Gulf Oil Lubricants India (GOLIL) was listed on Thursday on the BSE and NSE post the requisite approvals after it demerged from Gulf Oil Corporation. The demerger was aimed at unlocking the value of the lubricant business. In an interview with FE, Sanjay G Hinduja, chairman of Gulf Oil International (parent of GOLIL), said GOLIL will continue to outperform the industry by enhancing its distribution, investing in the brand and securing more OEM tie-ups. Excerpts:
Your thoughts on the business outlook for the sector.
The company has been growing in double digits for the last few years and we are expecting to continue the same growth pattern going forward.
What is your market share?
In the bazaar sector, we have a 7% market share at the moment. We are number 6 today and our goal is to be one of the top 3 lubricant brands in the industry in terms of volumes. The company will continue to outperform the industry’s growth by enhancing its distribution, investing in the brand & securing more OEM tie-ups. Further, this is in line with our global vision of being one of the largest independent downstream players in Lubricants & Speciality Chemicals in the world.
What are key challenges for the business?
We have challenges in terms of capacity; that's why we are going for the second plant. The other challenge is foray into the rural areas; we plan to give a big push to our rural strategy. OEM tie-ups are key in this business and, in the next two weeks, we are going to announce a major OEM tie-up.
Do you have plans to list any other subsidiary?
At the moment no, but I'm sure if you see me in the next 18-24 months, another of our subsidiaries might be ready for listing.
Could we see some public issues of Gulf Oil Lubricants to raise more capital from the market?
In the foreseeable future, no. This is primarily because the company is generating cash and even 50% of the cash required for setting up the second plant will be raised from internal generation.
Could you elaborate on your future plans.
We are going ahead with a second plant in Chennai. We have acquired land and are going to start construction this year. The project cost is estimated to be R130-140 crore and the plant will have a capacity of 75,000 tonne per annum, the same capacity as our first