Gulf Oil Lubricants India Ltd. announced recently that it will expand both of its finished lubricant blending plants in order to accommodate the company’s steady growth.
The board of directors of the Mumbai-based company voted at its Aug. 13 shareholders meeting to approve a final investment decision to expand its blending plants in Silvassa and Chennai, India, by a combined 70%. The Silvassa plant currently has production capacity of 80,000 metric tons per year and will be enlarged to 125,000 t/y, while Chennai is currently 45,000 t/y and will be doubled in size.
The company aims to complete the expansions in two years and expects them to cost ₹55 crore (₹550 million or U.S. $6.3 million).
Company reports suggest it is approaching a point where it would max out its production capacity. The company reported sales volumes of 135,000 tons for the fiscal year ended March 31. It did not say whether any of that amount was farmed out to contract blenders. Officials said that represented volume growth of a high single digit percentage from the previous year and that volume growth for the April-to-June period was in double digits.
Officials have credited those increases to the health state of lubricant demand in India, which is growing faster than most large markets, along with the success of initiatives in segments such as motorcycle oils and agricultural lubes. The company said it aims to grow two to three times faster than the domestic market in coming years.
Sales revenue for the quarter ended June 30 rose 13% to ₹996 crore, while earnings before interest, taxes, depreciation and amortization climbed 9% to ₹127 crore.