GP Petroleums to Shut Daman Plant


GP Petroleums Ltd. will close its lubricant plant in western Indias Daman region due to discontinuation of tax benefits under the countrys new Goods and Services Tax system.

The central sales tax exemption available for production and sales from Daman has been discontinued [upon the July 1] implementation of GST, GP said in a regulatory filing Friday. Further, the lease period of the Daman plant will expire [in December]. The company, therefore, has decided to discontinue production and sales from the Daman plant and shift the same to the Vasai plant, where sufficient unutilized capacity is available.

The Mumbai-based lubes producers total lubricant production capacity is around 70,800 metric tons per year, but the annual output is only around 44,000 tons from its blending plants in both Daman and Vasai, which is just north of Mumbai. There will be no effect on overall production and sales volumes of the company. The manpower deployed in Daman will be absorbed in Vasai, GP said.

The company sells industrial and automotive lubricants, process oils, transformer oils, greases and specialty oils in India and internationally. Its customers include TAFE, Force Motors, Mahindra & Mahindra, Crompton Greaves, Royal Enfield and Tata Steel, among others.

GPs parent company, the United Arab Emirates-based GP Global Group, said it also plans to construct a greenfield lubricant plant with estimated capacity of around 88,500 t/y on an 11-acre plot of company-owned freehold land in the Valsad district of Gujarat state, north of Mumbai.

The new plant will replace the combined production capacity of the companys Vasai and Daman plants, the maker of Ipol-branded lubricants said. The company will spend around Rs 75 crore (Rs 750 million, or U.S. $11 million) in phases over the next two years to set up the new plant, it added.

GP, which is licensed to manufacture and market Spanish producer Repsols finished products in India, said the new plant will cater to its growth aspirations and make products that meet original equipment manufacturers requirements.

CEO Hari Prakash Moothedath told Lube Report Asia earlier this year that the company was looking to acquire a blending plant in southern India so that products could be delivered faster to regional customers compared to supplying from Mumbai. It didnt provide any update on the acquisition plan in the regulatory filing.

Photo: GP Petroleums

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