“Our objective is to be among top 3 lubricants companies among private sector in the country and enhance the value for all stakeholders,” says Ravi Chawla, Managing Director, GOLIL

 Hinduja Group company Gulf Oil Lubricants India, the demerged lubricants business of Gulf Oil Corporation, made a debut listing on the BSE and the NSE on 31st July. In an exclusive interview with Subhajit Roy, Ravi Chawla outlines the company’s future roadmap.

Gulf Oil Lubricants India is being listed on the BSE. How do you look at this occasion?
With the demerger of the lubricants business of Gulf Oil Corporation Ltd. to Gulf Oil Lubricants India Ltd (GOLIL), the new lubricant company GOLIL will manage the standalone lubricant business in India under “Gulf Oil” brand. The lubricant business has reached the size and scale to take up its future growth journey in a more focused manner independently. GOLIL, which will be a company with a pure lubricants play, will bring in additional focus and resources to increase its business revenues and market shares in the lubricant space in India. Given the positive outlook for the economy – Gulf Oil is well placed to increase its market shares in automotive and industrial lubricants.

How do you wish to consolidate your market position with this step?
GULF brand is pioneer in value proposition of long drain oils in all lubricant segments like DEO, 4T and PCMO. In a recent brand survey, Gulf has emerged as the no. 2 /3 brand in terms of awareness recall in key segments. Our targets are to grow 2-3 times market growth rate in our focus segments and thus gain market share from competition. New OEM tie-ups will also help gain additional market share.

Being a BSE-listed company, what are your long- and short-term objectives?
Listing at BSE is the outcome of demerger of lubricants division from Gulf Oil Corporation Ltd. to GOLIL. A separate standalone company will bring more focussed approach for the business with additional resources and there will also be proper bench marking with peers and market leader. 

While continuing to grow our strong DEO base and our recently gained 4T- MCO (motorcycle) base, our focus is to improve passenger car motor oils segment by launching new products including synthetic PCMO range. Tractors have shown very impressive growth in another dull automotive market and hence we have increased focus to gain tractor oil market share and tied up with major tractor OEM recently. Further, like other lube players, we would also like to grow our industrial segment from current 25 per cent to around 35 per cent over next few years.
Our objective is to be among top 3 lubricants companies among private sector in the country and enhance the value for all stakeholders.

We have also maintained 40-45 per cent dividend payout ratio in the past few years and objective is to maintain the same in future after considering the future fund requirements for CAPEX and normal working capital.

Are you open to any kind of merger and acquisition?
GOLIL are open to all growth options including inorganic growth in lubricant space if something available to compliment its current growth strategies. We may look at something in synergy products also.

Do you need to work on the product strategy?
Gulf Oil operations in India  have been built on its core strategies of leveraging technology in its longer drain lubricants, increasing reach and brand building to increase its market shares in focused segments. These will continue and in addition the company is also targeting to increase its presence in the tractor segment with OEM tie-ups and to focus on exports to neighbouring countries in the coming months.
The company has also put in place plans to enhance manufacturing capacities at its current plant at Silvassa and is also in an advanced stage of setting up a new plant near Chennai.

How is the overall market for lubricants shaping up?
Past two years have been slightly tough for the lubricant industry but with expected uptick in the economy lead by infrastructure, mining and overall industrial production, which should boost the demand for both automotive and industrial lubricants, GOLIL is optimistic of a positive sign for the lubricant industry.

Our targets are to grow 2-3 times market growth rate in our focus segments and thus gain market share from competition. New OEM tie-ups will also help gain additional market share.

The off-highway and HCV markets in India are growing. How are you trying to capitalise on this opportunity?
For off-highway we do market our lubes to infrastructure companies and also work with OEM’s. HCV as mentioned we already enjoy a good presence and work closely with leading OEM in this area too.