With a growth rate of 4 per cent till 2013, the Indian lubricant industry is looking forward to an exciting future, finds Shubhangi Bidwe.
It's an upward slide, to be sure. The world demand for lubricants, driven primarily by strong economic growth, is set to rise by over 2 per cent annually to 41 million metric tonne by 2015. The fastest growth will be registered in Asia, followed by the Africa-Middle East region. "The Indian market for lubricants is expected to grow by around 4 per cent on a year on year basis till 2013 and cross a total size of 2 million metric tonne," says Suresh Kalra, AVP & Head, C&I, Valvoline Cummins Ltd
. The market is currently at around 1.8 million metric tonne annually.
"The Indian lubricant market can be classified into automotive lubricants and industry lubricants," explains Jiten Goswami, Chairman, Motul Lubricants
. "The market for automotive lubricants encompasses 55 per cent of the total lubricant market in India." The demand for these lubricants (further divided into diesel lubes and petrol lubes) has grown manifold in the past few years, driven primarily by zooming car and motorcycle sales. On the other hand, the market for industrial lubricants is around 35 per cent. These lubricants have seen strong demand in the mining and construction sectors.Changing dynamics
With the advent of new machinery and equipment, consumers are opting for newer and cleaner technologies, as Kalra tells us. "In the coming years, we are likely to see an expanded market for new-generation products like the CI4+ and CJ4 engine oils and fully synthetic oils." To this, Naveen Shukla, Field Engineering Manager-Asia Pacific Region, Mobil Industrial Lubricants (MIL)
, adds, "Customers are also opting for cost effective solutions to deal with unscheduled breakdowns and unwanted downtime. Therefore, a lot of demand is shifting towards synthetic lubricants."
Several bio-based lubricants are also making inroads into the market. These are often based on vegetable oils and offer benefits like a higher viscosity index, higher safety on a shop floor and cost savings on account of less maintenance, manpower, storage and disposal costs.
Yet, not all manufacturers are in favour of these products. Kalra, for instance, does not foresee them as a credible alternative to oil-based lubricants. On the other hand, Goswami believes they will not be able to match the performance levels of synthetic, ester-based synthetic products or Group 3 mineral products endorsed by most global OE manufacturers.Ecofriendly lubricants
Along with bio-lubricants, another emerging trend is that of environment-friendly lubricants. Valvoline is in the process of establishing a new plant in Ambernath, Maharashtra, which will be the first fully green lubricant manufacturing facility in India. "The products offered at this facility will be consistent with the latest advances in engine technology that place strict controls on emissions," reveals Kalra. "We are the only company approved in India to market diesel exhaust fluid aqueous urea solution for use in SCR engines. Our product Air Shield is already in use in the market. The company has recently launched the pro fleet range of fully synthetic engine oils in the 10W40 API category. These oils are recommended by global OEMs like Mercedes and Scania. We have also launched Premium Blue CI4+ oils in India that have been approved exclusively by Tata Motors."
For its part, MIL has launched Mobil DTNXL. "This is a new energy-efficient, high-viscosity, Greenfield product that offers high-productivity, lower downtime and energy-efficiency," avers Shukla. The company manufactures and markets products in line with emission norms. Motul too has joined the bandwagon by launching the new Tekma Mega CI 4 15w40 that is mainly used for EURO 4 engines.Impact of base oil prices
Despite the rush of products in the market, lubricant prices remain volatile. Why? "Almost 7599 per cent of our lubricants is made of up of base oil, the prices of which are controlled by the fluctuations in the petroleum market," responds Kalra. "This is one of the reasons most companies revise their prices multiple times during the year. We, as a policy, use the best products in group II and group III base oils. We also try to soften the impact of these fluctuations on our customers. Hence, we offer them value-added services such as lube testing, extended drains, training operators to increase efficiency and dispensing equipment to prevent wastage and pilferage."
Goswami tends to agree. "The lubricant business is very volatile owing to its dependence on raw materials like base oils and additives," he admits. "This market is similar to the FMCG business, and prices depend on several factors. One of these is the price of diesel, which largely depends on the supply-demand situation across the world."A robust future
Still, in the current climate, demand shows no sign of tapering off. "With rampant growth in the country's infrastructure, demand for lubricants is indeed dynamic," beams Shukla. His company has robust plans for the Indian market. "We want to collaborate with equipment makers and have positioned people to forge strong relations in the market," he reveals. "We are bullish in the Indian market. It gives us an opportunity to help our customers, and we plan to create an exclusive club of industry leaders who will meet once a year and discuss important issues plaguing the industry. The first such meet will take place in October this year. In November, we plan to participate in Excon 2011 and introduce some new products in the market."We'll be there to take note!
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