The lubricant giant is eyeing the top slot in Indian market by launching new range of products from its global shelf in the wake of stringent emission norms being implemented in the country. The company, after establishing its firm foothold in the commercial vehicle segment will now start focusing on passenger vehicle segment to sustain the momentum of growth.

Deepankar Banarjee, manager, distribution and business development of Indo-Mobil Ltd told The Financial Express that the Indian lubricant market is in for a shakeout following the new emission norms introduced by the India government which had forced automobile companies to adapt to Euro norms. "The new emission norms along with improved turbo-charged enginesand environment guidelines would see a major shakeout in the Indian market in a couple of years", Deepanker said. Adherence to Euro 2 norms require heavy investment in research and development. "We have a cutting edge in this as we spent 6 to 8 per cent of total revenue in R&D per annum", he said.

He said, Mobil's growth strategy in India hinges on technological shift and constant product innovation. "We are not looking for volume driven growth. Our USP is technological edge and shifting top-of-the-end product line", he pointed out. The sector would see a flurry of activity in the coming years with weak player being taken over or merged with the stronger ones. "Out of the 38 odd lubricant manufacturers hardly eight will be left after a couple of years. The rest may have to either merge with stronger players or have to close down", he said.

He said the company is seeing India as the most promising market and, therefore, has put Indian operations in top priority. He said, the company's turnover hasdoubled during the last year and expected to keep the pace this year as well.

Deepanker was here in connection with the launch of International Mobil Delvac range in India here. Targeted at commercial vehicle segments, the new range of lubricants is designed to provide extended engine life of diesel engines of all makes and generations, he ssaid.

He said, Indo Mobil at present has a capacity of 500,0000 tonnes per annum (tpa). Besides, Mobil has recently tied up with another Mumbai-based lube manufacturer with a capacity of 30,000 tpa for producing premium quality lubricants. He said, the company may go in for acquisition or set up its own plants in the coming years once the Government of India opens up the sector for foreign players. He said, the company has plans to enter the hydrocarbon industry in a big way. "Once the time is conducive we will certainly enter the sector", Deepanker said.

Indo Mobil was incorporated in 1994 as a 50:50 joint venture between Mobil and IOC to blend, packagedistribute and market Mobil brand lubricants throughout the country.

Insight

The decision of Mobil to aggressively market its lubricants is in line with the decision of most MNCs selling their products in India to establish their own marketing network, as soon as the sector is free from control of OCC. Most of them have either walked out or kept their decision on hold so far as greenfield refining projects planned in India, because margins are far higher in downstream products.

Although so far volume sales of Shell, Exxon, Mobil, brands have been less than that of IOC's Servo brand, and that of Castrol's products, the continuous visibility of these high-end brands of lubricants would help these companies push their other products too and push volume sales after the decontrol of the sector.

Manish Saxena