K.Venkateshwar.Rao

Lubricant demand volumes in Sri Lanka shrank 0.3 percent in 2018, while the sales value of those products rose 3.1 percent, according to a market report released recently by the industry’s regulator, the Public Utilities Commission of Sri Lanka. The country consumed 57,794 metric tons of finished lubes valued at 27.3 million Sri Lankan rupees (U.S. $152,000) last year, compared to 57,990 tons and Rs 26.5 million in 2017. Chevron Ceylon Ltd. remained the market leader, but its share of sales declined 2.5 percent to 21,571 tons, or 37 percent of demand. Its nearest competitor again was  Lanka IOC  – local subsidiary of  Indian Oil Corp. Ltd.  – whose share swelled 0.5 percent to 10,176 tons, or 17.6 percent.  Laugfs Holdings Ltd.  was third at 5,193 tons for 9 percent, up from 7.7 percent in 2017. Automotive lubricants accounted for 74 percent of demand, and sales of that category rose 1 percent during 2018. Industrial lubricants constituted 16 perce...

Hyrax to Open Sri Lanka Blending Plant BY K. VENKATESHWAR RAO Malaysian company  Hyrax Oil  plans to open a lubricant blending plant next week at an oil terminal in Muthurajawela, Sri Lanka. “The plant was built through a strategic collaboration with the  Ceylon Petroleum Corp.  under a build, operate, and transfer agreement, where both parties forged a supply agreement for increased collaboration and partnership,” Hyrax Oil Media Advisor Dhanushka Jayawardene told Lube Report. “This is the second lubricant blending plant for Hyrax Oil, [with] the first being in Johannesburg, South Africa.” The 43,000 metric tons per year lubricant blending plant was to be built with an investment of U.S. $30 million on a 2.2 hectare site, according to a report by Bernama, Malaysia’s state-owned news agency, in May 2016 when the project was first announced. In May 2014, Sri Lanka’s Ministry of Petroleum Resources Development approved the two companies’ proposal to establish ...

Profits Up for Gulf, Apar; Down for Savita BY K. VENKATESHWAR RAO Gulf Oil Lubricants India Ltd.  and  Apar Industries  each reported healthy increases in profit for their fourth quarter, due to a jump in sales. Meanwhile,  Savita Oil Technologies Ltd.  reported a decline in net profit but an increase in total revenues. Gulf Oil Lubricants Gulf Oil Lubricants India Ltd., a Hinduja Group company, reported a net profit of Rs 47.6 crore (Rs 475.7 million or U.S. $6.9 million) for the three months ended March 31, up 15 percent from the year-earlier period. For the full fiscal year, Mumbai-based Gulf Oil Lubricants India reported a net profit of Rs 177.78 crore up 12.12 percent from the same period of 2017-2018. Total income for the quarter jumped almost 17 percent to Rs 445 crore from Rs 380.4 crore during the same period last year. Full-year total income for the company increased to Rs 1,735.34 crore, up almost 24 percent from the previous year’s Rs 1,4...

Lub-rref (Bangladesh) Ltd. , the largest lubricating oil blending plant in Bangladesh, is poised for expansion and growth with the proceeds of its upcoming initial public offering. The company has not disclosed the amount it plans to raise. Lub-rref Founder and CEO Mohammad Yusuf said the IPO is  likely to open within the next three months. Photo courtesy of Lub-rref (Bangladesh) Ltd. Lub-rref (Bangladesh) Ltd., the largest lubricating oil blending plant in Bangladesh, is poised for expansion and growth with the proceeds of its upcoming initial public offering. Lub-rref would use the IPO proceeds for expansion of existing capacity and partial payment of old bank debts, Yusuf said. He added that the IPO would position the company as Bangladesh’s “premier” lube blender. Additional capacity would include transformer oil manufacturing, viscosity improver solubilizing and production of hydraulic, turbine and engine oils. An accredited laboratory is also...

Chevron Lubricants Lanka PLC  reported a 51 percent drop in profit year over year to 267.1 million Sri Lankan rupees (U.S. $1.5 million) in its fourth quarter, and a 22 percent decline in full-year profit to just under Rs 2 billion. Operating profit for the three months ended Dec. 31 stood at Rs 368 million, down 50 percent from Rs 737 million in the same period of 2017. For the full year, operating profit declined 19 percent to Rs 2.7 billion. In interim financial statements released to the Colombo Stock Exchange, Chevron Lubricants Lanka reported that its revenues from lubricants declined by 21 percent to Rs. 2.2 million in the fourth quarter, down from Rs 2.8 million during the year earlier period. For the full year, revenues reached Rs 10.9 billion, down 2 percent from 2017. Although Chevron Lubricants Lanka officials were not available for comment, industry observers believe intense price competition in the market is one reason for the decline in Chevron Lanka’s earni...

BY K. VENKATESHWAR RAO A lube blending plant in Chhattisgarh, India, has been halted following an explosion that seriously injured one employee. Officials at Parvati Lubricants were unable to give a time frame for resuming production due to resulting legal action. Parvati Lubricants owner Vinay Sharma told Lube Report that the incident took place due to gas formation in a storage tank during renovation; the air passage hole in the tank was blocked during welding work. Four or five laborers were engaged in the repair without proper safety precautions. As a result, one laborer, Bhola Das, has been seriously injured, and others have sustained minor injuries. Photo: K. Venkateshwar Rao The incident occurred as a result of gas formation in this storage tank during renovation work. The police have booked Parvati Lubricants’ owners under Sections 285, 287 and 336 of the Indian Penal Code, and are waiting for the factory inspector’s report before taking any further action, said M...

BY K. VENKATESHWAR RAO Gulf Oil Lubricants India Ltd.  reported a decline in net profit for its second quarter ending Sept. 30, compared to the same period a year earlier. Net profit for the Mumbai-based company stood at Rs 4,029 lakhs (Rs 402.91 million or U.S. $5.65 million) down from Rs. 4,042 lakhs during the same period last year. Revenue from operations for the second quarter leaped 29 percent to Rs 41,721 lakhs. During For the April-September period, the Hinduja Group company reported a 7.6 percent uptick in net profit year-on-year to Rs 8,042 lakhs, compared to Rs. 7,471 lakhs. Revenues reached Rs 80,757 lakhs for the six-month period, up 24 percent from Rs 64,918 lakhs during the same period last year. Gulf Oil’s Managing Director Ravi Chawla noted that revenues from operations for the period up to June 30, 2017 includes excise duty, which was discontinued upon the implementation of the Goods and Services Tax in India on July 1, 2017. Because of the restructuring...

BY K. VENKATESHWAR RAO The Sri Lankan government invited lubricant suppliers this month to apply for the new permits that it plans to issue for producing and selling products on the island nation. Existing players, continued to oppose the plan, complaining that the market is not large enough to support any new competition. Thirteen companies are currently authorized to sell finished lubes in Sri Lanka. In 2017, the country consumed 58,000 metric tons of finished lubes valued at Rs 26.5 Billion (U.S. $16 million). The Petroleum Ministry’s request for qualifications is part of a plan to create healthy competition for supply of quality lubricants. The government requires companies that blend or sell lubricants within the country to have a license. The government has not stated the number of new licenses that will be granted. Companies applying for them must have at least five years of experience in the lubricant business. A minimum investment of $5 million i...

Lub-rref (Bangladesh) Ltd. will open a 50,000 metric tons per year API Group II rerefinery by March 2019 with the help of American used oil regeneration technology provider Chemical Engineering Partners. The plant will be the country’s largest base oil source and its first to make Group II. The Bangladeshi rerefiner and lubricants supplier earlier this month contracted CEP to design the rerefinery on a 50,000-square meter site along the Karnaphuli River in the Julda district near Chittagong. Lub-rref will license  CEP ’s vacuum distillation and hydrotreating technology at the plant, which will have capacity to convert around 70,000 tons of spent oil into around 50,000 t/y of Group II base oils. Observers have pegged Bangladesh’s annual finished lubricant demand at around 75,000 to 80,000 tons. Collectively, five suppliers – Mobil, Bangladesh Petroleum, Total, Shell and Castrol – command 63 percent of the market. Lub-rref expects the new project to help it increase its lub...

In the year since its January 2016 initial public offering, Pakistan’s Hi-Tech Lubricants Ltd. has invested around 1.2 billion rupees (U.S. $11.4 million) of the funds it raised, mostly on its foray into the fuel retail and service center businesses, which it said will be a boon to its lubricants sales. “To increase infiltration into the market, we are venturing into the [fuel marketing] business,” CEO Hassan Tahir told Lube Report Asia. “With licenses already received, we have plans to open 300 fuel stations nationwide by the end of 2020.” Hi-Tech expects fuels to make up around 45 percent of its total revenue within a year after its first sale, which it forecasts to occur in the last quarter of 2017 or first quarter of 2018. By its fourth year of operations, Hi-Tech said revenue from its fuels sales alone could be up to 250 percent higher than its current income. Hi-Tech will market mostly motor spirit and high-speed diesel products. Fuel retail will help Hi-Tech grow its lub...

A March turnaround at the only Pakistan refinery with a base oil unit may cause a temporary shortage in the company's supply of lubricant feedstock. Pakistan’s second-largest fuels refinery, operated by privately owned National Refinery Ltd., will be shut for at least 15 days starting March 10 for upgrades and maintenance. NRL will revamp the Karachi refinery’s crude oil processing unit, which has capacity to produce more than 2 million metric tons per year of various fuels, along with its two base stock trains, which can produce a combined 183,000 t/y of API Group I base oils. “The upgrade project of the refinery’s diesel hydrodesulfurization, isomerization and [base oil] units will affect the production of diesel and petrol as well as lubes for some time, but [NRL] will cover up the shortfall with increased production on completion of the upgrade projects,” a senior planning engineer at NRL told Lube Report Asia. The official added that the project is intended to ...

BY K. VENKATESHWAR RAO • JANUARY 24, 2017 Standard Greases & Specialties Ltd. had intended to gain control of the Andrew Yule Group-managed Tide Water Oil Ltd. upon becoming its largest shareholder last year, but to date it has cooperated with existing management to focus on the growth of the company. In September 2015, Mumbai-based Standard Greases, along with Janus Consolidated Finance Pvt., Alpha TC Holdings Pte., and Tata Capital Growth Fund, made an open offer to pay up to Rs 377 crore (Rs 3.77 billion or U.S. $57 million) for a controlling stake of 226,512 shares of Tide Water stock. Standard Greases later increased the per-share price of its offer, boosting the overall value of the bid to Rs 397 crore. When the offer closed on Dec. 30, 2015, Standard Greases’ and Janus’ combined shares amounted to 29.38 percent, making the company Tide Water’s largest shareholder. Based on Standard Greases’ 27.69 percent of shares, and Janus’ 1.69 percent, Tide Water’s board decided ...

India Shifting Toward Group II BY K. VENKATESHWAR RAO • APRIL 12, 2016 MUMBAI – India’s lubricant market may be lagging developed markets in terms of the quality of finished products and the base stocks that it uses, but it has begun a significant shift toward API Group II stocks, an official from Kline & Co. consultants told an industry meeting here last week. Project Manager Anuj Kumar Singh told the ICIS Indian Base Oils & Lubricants Conference that India’s shift will be driven by the same forces that affected Europe, North America and Japan – tighter air emissions regulations, fuel economy mandates and lube performance demands by automakers – along with attractive pricing for Group II. “This will create greater demand for Group II and other high quality base stocks and limit the market for Group I,” Kumar said. India is the world’s third-largest lubricant using country, having consumed 2.3 million metric tons in 2015, Kline estimates. That volume, which includes...

BY K. VENKATESHWAR RAO • APRIL 19, 2016 MUMBAI – India’s lubricant market attracts much attention because of its trends for size and quality. But several of its neighbors – Bangladesh, Sri Lanka and Nepal – are also growing at attractive rates, an industry insider told a conference here this month. At the ICIS India Base Oils & Lubricants Conference on April 5, Gulf Oil Lubricants India Ltd. Managing Director Ravi Chawla said lube demand in all three countries is growing due to economic expansion, growing vehicle parcs and investment in infrastructure. Expansion of the country’s power grid is expected to help drive growth in Bangladesh’s lubricant market. Bangladesh is the biggest of the three markets, with annual lube demand of 73,000 metric tons, Gulf estimates. Lubricant consumption typically tracks economic activity, and some of the things that make the country an attractive lube market are the trends of its economy. It is among the “Next 11” group of countries identi...