The Hinduja Group’s lubricant-manufacturing arm Gulf Oil Lubricants said that its Chennai plant has begun production to the tune of a capacity of 50,000 kilolitres.

Set up with an investment of Rs 200 crore, the plant will enable the company to broaden its reach, in the domestic and export markets.

Gulf Oil plans to add enhanced filling and packaging lines at a later stage to increase capacity to 75,000 kilolitres “in the next few years.”

Speaking to CNBC-TV18, Ravi Chawla, managing director of the company said, “Our growth needs, in terms of volume, will be met by the plant.” He added that the Chennai plant now gives Gulf Oil a strategic foothold in increasing efficiency of base oil imports and costs.

“It also means a shorter time period for better, direct customer services,” said Chawla, adding “the plant will be able to cater to the domestic market in the South and East, and export markets.”

A-Z Product Portfolio

Ever since Gulf Oil’s Chennai plant went operational in December, it has added to the company’s 90,000-kilolitre production capacity at its plant in Silvassa, Dadra and Nagar Haveli.

“Currently our sales stand at 100,000 kilolitres,” said Chawla.

According to the company, the Chennai plant is capable of catering to the company’s complete product portfolio.

“We also hope to have new specialities like industrial oils and metal working fluids, which will be product additions,” he added.

This process is being facilitated by Gulf’s in-house R&D centre, which is spearheading the company’s product propositions.

New Export Markets On The Anvil

The plant will also help Gulf tap new export opportunities in Asian markets. “We are already catering to the Middle East and Africa from our Silvassa plant,” said Chawla, “We now hope to get business from markets like Thailand, Malaysia and Singapore. We are assessing this potential and hope that it will be a growth area for us.”

Next Target: Four-Wheelers

While the Lubricants industry has registered average CAGR of 2-3 percent, Gulf registered 14 percent CAGR in FY18. The company now wants to bank on the four-wheeler automobile space to improve its margins.

“We have fairly good share in the motorcycle and diesel oil segment, but we see good scope for the passenger car segment, which has good margin earnings,” said Chawla. This is in line with a company strategy to focus on high-margin products.

“Our rural base is also going up. So, our distribution strengths in rural India is a testament to our efforts,” Chawla added, “Given that this market is also buoyant, we are well poised to look at a higher trajectory of growth.”

First Published:Sept 6, 2018 10:09 AM IST