Our goal is to be one of the top three lubricant brands

Written by The Financial Express | Updated: Aug 2 2014, 05:02am hrs
Gulf Oil Lubricants India (GOLIL) was listed on Thursday on the BSE and NSE post the requisite approvals after it demerged from Gulf Oil Corporation. The demerger was aimed at unlocking the value of the lubricant business. In an interview with FE, Sanjay G Hinduja, chairman of Gulf Oil International (parent of GOLIL), said GOLIL will continue to outperform the industry by enhancing its distribution, investing in the brand and securing more OEM tie-ups. Excerpts:

Your thoughts on the business outlook for the sector.

The company has been growing in double digits for the last few years and we are expecting to continue the same growth pattern going forward.

What is your market share

In the bazaar sector, we have a 7% market share at the moment. We are number 6 today and our goal is to be one of the top 3 lubricant brands in the industry in terms of volumes. The company will continue to outperform the industrys growth by enhancing its distribution, investing in the brand & securing more OEM tie-ups. Further, this is in line with our global vision of being one of the largest independent downstream players in Lubricants & Speciality Chemicals in the world.

What are key challenges for the business

We have challenges in terms of capacity; that's why we are going for the second plant. The other challenge is foray into the rural areas; we plan to give a big push to our rural strategy. OEM tie-ups are key in this business and, in the next two weeks, we are going to announce a major OEM tie-up.

Do you have plans to list any other subsidiary

At the moment no, but I'm sure if you see me in the next 18-24 months, another of our subsidiaries might be ready for listing.

Could we see some public issues of Gulf Oil Lubricants to raise more capital from the market

In the foreseeable future, no. This is primarily because the company is generating cash and even 50% of the cash required for setting up the second plant will be raised from internal generation.

Could you elaborate on your future plans.

We are going ahead with a second plant in Chennai. We have acquired land and are going to start construction this year. The project cost is estimated to be R130-140 crore and the plant will have a capacity of 75,000 tonne per annum, the same capacity as our first plant in Silvassa.

What kind of revenues are you expecting, going forward

Ebitda margin (earnings before interest, taxes and amortisation) in this business is in the region of 12-13%. In terms of top line, we are looking at a double-digit growth.

What are the kind of branding activities initiatives lined up this year

You will see much more advertising on TV. The Gulf noise would be louder. Our association with Mahendra Singh Dhoni, our brand ambassador, and that with Chennai Super Kings will continue. Our focus would be on Motosports and cricket in India.

Any separate plans internationally

Gulf Oil acquired Houghton International 18 months ago. It is preparing for a listing in America, hopefully towards the end of this year. So, thats going to be another milestone for Gulf International.