Hindustan Petroleum Corp. Ltd. plans to create a separate subsidiary for its lubricant business, which it claims is the largest in India, according to a recent report in the Economic Times.
The Mumbai-based news group reported that HPCL Chairman and Managing Director Pushp Kumar Joshi disclosed the plan during an interview last month, saying it was part of a restructuring initiative that will also create a subsidiary for its green energy operations.
A Sept. 6 article quoted Joshi saying the parent company will also consider a stock market listing and other potential steps to facilitate the lubricant business’ growth.
“We are the largest marketer of lubes in India, we have a lubes refinery, so we want to unlock value in this business,” he said.
India is the world’s third-largest lubricant market – behind China and the United States – and the biggest market shares are held by state-owned oil companies HPCL, Indian Oil Corp. Ltd. and Bharat Petroleum Corp. Ltd., thanks to supply contracts that they hold for big state-owned industries.
The company reported selling 632,000 metric tons of lubricating oils and greases during the fiscal year ended March 31 of this year. That level represented a drop of 16% from the previous year, which the company attributed to base oil supply constraints.
Officials believe the lubricant business has untapped potential in the company’s ownership of a base oil plant at its Mumbai refinery that supplies the lubes business. That plant has capacity to make 480,000 metric t/y of API Group I, II and III stocks.