Date:22/12/2004 URL: http://www.thehindubusinessline.com/2004/12/22/stories/2004122201690200.htm

Back Gulf Oil plans revamp of lubricants business

Pratim Ranjan Bose

Kolkata , Dec. 21

HAVING carried out a top management recast recently with the introduction of new faces, the lubricants division of Gulf Oil Corporation is now focusing on exports and overseas business activities for growth.

The company is also reshaping the division into a `lubrication systems business' with the introduction of an array of products and services, including auto maintenance services.

Company sources said that Gulf Oil is now planning a major expansion of its Chinese business with the setting up of a blending unit through wholly owned Gulf Oil China.

Gulf Oil Indonesia, a joint venture, was recently converted into a wholly owned subsidiary after the local partner opted to walk out of the arrangement.

While Philippines and Bangladesh already have a Gulf Oil outfit, the company is now actively considering setting up subsidiaries in two other South-East Asian countries.

The sources said that the company was charting big plans in China. "We have a small outfit there which is now being substantially expanded."This apart, Gulf Oil Corporation is strengthening its distribution network in Thailand, Myanmar, Sri Lanka, Nepal and in smaller African countries like Madagascar.

The division, which registered Rs 240 crore turnover last fiscal, has witnessed a spurt in exports. From just Rs 2 crore exports last fiscal, Gulf is expected to end the current fiscal with an export of Rs 15-20 crore.

The company is now working on a strategy to reshape the lubricants business beginning with the launch of several products and services.

Admitting that the company has been hamstrung by the lack of OE agreements (except with Ashok Leyland) and sales arrangements through retail oil outlets, the sources said: "Overall, avenues for growth in the traditional lubricants business are decreasing."

Among other measures, the company has recently struck a deal with Graco of the US for distribution and marketing of lube dispensing units to major buyers.

Targeting the automobile and industrial lubricants markets, the dispensing units will help major consumers prevent pilferage.

The sources described the marketing arrangement with Graco as a major breakthrough.