ExxonMobil Mulls Lube Plant in India

Share

The worlds second-largest lubricant supplier is considering building a blending plant in the worlds third-largest market, according to an executive in the industry.

ExxonMobil is also considering other options as it works on a strategy to expand market share in India, the source, who spoke on condition of anonymity, told Lube Report. The other options include increased marketing, expanding existing toll blending capability and new marketing tie-ups.

Earlier this month, India-based business news publication Livemint reported that Irving, Texas, U.S.A.-based ExxonMobil was planning to build a lube blending plant with capacity to produce more than 70,000 metric tons per year in Khopoli, an industrial city in the Raigad district of Maharashtra state, about 45 miles east of Mumbai.

ExxonMobil continuously evaluates its global portfolio of businesses and opportunities for growth, restructuring, acquisition or divestment, depending upon fit with its overall strategic business objectives, a spokesperson at the Irving, Texas-based ExxonMobil told Lube Report in response to questions about the companys plans in India. As a matter of practice, we do not comment on market rumors and speculation.”

ExxonMobils share of the global lubricants market was estimated to be in the 9 to 10 percent range in 2018, according to consultancy Kline & Co., second only to Royal Dutch Shell, which was estimated to have around an 11 percent share. India consumes an estimated 2.5 million tons of lubricants per year, trailing only China and the U.S. ExxonMobil did not mention its current market share in India, but it is not among the top six, according to industry analysts.

The ExxonMobil spokesperson said lubricants that the company sells in India are currently produced by another company under a toll blending operation and at an ExxonMobil plant in Singapore.

Talking about the markets growth prospects, the spokesperson said that Indias lubricant market is expected to register a compound annual growth rate of 4.6 percent by 2024, making and that it is ripe with opportunities, especially in sectors such as automotive, manufacturing, construction and mining.

Additionally, government initiatives assisting the growth of micro, small and medium-sized enterprises across the country will also increase the demand for lubricants, the spokesperson said. This makes India a high-growth region for ExxonMobil, he added.

Indias estimated 2.5 million metric tons finished lubricants market is dominated by three national oil companies – Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Indian Oil Corp. Ltd. – as well as several private players, including BPs Castrol India Ltd., Gulf Oil Lubricants India Ltd. and Tide Water Oil Co. (India) Ltd.

The ExxonMobil spokesperson noted the market is already moving towards synthetic technology. With the advent of Bharat Stage VI automobile emissions standards in India, this process will be more rapid, he said. Next April the country is scheduled to jump from the existing BS IV automobile emissions standards to BS VI in an attempt to accelerate its fight against local air pollution and global warming. BS VI is equivalent to the European Unions Euro 6 standard, and automakers need to make changes in engine design to meet the regulatory norms. These vehicles will also require more advanced engine oils.

We see more specialized lubricants evolving to cater to specific consumer demands post-BS VI, the spokesperson said, adding that this means consumers will have the choice to select lubricants depending on their needs rather than availability. This trend is likely to evolve further, leading to increased demand for higher-quality lubricants.

Related Topics

Asia    Finished Lubricants    India    Plants & Equipment    Plants & Facilities    Region