Tide Water to sell its land in Chennai and Mumbai

Lubricant maker Tide Water Co (India) Ltd is planning to unlock its land holding in Mumbai and Chennai.

In Mumbai, it has an acre in the north-eastern Chembur suburb, which is now witnessing feverish property development. By disposing of the land, the maker of the Veedol brand of lubes plans to shift to Navi Mumbai. It has decided to follow a similar strategy in Chennai also.

“We have decided to shift our plant at Deonar in Chembur, spread over an acre, and move to Navi Mumbai where we plan to pick up three acres. In Chennai, our unit is located in a cramped locality in Royapuram, which will now be shifted to a 10-acre plot elsewhere,” Tide Water chairman Kallol Datta said.

Explaining the strategy to move away from Deonar, Datta said the area was developed as an industrial suburb but today it is largely a residential one. “New high-rise apartments are coming up and so we decided to unlock its value, which will also help us to move to a place where we will have more space for our filling and packaging operations,” Datta said on the sidelines of the annual general meeting of the company here Tuesday.

Apart from Mumbai and Chennai, Tide Water has blending and packaging plants in Faridabad, Silvassa and Howrah.

The company, meanwhile, has been able to renew its agreement with Nippon Oil Corp, the largest petroleum company in Japan, for marketing its range of lubricants in India for another five years.

“The 1993 agreement with Nippon Oil expired this year and has been renewed with a five-year agreement,” Datta said.

Tide Water had entered into an agreement with Mitsubishi Oil, now part of the $42.85 billion Nippon Oil conglomerate, under which it produces and sells Nippon’s Eneos brand of lubricants, a market leader in Japan, in India. This apart, Tide Water markets its own Veedol brand, which enjoys a market share of 10% in the retail segment.

The company is aiming for Rs 500-crore turnover during the current financial year, up from Rs 420.57 crore clocked in 2006-07.

Sale of Veedol contributed 88% to Tide Water’s turnover in 2006-07, and the balance 12% came from sale of the Eneos brand.

“Veedol is targeted at the retail segment, while Eneos caters to the institutional or the OEM segment, a market in which we are now trying to expand,” chief executive RN Ghosal said.