CHAPTER IV

AN OVERVIEW OF LUBRICATING OIL INDUSTRY

4.1 Introduction
4.2 The History of Industrial Lubricating Oil
4.3 Lubricant Industry Segmentation
4.4 Tie – up with Original Equipment Manufacturers
4.5 About Lubricants

4.6 Manufacture of Lubricating Oil

4.7 Manufacturers of Lubricating Oil

4.8 Summary
 4.1 Introduction

These are exciting times for the lube industry in India. Each one of
the vast contingent of 22 multinationals and a total of 80 big and small
players are vying for a pie of the Rs.5,500 crore market. Worldwide
established brands, some of them new to India like Shell, Mobil, Caltex,
Elf and Pennzoil are fighting it out with established Indian brands like
Servo and others to establish their foothold in the sixth largest lubricant
market in the world. Compared to the average world consumption of 35
million tons per annum and Asia-Pacific region consumption of 7.5
million tons, the Indian lube industry with an annual demand of 1
million ton is just behind Japan and China in Asia having a demand
growth rate of 4 percent compared to the world growth rate ranging
between 0 to 2 percent. Within India, the consumption of lubricants is 35
percent in the western region, 26 percent in the southern region, 24
percent in the northern region and 15 percent in the eastern region.

Prior to 1992, the lube industry in India was controlled by the 4

major Public Sector Undertaking (PSU) Oil Companies namely Indian
Oil, Hindustan Petroleum, Bharath Petroleum and IBP and a handful of
private companies like Castrol, Gulf, Tidewater and others . With the
distribution and canalisation of base oil import being controlled by the
Government of India, the PSU oil companies controlled 90 percent of the
market share. The decanalisation of the lube base oil imports in 1993 by
the government followed by reduction of import duty on lube base oils
from 85 percent to 30 percent and gradual scrapping of administered
pricing observed the announcement of almost a new lube venture every
month during 1994. Most of the new entrants formed associations with
Indian companies both in the private and public sectors. All these new

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 entrants are targeting for a very small share of the market considering
that even a 1 percent market share means a sale of Rs.55crores.

Indian Oil controlled 54 percent of the lube market out of the total
PSU’s market share of more than 90 percent during 1991-1992. The
government policy of deregulation followed by entry of multinationals
had its effect on the market dominance of PSU’s. This was followed by a
sudden entry of lot many players each one claiming to have some
international collaboration and a foreign brand name. This had its initial
impact and illusions in the market and the market became more volatile.
The present chapter traces the historical perspective of the lubricating oil
industry.

4.2 The History of Industrial Lubricating Oil

The history of industrial lubricating oil began as soon as man

discovered that reduced friction meant greater efficiency. There are many
types of industrial lubricating oils and each oil has been developed over
time to serve a different purpose.

In the olden days, hand or horse-powered machinery were often

made from very heavy, cast metal components. Thick industrial
lubricating oils were developed to reduce friction between these heavy
surfaces. Engineers were quick to recognise that proper use of the correct
industrial lubricant oil ensured smooth running of machines coupled with
a longer component life.

The steam engine signaled a new era in the history of industrial

lubricant oil. Steam engines could run faster and longer than any previous
machine produced but this created a brand new range of engineering
challenges.

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 Possibly the biggest challenge faced by engineers was to reduce the
amount of friction generated by their machines and at the same time to
reduce the heat generated by that friction. Excessive heat caused metal to
expand and expensive machines stopped working. It was more cost
effective to develop effective industrial lubricating oils than to replace
burnt out bearings.

As machines became faster and more complex and components

became lighter in weight, light weight industrial lubricating oils were
developed to cope up with the speed of operation and increased heat
generated by high speed machines. Highly viscous industrial lubricating
oils were developed to fill sumps and baths to constantly lubricate
delicate machinery. The lubricating oil was itself cooled by running it
through water and air cooled pipes.

As each new engineering challenge was met, a new industrial

lubricating oil was developed to fulfill its needs. The early days of the
lubricant industry saw a huge amount of development money spent on
creating efficient lubricating oils that could cope up with the constant
high speed movement of machine parts.

'Cutting edge' lubricating oil development funded by the pioneers

of the motor manufacturing industry and aimed at increasing the
efficiency of the motor car also enabled the development of new and
more efficient industrial lubricating oils for powered lathes, milling
machines and other heavy machines.

These early industrial lubricating oils were mostly refined

lubricants produced from mineral oils or crude oils - but the ever
increasing demand made by a fast moving industry prompted the

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development of a new kind of industrial lubricant in synthetic industrial
lubricating oil.

Synthetic lubricating oils are a complex scientifically engineered

alternative to petroleum-refined lubricants and provide a greater
performance and reliability. They combine enhanced mechanical and
chemical properties to deliver the required level of performance. Several
types of synthetic industrial lubricating oils containing organic
compounds or synthetic hydrocarbons have been developed over the
recent years.

High speed machines of all types - from state of the art commercial
printers to supersonic aircraft - rely on a wide range of industrial
lubricating oils to keep them running smoothly. Development is ongoing
and new lubricants are constantly required to meet the demands of
modern industrial engineering.

Some interesting facts about industrial lubricants are given below.

i. Industrial lubricants, fluids and coolants are highly specialised and

are carefully designed to perform specific tasks.

ii. Industrial lubricants are used for several reasons including the
reduction of thermal deformation.

iii. Industrial lubricants work as a cooling agent and can help to

prevent unwanted materials from adhering to surfaces.

iv. Industrial lubricants can help to reduce the effects of corrosion and
rust.

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 v. Industrial lubricants help to reduce wear and tear, prolong the life
of tools and other moving parts, reduce the time spent on
maintenance - and of course ultimately ensure a company's
profitability over the long term.

vi. Different industrial lubricants possess different properties and

features. Features that might be important when choosing a specific
oil include resistance to heat, oxidation inhibiting ability and bio -
degradability.

vii. Flash point is an important consideration when choosing an

industrial lubricating oil - the flash point is the lowest temperature
at which a liquid can emit enough vapours to cause an ignition.

viii. Some industrial lubricants contain a high percentage of water and

are generally known in the industry as HWCF - High Water
Content Fluids.

ix. Synthetic industrial lubricants generally provide an effective

resistance to heat as well as excellent cooling abilities - they don't
contain a petroleum or mineral oil base.

The production and consumption of lubricating oils in India is

presented in Table 4.1.

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 Table 4.1
Production and Consumption of Lubricating Oils in India

Production in Lakh Consumption in

S.No. Year
Metric Tons Lakh Metric Tons
1 1995 - 1996 6.33 9.56

2 1996 – 1997 6.19 10.13

3 1997 - 1998 5.92 10.81

4 1998 – 1999 5.86 10.97

5 1999 – 2000 7.30 12.43

6 2000 - 2001 6.85 11.15

7 2001 - 2002 6.51 11.37

8 2002 - 2003 6.84 12.50

9 2003 - 2004 6.66 14.27

10 2004 -2005 6.46 13.47

11 2005 - 2006 6.77 20.81

12 2006 - 2007 8.25 19.00

13 2007 - 2008 8.80 22.90

14 2008 - 2009 8.70 21.49

Source: www.mospi.nic.in
It can be inferred from Table 4.1 that consumption of lubricating
oils in India has always been above the production levels and this
probably has been the reason for more players to enter this highly
competitive market.

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4.3 Lubricant Industry Segmentation

The lubricant industry can be divided into two major categories –

Automotive and Industrial grade of lubricants. The industrial segment
basically comprises of core sector industries like defence, railways, state
transport undertakings, steel plants, coal mines, fertilisers, power houses,
chemicals and heavy engineering industries. In the industrial segment,
the PSU’s could successfully maintain their stronghold due to the reason
that the requirement is mostly end use specific, customer focused,
productivity linked and service oriented. Here, price, quality,
performance track record, research and development infrastructure for
technology upgradation and product development for end use specific
application and after sales service play the most significant role. Fast
moving consumer goods technique of promotion and creating illusions
take a back seat. Indian Oil virtually dominated and continues to
dominate this sector through their proven record of quality products and
vast network of professionalised pre-sales and after sales service.

But the automotive segment which accounts for a major share of 67

percent of the lubricant market became a soft target for the new entrants
and here private sector players could immediately consolidate their
market share by adopting fast moving consumer goods techniques. PSU
oil companies in general and IOC in particular initially restricted their
channel of distribution through their large infrastructure of marketing
network – petrol stations and distributor network. The focus happened to
be on ensuring quality and customer accountability and restrict
mushrooming of spurious trade in the bazaar through the marketing
channels where some kind of control could be exercised by the company.
The major thrust of industry leaders like Indian Oil at this juncture was

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 to promote brand visibility and creation of brand image through
endorsement, TV advertisements and image building at retail sites.

The end use pattern of lubricants in India is presented in Table 4.2.

Table 4.2
End use pattern of Lubricants in India

Percentage
S.No. Description
Consumption
1 Auto-Engine Oils 57.7
2 Auto - Gear Oils 6
3 Hydraulic Oils 11.2
4 Metal Working Oils 9.1
5 Compressor Oils 4.1
6 Transformer Oils 4.3
7 Greases 4.9
8 Industrial Greases 2.7
Total 100
Source: www.mospi.nic.in

It can be inferred from Table 4.2 that auto - engine oils sector
accounts for 57.7 percent of the total consumption of lubricants produced
in India, followed by 11.2 percent by hydraulic oils, 9.1 percent by metal
working oils, 6 percent by auto - gear oils, 4.9 percent by greases, 4.3
percent by transformer oils, 4.1 percent by compressor oils and the
remaining 2.7 percent by industrial greases. It can be concluded that a
majority (57.7%) of the total consumption of lubricants produced in
India is by the auto - engine oil sector.

4.4 Tie – up with Original Equipment Manufacturers

Among the PSU oil companies, Indian oil is one company which
has been giving utmost importance for tie ups with Original Equipment

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 Manufacturers (OEM’s) after signing agreements with major OEM’s like
Maruti Udyog, TELCO, Bajaj Auto, Kinetic Engineering, Skoda and the
like. In fact, Japanese vehicle manufacturers prefer to tie up with one or
two major oil manufacturers for the use of engine oil as a ‘Genuine
Spare Part’ of the vehicle whereas the American vehicle manufacturers
prefer to follow the American Petroleum Institute which defines the
performance parameters of engine oils. The Indian vehicle manufacturers
follow a route which is a combination of both. These inner strengths of
PSU’s and the quality policy adopted by them even attracted major
multinational players like Shell, Mobil & Caltex to enter into a tie-up
with a PSU to have access to their well established marketing network.

4.5 About Lubricants

A lubricant (sometimes referred to as ‘lube’) is a substance (often a

liquid) introduced between two moving surfaces to reduce the friction
between them, thereby reducing wear and improving efficiency. It may
also perform the functions of dissolving or transporting foreign particles
and distributing heat. A lubricant's ability to lubricate moving parts and
to reduce friction is the property known as lubricity.

Lubricating oils are basically made of two components – lube base

oil (which comes out from refineries after refining the crude oil) having
some inherent lubricating properties like any other liquid and the
performance enhancing chemical additives which are added to improve
different characteristics of the resultant mixture. Typically lubricants
contain 90 percent base oil (most often petroleum fractions called
mineral oils) and less than 10 percent additives. Vegetable oils or
synthetic liquids such as hydrogenated polyolefins, esters, silicones,
fluorocarbons and many others are sometimes used as base oils.

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 Although generally lubricants are based on one type of base oil or
another, it is quite possible to use mixtures of base oils to meet
performance requirements. Additives deliver reduced friction and wear,
increased viscosity, improved viscosity index, resistance to corrosion,
oxidation and contamination. 

When two solid surfaces are rubbed against each other, heat is
generated due to friction. If a thin film of any liquid is applied between
these two surfaces, friction is reduced and heat generation is also
reduced. Lubricating oils basically perform this simple duty be it inside
an engine, in a machine tool, in a gear box or in any other relevant
machinery application. In addition, lubricating oils are expected to
perform the duties of cooling, sealing, cleaning, lubricating and resisting
corrosion and wear.

  Lubricants perform the following key functions.

i. Keep moving parts apart

ii. Reduce friction
iii. Transfer heat
iv. Carry away contaminants and debris
v. Transmit power
vi. Protect against wear
vii. Prevent corrosion
viii. Act as a sealant for gases

4.6 Manufacture of Lubricating Oil

Since the Roman era, many liquids including water have been used
as lubricants to minimise friction, heat, and wear between mechanical
parts in contact with each other. Today, lubricating oil or lube oil is the

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most commonly used lubricant because of its wide range of possible
applications. The two basic categories of lube oil are mineral and
synthetic. Mineral oils are refined from naturally occurring petroleum or
crude oil. Synthetic oils are manufactured polyalphaolefins, which are
hydrocarbon-based polyglycols or ester oils.

Although there are many types of lube oils to choose from, mineral
oils are most commonly used because the supply of crude oil has
rendered them inexpensive - moreover, a large body of data on their
properties and use already exists. Another advantage of mineral based
lube oils is that they can be produced in a wide range of viscosities for
diverse applications. They range from low-viscosity oils, which consist of
hydrogen-carbon chains with molecular weights of around 200 atomic
mass units (amu), to highly viscous lubricants with molecular weights as
high as 1000 amu. Mineral based oils with different viscosities can even
be blended together to improve their performance in a given application.

First used in the aerospace industry, synthetic lubricants are usually

formulated for a specific application to which mineral oils are ill-suited.
For example, synthetics are used where extremely high operating
temperatures are encountered or where the lube oil must be fire resistant.

The raw material for producing lube oil is raw petroleum. Lube oils
are just one of the many fractions or components that can be derived from
raw petroleum, which emerges from an oil well as a yellow-to-black,
flammable, liquid mixture of thousands of hydrocarbons.

Chart 4.1 displays the manufacturing process of lubricating oil.

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 Chart 4.1
Manufacturing Process of Lubricating Oil

As displayed in Chart 4.1, manufacture of lubricating oil starts with

sedimentation.

4.6.1 Sedimentation

Crude oil is transported from the oil well to the refinery through a

pipeline or tanker ship. At the refinery, the oil undergoes sedimentation to

remove any water and solid contaminants, such as sand and rock that may
be suspended in it. During this process, the crude is pumped into large
holding tanks, where the water and oil are allowed to separate and
contaminants settle out of the oil.

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4.6.2 Fractionating

Then, the oil is pumped for heating in huge fractionating towers.

The crude oil is heated to about 700 degrees Fahrenheit (371 degrees
Celsius). At this temperature it breaks down into a mixture of hot vapour
and liquid that is then pumped into the bottom of the first of two
fractionating towers. A typical high-efficiency fractionating tower, 25 to
35 feet (7.6 to 10.6 meters) in diameter and up to 400 feet (122 meters)
tall, is constructed of high grade steel to resist the corrosive compounds
present in crude oils - inside, it is fitted with an ascending series of
condensate collecting trays. Within a tower, thousands of hydrocarbons in
crude oil are separated from each other by a process called fractional
distillation. Here, the hot hydrocarbon vapours float upward. As the
vapours rise up through the tower, the various fractions cool, condense,
and return to liquid form at different rates determined by their respective
boiling points (the lower the boiling point of the fraction, the higher it
rises before condensing) and are collected in different trays installed at
different levels in the tower. Natural gas reaches its boiling point first,
followed by gasoline, kerosene, fuel oil, lubricants and tars. In this tower,
normal atmospheric pressure is maintained continuously and about 80
percent of the crude oil vapourises.

The remaining 20 percent of the oil is then reheated and pumped

into a second tower, wherein vacuum pressure lowers the residual oil's
boiling point so that it can be made to vapourise at a lower temperature.
The heavier compounds with higher boiling points, such as tar and the
inorganic compounds, remain behind for further processing.

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4.6.3 Filtering and Solvent Extraction

After further processing to remove unwanted compounds, the lube

oil that has been collected in the two fractionating towers is passed
through several ultrafine filters which remove the remaining impurities.
One such contaminant, aromatics containing six-carbon rings that would
affect the lube oil's viscosity is removed through a process called solvent
extraction. Solvent extraction is possible because aromatics are more
soluble in the solvent than the lube oil fraction is. When the lube oil is
treated with the solvent, the aromatics dissolve and later after the solvent
has been removed, the aromatics can be recovered from it.

4.6.4 Additives, Inspection and Packing

Finally, the oil is mixed with additives to get the desired physical
properties (such as the ability to withstand low temperature). Common
additives include metals such as lead or metal sulphide, which enhance
the lube oil's ability to prevent scoring when metal surfaces come in
contact under extremely high pressures. High-molecular weight polymers
are another common additive and they improve viscosity, counteracting
the tendency of oils to thin at high temperatures. Nitrosomines are
employed as antioxidants and corrosion inhibitors because they neutralise
acids and form protective films on metal surfaces.

At this point, the lube oil is subjected to a variety of quality control

tests that assess its viscosity, specific gravity, colour, flash and fire
points. Oil that meets quality standards is then packed for sales and
distribution.

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4.6.5 Quality Control

Most applications of lube oils require that they be non-resinous,

pale-coloured, odourless and oxidation-resistant. Over a dozen physical
and chemical tests are used to classify and determine the grade of
lubricating oils. Common physical tests include measurements for
viscosity, specific gravity and colour while typical chemical tests include
those for flash and fire points.

Of all the properties, viscosity which is the lube oil's resistance to

flow at specific temperatures and pressures is probably the single most
important one. The application and operating temperature range are key
factors in determining the proper viscosity for oils. For example, if the oil
is too viscous, it offers too much resistance to the metal parts moving
against each other. On the other hand, if it is not viscous enough, it will
be squeezed out from between the mating surfaces and will not be able to
lubricate them sufficiently. The Saybolt Standard Universal Viscometer is
the standard instrument for determining viscosity of petroleum lubricants
between 70 and 210 degrees Fahrenheit (21 and 99 degrees Celsius).
Viscosity is measured in the Saybolt Universal second, which is the time
in seconds required for 50 milli-litres of oil to empty out of a Saybolt
viscometer cup through a calibrated tube orifice at a given temperature.

The specific gravity of oil depends on the refining method and the
types of additives present, such as lead, which gives the lube oil the
ability to resist extreme mating surface pressure and cold temperatures.
The lube oil's colour indicates the uniformity of a particular grade or
brand. The oil's flash and fire points vary with the crude oil's origin. The
flash point is the temperature to which oil has to be heated until sufficient
flammable vapour is driven off so that it will flash when brought into

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contact with a flame. The fire point is the higher temperature at which the
oil vapour will continue to burn when ignited. Performance factors
include wear prevention, oil sludge deposit formation and oil thickening.

Manufacture of quality lubricants is guided by two important

parameters – resourcing of consistent premium quality base oils and
incorporation of cost and performance effective additive technology
which is an effective tool to establish superiority over competitors. In this
area, research and development effort plays a significant role as it has to
be end use specific, location specific, environment specific and at the
same time cost effective. Just bringing in imported technology without
any own and defined resource of quality inputs like base oil may not be
suitable for Indian market conditions. Today, technology has become so
demanding and requirement is so stringent that leading institutes like API
(American Petroleum Institute) give performance approval on the basis of
identification and sourcing of base oils. Their approval is on crude
specific, refinery specific and base oil specific considerations. Bringing in
base oils taking leverage of decanalisation of imports and reduction of
duty, putting up blending plants at tax holiday locations to remain in the
cut throat competition and dumping may or may not yield far reaching
benefits. The need of the hour is long term commitment and not sheer
opportunism and with more competition expected in the coming years,
customers will also start realising the impact of such a focused approach.

4.7 Manufacturers of Lubricating Oil

Though there are many new entrants to the lube oil industry, the
industry is dominated by a few players with a reasonable market share. A
few such manufacturers of lubricating oil are explained below.

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4.7.1 Indian Oil Corporation Limited

India’s flagship national oil company and downstream petroleum

major Indian Oil Corporation Limited (IOCL) is the 18th largest
petroleum company in the world. It is currently India’s largest company
by sales with a turnover of Rs.2,85,337 crore and a profit of Rs.2,950
crore for the fiscal year 2008-2009. It is also the highest ranked Indian
company in the prestigious Fortune ‘Global 500’ listing having moved up
11 places to the 105th position in 2009. Indian Oil and its subsidiaries
account for approximately 48 percent petroleum products market share,
34 percent national refining capacity and 71 percent downstream sector
pipelines capacity in India. With India’s energy needs projected to grow
by 40 percent in the next five years, the future is indeed full of promise
for Indian Oil – a future the 31,700 strong Indian Oil team shall build as
they fuel the dreams of over a billion of their countrymen. Indian Oil’s
products include Indane gas, auto gas, natural gas, petrol,diesel, jet fuel,
lubricants and greases, marine fuels and lubricants, kerosene, industrial
fuels, bitumen, crude oil and linear alkyl benzene besides special products
like benzene, mineral turpentine oil, paraffin wax, raw petroleum coke,
sulphur and toluene.

4.7.2 Hindustan Petroleum Corporation Limited

Hindustan Petroleum Corporation Limited (HPCL) is a Fortune

500 company with an annual turnover of Rs. 1,08,599 crores during the
fiscal year 2009-10 and has about 20 percent market share in India with a
strong market infrastructure. HPCL operates 2 major refineries producing
a wide variety of petroleum fuels and specialities- one in Mumbai (West
Coast) of 6.5 Million Metric Tons Per Annum (MMTPA) capacity and
the other in Visakhapatnam (East Coast) with a capacity of 8.3 MMTPA.

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HPCL holds an equity stake of 16.95 percent in Mangalore Refinery and
Petrochemicals Limited, a state-of-the-art refinery at Mangalore with a
capacity of 9 MMTPA. In addition, HPCL is constructing a refinery at
Bhatinda, in the state of Punjab, as a joint venture with Mittal Energy
Investments Private limited. HPCL also owns and operates the largest
lube refinery in the country producing lube base oils of international
standards. This lube refinery accounts for over 40 percent of India's total
lube base oil production.

4.7.3 Bharat Petroleum Corporation Limited

Bharat Petroleum Corporation Limited (BPCL) traces its history to

1928 when the Burmah Shell oil storage and distribution company of
India was incorporated in England to enter the petroleum products
business in India. The business of the company grew substantially given
the international backing of Shell and it achieved the leadership position
in India. In 1952, Shell and Burma Oil Company set up Burmah Shell
Refineries to start a refinery in Mumbai. The entire operations of Burmah
Shell in India were nationalised in 1976 and the refinery and marketing
companies were merged to form BPCL.

BPCL is India’s second largest oil company in terms of market

share. Today, the company produces a diverse range of products from
petrochemicals and solvents to aircraft fuel and speciality lubricants. It
manufactures petroleum and petroleum products, asphalt, bituminous
substances, carbon, carbon black, hydrocarbons, mineral substances and
the products and by-products derived there from.

During 2004-05, the company had commissioned 892 retail outlets

representing 25 percent of the 3625 new retail outlets commissioned by

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the industry members. The company’s branded fuel SPEED and
HISPEED DIESEL are the market leaders in their segments.

4.7.4 Castrol India Limited

The history of Castrol in India dates back to 1910 when certain

automotive lubricants from C C Wakefield & Company made an entry in
the Indian market. In 1919, C C Wakefield & Company set up its first
overseas branch office in India and commenced operations as a trading
unit. Today, Castrol India Limited is the second largest player in the
Indian lubricant industry and is the market leader in the retail automotive
lubricant segment. Castrol India is a part of the BP Group worldwide.

Castrol India Limited is a Public Limited Company with 70.92

percent of the equity held by Castrol Limited UK (part of BP Group). In
2003, the company's turnover was Rs.1360.51 crores and profit after tax
was Rs. 137.38 crores. From a minor oil company, with a share of about 6
percent in 1991, Castrol India has grown to become the second largest
lubricant company in India with a market share of around 22 percent.

Castrol India manufactures and markets a range of automotive and

industrial lubricants. It markets its automotive lubricants under two
brands - Castrol and BP. The company has leadership positions in most of
the segments in which it operates including passenger car engine oils,
premium 2-stroke and 4-stroke oils and multigrade diesel engine oils.
Castrol India has the largest manufacturing and marketing network
amongst the lubricant companies in India. The company has five
manufacturing plants across the country, including a state-of-the-art plant
in Silvassa. The company reaches its consumers through a distribution
network of 270 distributors, servicing over 70,000 retail outlets. It

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imports base oil and carries out the blending and packaging work in
India. At present, the company derives 75 percent of its income from the
retail sales of lubricants and services to vehicles and 25 percent from
industrial lubricants and services.

4.7.5 Valvoline Cummins Limited

Valvoline Cummins Limited, a joint venture between Ashland Inc.,

USA and Cummins Sales and Services (India) Ltd, a wholly owned
subsidiary of Cummins India Limited is one of India’s fastest growing
lubricant marketer and producer of quality branded automotive and
industrial products. Products include automotive lubricants, transmission
fluids, gear oils, hydraulic oils, automotive filters, speciality products,
greases and cooling system products. Valvoline also offers Car Brite car
care products for automotive cleaning and maintenance. After starting
their operations in India in 1998, they have a come a long way and are a
growing, dynamic company having a base of 54 stock points delivering
products and services to 500 distributors for bazaar trade and 2945
institutional customers. In the bazaar trade, their products are available
in more than 15,000 retail counters across India.

Valvoline Cummins Limited derives 60 percent of its revenues

from the auto market and the rest from the industrial sector. Recently,
Volvo and Ashok Leyland have accorded original equipment
manufacturer’s approval to its brands.

4.7.6 Tide Water Oil Company (India) Limited

Tide Water Oil Company (India) Limited, is a part of the multi

divisional Andrew Yule group that has diverse interests in Engineering,
Electrical, Tea Cultivation, Power Generation, Digital Communication

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Systems and Lubricants. Tide Water has been a pioneer of automotive
and industrial lubricants in India since 1928 and has five plants at
Howrah, Oragadam, Turbhe, Silvassa and Faridabad.

Its range of automotive products includes engine oils for trucks,

tractors, commercial vehicles, passenger cars, two and three wheelers. It
also produces gear oils, transmission oils, coolants and greases for
automobiles. For industrial applications, it manufactures industrial oils,
greases and speciality products like metal working fluids, quenching oils
and heat transfer oils. Tide Water has tie-ups for the supply of genuine
oils with a number of renowned original equipment manufacturers in the
automotive and industrial equipment segment.

Quality has been the key area of focus and the company has
continued to innovate with high performance products keeping pace with
the advancements in technology and market needs. It reaches out to its
customers through its pan India distribution network with the popular
Veedol range of products widely accepted for their quality and
excellence. The company has entered into a technical collaboration with
JX Nippon Oil & Energy Corporation (the No.1 petroleum conglomerate
in Japan) for the manufacture of superior quality lubricants under the
brand name Eneos.

4.7.7 ITW Chemin

ITW's recipe for success during its nearly 100 years of existence
has been to focus on creating value-added products for key customers
around the world. ITW Chemin, a business unit of ITW Inc., USA, offers
a wide array of products and brands that include Met-L-Gard (Rust
Preventive Chemicals), Met-L- Cool (Metal Working Fluids), Met-L-

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Hold (Precision Workholding), Devcon (Metal-filled Epoxies and
Urethanes), LPS (Lubricants, Cleaners, Degreasers), EZ (High-
performance Industrial Greases), Plexus (Structural Adhesives), Accu-
Lube (Micro lubrication Systems), Dykem (Marking Systems, Staining
Colours and Steel Blue Layout Liquids), Rustlick 631 (Instant Rust
Fighter in Aerosol Can) , EC clean (Contact Cleaner) and Wynn’s
(Automotive After Market).

Their wide range of high-performance branded products deliver

matchless value to a number of industries like automotive, auto -
component, aviation, aerospace, cement, chemical, defence, fertiliser,
heavy engineering, pharmaceuticals, power and metals. Their vision is to
‘Grow and excel continuously to serve customers with value adding
world class 'green' solutions’. ITW Chemin operates from its
manufacturing facility at Pashammylaram, Andhra Pradesh (35
kilometers from Hyderabad). The facility is certified by DNV for ISO
9001, ISO 14001 and ISO 18001 systems. With over 100 distributors,
ITW Chemin not only offers cutting-edge technology and innovation but
well-networked services too.

4.7.8 Pentagon Lubricants

Pentagon Lubricants - a customer caring and relation building

organisation manufactures the entire range of industrial lubricants,
automotive lubricants, greases, marine engine oils and speciality lubricant
products under the trade name – PENTAGON.

The manufacturing unit that is equipped with a modern blending

plant having a production capacity of 50 kilolitres per day commenced its
production with state of the art technology during the year 1998 at

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Iyyappanthangal, Chennai. All raw materials, intermediate and finished
lubricants are subjected to rigorous quality check at their inbound and
well equipped laboratories manned by experienced research and
development personnel. They are also involved in the pursuit of
continuous upgradation of lubricants and specialities and in developing
new products required for modern automobiles, commercial vehicles,
utilities, power plants, earth moving equipments and industrial machinery
as per the specific requirement of customers. Their products confirm to
International & Indian Standards like API, SAE, BIS, ASTM, ASLE,
AGMA and NLGI.

4.7.9 JK Petroleum Private Limited

JK Petroleum, a brand name that delivers quality, reliability and

performance manufactures the entire range of industrial lubricants,
automotive lubricants, greases, marine engine oils and speciality lubricant
products. The manufacturing unit equipped with a production capacity of
100 kilolitres per day commenced its production during the year 1980 at
Coimbatore, Tamil Nadu.

JK performance lubricants offer a unique combination of properties

that provide exceptional solutions to most difficult problems. Each
product from their range features an advanced blend of premium quality
base stock and additives which can increase the service life of critical
components, reduce costly maintenance and improve productivity by
reducing component failure. Their comprehensive range comprises of
more than 50 grades, which includes hydraulic oils, gear oils, compressor
oils, cylinder oils, refrigeration oils, metal working fluids, automotive
engine oils, gear oils, thermic fluids, industrial and automotive greases
and other speciality industrial oils for specific applications. They are also

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involved in the pursuit of continuous up-gradation of their lubricants and
specialities.

Table 4.3 describes the lubricant blending capacities of oil

companies in India.

Table 4.3
Lubricant Blending Capacities of Oil Companies in India
Blending capacity in
S.No. Company
metric tons per annum
1 Indian Oil Corporation Limited 5,83,000
Hindustan Petroleum Corporation
2 2,80,000
Limited
Bharat Petroleum Corporation
3 1,10,000
Limited
4 IBP 50,000
5 Castrol India Limited 3,60,000
Tidewater Oil Company (India)
6 1,25,000
Limited
7 Others 50,000
Source: www.mospi.nic.in
It can be inferred from Table 4.3 that Indian Oil Corporation
Limited has the highest lubricant blending capacity of 5,83,000 metric
tons per annum followed by Castrol India Limited with 3,60,000,
Hindustan Petroleum Corporation Limited with 2,80,000 , Tide Water Oil
Company (India) Limited with 1,25,000 , Bharat Petroleum Corporation
Limited with 1,10,000, IBP and others each with 50,000 metric tons per
annum.

4.8 Summary

The future of mineral-based lubricating oil is limited, because the

natural supplies of petroleum are both finite and non-renewable. Experts
estimate that out of the total recoverable light to medium petroleum

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reserves of 1.6 trillion barrels, a third has been used already. Thus,
synthetic-based oils will probably be increasingly important as natural
reserves dwindle. This is true not only for lubricating oil but also for
other products that result from petroleum refining. With the slower
growth rate in the automotive segment, declining margins on account of
rising base oil prices and increasing competition on account of the
presence of a large number of players in this segment, players are
expected to focus on industrial lubricants as a key area for future growth
in the lubricant industry. But although private players are increasing their
presence in the industrial segment, penetration in this segment is expected
to be slow on account of the well entrenched position of the existing
public sector undertakings and the long gestation periods associated with
establishing clientele in this segment. Thus, with competition in the
industry intensifying, a period of price competition followed by
consolidation is expected over the medium term with smaller players
either exiting the industry or merging with larger players. Lubricant
market in the last five years has seen the severest turmoil and this phase
will continue for a year or two and then it is likely to stabilise. It is
difficult to predict what path it will undertake but it is sure and certain
that oil companies owning refineries that is a proven source of premium
quality base stocks (an essential component for manufacture of quality
lubricants), sound research and development set-up with innovative
business plans, wide distribution network with some system of control
and accountability and wide infrastructure of professionalised technical
services will continue to survive.

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