New tie-ups, new product introductions driven by new technologies and new brand introductions – the lubricant market in the country has witnessed some serious action in the past few years. In the thick of such action is GP Petroleums Ltd (GPPL). We recently caught up with Hari Prakash M, CEO, GP Petroleums Ltd, to understand his strategy for the Indian market – how he foresees the future, and what he expects would be the growth drivers for the business in the coming years.
TECHNOLOGY AT THE CORE
At the core of GP Petroleums’ growth strategy lies its focus on technology. In the industrial lubricants business, it is working on building its B2B connect, while in the automotive sector – in addition to technology – the focus has been on enhancing its brand presence. While the company has roped in popular cricketer Suresh Raina as its brand ambassador for the IPOL range of lubricants, it has also lined up products that are likely to further strengthen its market position in India.
In the industrial space, GPPL is coming up with synthetic and semi-synthetic lubricants, and the auto sector will see the introduction of IPOL products aimed at meeting BS IV, and subsequently, BS VI emission norms. By the end of this year, plans are afoot to launch in the market gear transmission oil from the Repsol brand. Repsol, incidentally, is a Spanish oil major that GPPL got into a tie-up with in 2016, in a bid to gain market share in the premium segment of the Indian automotive lubricants industry.
Since its introduction in the Indian market, the REPSOL brand has created a lot of buzz, claimed Prakash. Although the association with Repsol is just about a year old, the two companies are already discussing possibilities of further enhancing the tie-up. Repsol is keen to join GPPL’s projects, said Prakash, but it’s not yet clear as to how and when such opportunities would materialise.
“Logically, we would also like to get into a closer partnership with them in the future. This could be in technology development or even through investments, but it is too early for us to talk about it,” Prakash noted. The Indian entity is also considering selling Repsol products in surrounding markets, an offer that the Spanish company has made. Prakash, however, is mindful of the opportunities that still exist in the Indian market, and would need to ensure domestic growth before looking at business outside. In fact, the mandate from its parent GP Global is to sell the IPOL range of products in neighbouring countries, as well as the African and South East Asian markets.
The company is focussing on building its distributor network for Repsol in India. From the 80 distributors it had last year, the target is to reach 200 by the year-end, said Prakash. The target over the next three years is to double Repsol’s market share in India, which Prakash believes will take the brand into the big league dominated currently by established players such as Castrol and Shell, etc.
PRODUCTS FOR THE FUTURE
Electromobility seems to be the buzzword in the automotive industry today, and Prakash is aware of the future challenges. Electric vehicles will become mainstream in the foreseeable future, but despite major disruptions in that area, the need for lubricants will continue to increase, he said. If you look at the product offerings from GPPL, the one thing that is missing is coolants. The company realises the gap, and has now decided to introduce coolants to the market in a few months, Prakash said without specifically giving us a timeline.
“Coolants will be a new product for us. We’ll outsource it till such time our new plant comes up, but going forward, with new engines we will get into a technology tie-up,” he said. The company proposes to set-up a new greenfield lubricant plant in Saronda, Gujarat. The estimated capacity of plant will be 100,000 kl, which will replace the combined production capacity of Vasai and Daman plants.
The other interesting product GPPL plans to get into is a diesel exhaust fluid additive called AdBlue. The diesel exhaust fluid is used as a consumable in selective catalytic reduction (SCR) in order to lower NOx concentration in the diesel exhaust emissions from diesel engines.
Part of $ 3.5 bn UAE-based conglomerate GP Global (earlier known as Gulf Petrochem), GPPL is looking at growing its business in the country through a host of new initiatives, both organic and inorganic. Currently, about 15-20 % of its revenues come from the automotive sector, while 45 % is contributed by the industrial lubricants business. GPPL is keen to ramp up the automotive share to about 30 % in the next five years. For Prakash, this is potentially achievable much earlier, and he said the company might look at revising the target in the next two years.
The last few years have been particularly good for the company. While the lubricant industry is growing at about 3 % annually, GPPL has had a 13 % growth in its automotive business. The company clearly seems to be eating into someone else’s business in India, and Prakash isn’t complaining. “The market is pretty big and cluttered. How we take ourselves out of this clutter and create a niche for ourselves, will determine how we identify ourselves in the market. But I expect the growth trend to continue,” he concluded.
TEXT: Deepangshu Dev Sarmah