MUMBAI, February 14: Pennzoil India, a subsidiary of Pennzoil Products (USA) and one of the top ten players in the Indian lube industry, is doubling its production capacity to 70,000 kilo litres per annum. The company will invest around Rs 5.5 crore in modernising and upgrading its plant at Turbhe to achieve the increased output.Most of the demand will be fuelled by the automotive segment with the two-wheelers and passenger cars contributing a major chunk, according to Vivek Chandra, who recently took over as Pennzoil's managing director. "I don't see this segment stagnating. Although growth has slowed down to two to three per cent, new models demanding superior quality lubes are entering the market," says Chandra.
The Rs 100 crore MNC unit will also spruce up its marketing and distribution to reach small towns like Agra, Srikakulam and Sultanpur from what is now mainly concentrated in class one towns and cities. It has increased its advertising budget by a whopping 100 per cent in 1997 as compared to1996 figures. Refusing to divulge the exact sum, Chandra says the increased adspend is targetted at making it the second largest player in the market in the next five years. However, he is quick to point that Pennzoil is targetting only the 35 per cent share with private players.
"PSUs have an unfair edge because petrol pumps are out of bounds for MNCs like us," he explains. The market is dominated by three public sector units -- IOC, HPCL, BPCL -- and together they account for 65 per cent of the total consumption. Although this makes them the largest players in the industry their share has dwindled from 85 per cent in 1992.
Among the private players, Castrol, with its 75-year-old presence in the country, is the only significant competitor to the PSUs. It enjoys around 18 per cent of the market share. The remaining 17 per cent is distributed among private players.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
