“The impact of this strategic move is evident in the financial performance of our lubricants division,” the company said in its annual report, released this month. “Prior to the commissioning of the grease plant, the profit was at a minimum. However, with our own production of grease, this profit has increased significantly per liter.”

Meanwhile, Chevron Lubricants Lanka Plc reported higher operating profit for the first quarter, despite lower sales.

Both appeared to weather the economic storm that Sri Lanka continues to cope with. According to local reports based on government statistical data, Sri Lanka’s gross domestic shrank 12% in the first quarter year-on-year, as the country continued to deal with an ongoing economic crisis. The industry service sector had declined 23% during the quarter.

Sri Lanka’s government in March, an agreement reached a deal with the International Monetary Fund for a nearly $3 billion bailout, pending debt restructuring with creditors.

Lanka IOC

Lanka IOC reported that its operating profit surged 717% to Rs 44.2 billion, and a 682% jump in net profit to

Rs 37.7 billion for its fiscal year.

Sales of lubricants rose 43% to Rs 10.4 billion for the fiscal year, improving from Rs 7.3 billion. Revenue from contracts with customers overall.

The company in its latest annual report noted that it commissioned the grease plant – with 3,000 metric tons per year production capacity – last September in Trincomalee, on Sri Lanka’s east coast. The plant had experienced minor delays due to COVID-19-related challenges, the company added.

“With the establishment of this plant, we no longer need to import grease from our parent company in India,” Lanka IOC said in the annual report. “Instead, we have achieved self-sufficiency in grease production at our Trincomalee facility. The plant is currently operating under a two-year contract, after which internal operations will be fully transferred to Lanka IOC.”

Chevron Lubricants Lanka

Colombo-based Chevron Lubricants Lanka reported operating profit of Rs 1.5 billion Sri Lankan rupees (U.S. $4.9 billion) for the first quarter, falling 47% from Rs 2.7 billion.

In interim financial statements released to the Colombo Stock Exchange, Chevron Lubricants Lanka reported a 24% increase in net profit to Rs 1.2 billion. Factors impacting net profit included a 99% decrease in finance costs and a 272% jump in finance income.

Sales revenue declined 19% in the quarter to Rs 6.3 billion.

The company — which imports, blends, distributes and markets lubricants and greases –

operates a blending plant in Sapugaskanda.