GP Petroleum, a subsidiary of Gulf Petrochem, has technology tie-up with Spanish lubricant major Repsol and working to garner bumper business in the Indian automotive lubricant sector. M Hari Prakash, CEO of GP Petroleum discusses with Jaishankar Jayaramiah of Automotive India News on the company’s future plans in India.
What is your business model in India?
Gulf Petrochem has acquired India-based Sah Petroleum in 2014 along with its lubricant brand Ipol and formed its BSE-listed subsidiary GP Petroleum. A year ago, GP Petroleum forged technology tie-up with Spanish lubricant major Repsol to manufacture and sell Repsol products in India. Now we have two lubricant brands – Ipol and Repsol in India.
Can you share the manufacturing details of these two products?
Ipol is being produced in both of our production facilities in Vasai and Daman in India whereas Repsol has been manufactured in Vasai. Put together, we have production capacity of 80,000 kilolitres per annum, of which the company is currently utilizing 60,000 kilolitres. With Repsol added in production since a year ago, the production volume has been increasing steadily month-by-month.
How do you see the Indian business with Repsol?
Repsol is a world renowned lubricant brand. They are already suppliers to many OEMs worldwide. As you know, all most all major OEMs have their manufacturing activities in India too. So it will help us to develop our business in the Indian OEM and the automotive aftermarket too. Likewise, GP Petroleum has a wider marketing network in the country, which inturn will help taking Repsol brand across India.
What is your business proposition related to automotive vs industrial lubricant?
Our flagship brand Ipol is primarily for the industrial sector while we are pitching Repsol for the automobile sector although they have products for the non-automotive segment. So far with Ipol, we had 90 percent of business volumes coming from Industrial while the remaining 10 percent from the automotive. Now Repsol added to the portfolio, the automotive share is expected to increase to 20 percent in the next 4-5 years.
Can you throw light on the Indian auto lubricant market and your contribution?
Overall lubricant market in India stands at 2.2 million metric tonnes, of which 50 percent belongs to automobile sector. We have less than 1 percent market share in the automotive segment. Now with Repsol added in the product portfolio, we believe to increase our market share to 4-5 percent in the next five years. GP Petroleum has started producing Repsol lubricants in India from 2016 starting with motorcycle oil followed by the lubricants for passenger vehicle and commercial vehicle engines. Now we have complete pack of products for the automobile sector in India and the business is steadily growing. Further we have an agreement with Repsol to sell these products in the nighboring countries too.
What is the size of your distribution network?
We have around 120 distributors across the country for automotive lubricant and 80 active distributors for the industrial products. We will be doubling the size of our automobile distributors’ network in a year or two as to meet the raising demand for our products across the country.
Already India has many lubricant producers. How do you compare yourself with them?
We stand out from them from our business model. A majority of the existing lubricant makers are focusing only on the domestic market. But we are making in India and sell our products in the domestic as well as in the international markets. So we are strongly supporting ‘Make-in-India’ concept and taking the locally produced product to the overseas markets.
Is there are any other future plans with Repsol?
Yes when Repsol entered India through us, there were already many players here. but both of us felt this is the right time to introduce the new international lubricant brand in India as the automobile market is growing. Besides, the awareness on lubricant quality has also been increasing with more and more vehicles bought by the younger generation. This year, particularly, the two wheeler market growth rate in India is better than that in China. Now both of us are considering to set up a full-fledged joint venture in India. The joint venture proposal is in thought process and it may take some time.