IOC Takes Key Step in Sri Lanka


Indian Oil recently signed an agreement with the government of Sri Lanka that will enable the companys Lanka IOC subsidiary to produce, blend, market and export Servo branded lubricants in Sri Lanka.

As far as the amount of lubricants Lanka IOC can manufacture within Sri Lanka, there is no volume restriction, Dhandapani Sothiselvam, Lanka IOCs senior vice president for lubes, told Lube Report. Sothiselvam said the agreement, signed May 23 in Sri Lanka, was part of Lanka IOCs preparations for opening its new lubricant manufacturing plant inside the China Bay tank farm area in Trincomalee in August.

Jan. 6 marked the laying of the foundation stone for Lanka IOCs 500 million Sri Lankan rupee (U.S $4.5 million) plant that is expected to manufacture 18,000 metric tons of lubricants per year. The blending plant will import base oil via tankers, and will import additives and other required raw materials through the Trincomalee port.

The plant will have the capability to manufacture all types of automotive and industrial lubricants, and is expected to go on stream by August 2007, Lanka IOC said in a recent statement. In Sri Lanka, Servo already enjoys a market share of 13 percent, and with the commissioning of the lube blending plant, the volume of business is expected to grow further.

The plant will feature a laboratory for testing base oils, additives and finished products. It will also function as a customer service laboratory for analyzing used lube oil samples and for condition monitoring.

Lanka IOC bills itself as the only private oil company that operates retail petrol/diesel stations in Sri Lanka. It was incorporated to carry out retail marketing of petroleum products, bulk supply to industrial consumers, and building and operating storage facilities at the Trincomalee tank farm, among other services.

The Sri Lanka government had earlier stipulated that to manufacture and market lubricants in the country, a company should have a minimum of five years lube marketing experience in Sri Lanka, have API approvals for products, and have approvals of vehicle manufacturers from the list provided by them in addition to fulfilling general requirements.

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