including products exceeding DIN 51524 Part 2 HLP specifications. These oils offer benefits to the customers in terms of long life and protection. Our range of specialty metalworking fluids (MWF) provides good opportunities in material removal applications and also rust protection oils (RPO). Other high performance products include high temperature, water resistant and high weld load greases.
 
Our route to market depends on how best we can service the customer and is decided keeping the customer requirements in mind. We have made significant inroads in the industrial market and this is reflected in the fact that Gulf Oil is growing at 3 times the industry growth. 
 
How is demand for Gulf Oil’s industrial lubricants? What is driving this demand?
The demand for industrial lubricants is driven by the overall growth trends in the Indian economy as manifested by the Index of Industrial Production (IIP). Besides, the demand for high performance lubricants in this segment is driven by the criticality of the application in which they are used.
 
Gulf Oil Industrial Lubricants has demonstrated significant value at customer installations through lube cost reduction, increased component life and reduced downtime. Our focus has been on reducing the cost of ownership of the equipment. Over past few years, we have observed that industrial consumers are willing to use high-performance lubricants if we demonstrate the value delivered by using Gulf Oil’s high-performance lubricants. This approach of ours is supporting the customers in right decision making. Overall the value selling approach of Gulf Oil is helping us meet the needs and demands of our customers.
 
How is the market for industrial lubricants in India?
India is one of the fastest growing economies and is likely to grow by upwards of 7 per cent in this financial year. We expect the market for industrial lubricants to remain bullish. Currently, the potential is estimated at around 1340 million litres, out of which processing oil contributes almost 50 per cent, plant maintenance fluids & greases around 23 per cent and metalworking fluids (MWF) around 10 per cent. There is slow but sure shift from price led purchasing to value-led decision making with players like Gulf Oil advocating for long life & high performance lubricants. While this approach will depress the volumes of lubricants for a particular application, the volume of industrial lubricants will grow on the back of the industrial growth especially on account of improving the specialties share. 
 
Is growing environment awareness driving the demand for eco-friendly lubricants in India?
India has seen multiple shifts in the usage of lubricants from extremely low specification products to meeting ASTM standards to exceeding the same in the past 25 years. Lubricants are special formulations and undergoes phase of continuous improvement with the advent of new technology. The journey is still on and we are seeing a significant improvement in industry awareness on environmental concerns like choice of lubricants which is zinc-free vs zinc-containing or bitumen-based vs clay-based. The mindset is definitely changing and we see the demand for such products increasing. Just to add, there is a paradigm shift in disposal methods that are being used. Both are a welcome change for a better environment.
 
Do you think acceleration in mining and road construction activity will further drive the demand for lubricants?
Mining and construction are areas of focus for industrial lubricants and our portfolio pitch is very strong in both these segments. Captive mines for cement plants, ISPs (Integrated Steel Plants) need specialty lubricants. Due to a large number of infrastructure and construction projects in execution and sanctioned stage, India is termed as an under construction country in right perspective. These are high demanding sectors in terms of equipment reliability and cost of operation. Lubricants play an important role and will see an uptrend due to increased activities in these sectors.
 
What are the key trends in lubricants sector? And how is your company tapping these trends?
Especially on industrial side, energy efficiency through lubricants is a concept catching up really fast. Rightfully so, as energy cost accounts for a significant percentage in any manufacturing process and even 1 per cent saving amounts to big value adding up to the bottom line. Gulf Oil has synthetic formulations offering energy saving and we keep working with end customers and OEMs to demonstrate these benefits.  
 
For example, we are pitching in with zinc-free or ash-less formulations in case of hydraulic applications and specialty lubricants in case of bitumenous products, typically in sugar industry.
 
Lubricants sector traditionally was considered product oriented and focus was more on price per litre rather than the Total Cost of Ownership (TCO) of the equipment. Gulf Oil has been focussing on value added services like oil condition monitoring, gear inspection and cost per tonne of the finished product. Our liquid management programme (LMP) enables us to thoroughly study and understand the customer’s requirement and come up with a complete basket of product plus services. 
 
What are your growth plans for the industrial lubricants business?
Gulf Oil already has its own lube oil blending plant at Silvassa and has commissioned a new facility at Chennai last year summing up the capacity to over 140,000 KL. Our Chennai plant also houses our world class R&D centre tasked with producing the best in class lubricants. Our team of professionals believe in offering end-to-end solutions to customers in consultation with them. We are investing in technology, new product development and reach and hence we hope to deliver a fantastic growth in this category.
 


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