Sri Lanka Expands Lube Market

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The government of Sri Lanka on Thursday announced it had licensed six more firms to market lubricants locally, as part of its continued efforts to open its lubricants market to companies seeking to blend locally or import products for sale.

According to Sri Lankan news agency Lanka Business Online, the Sri Lanka government has given permission to Bharat Petroleum of India, Gulf Oil International of the United Kingdom, French companies Motul and Total S.A., and Sinopec of China to trade and distribute lubricants. In addition, Indian Oil subsidiary Lanka IOC is constructing a lube blending plant scheduled to go on stream by July.

Motul Executive Vice President Yves Junne told Lube Report, We have no special big plan there, but a distributor was appointed. We expect to start sales of some imported grades as soon as possible, imported from France and from India.

Geeta Agashe, director of Kline and Co.s Petroleum and Energy Practice, saidher companys study, Business Opportunities in the Emerging Lubricant Markets of South Asia, The Middle East, and Northern Africa, 2005-2015, estimated the Sri Lankan lubricants market in 2005 at 33.5 kilotonnes.

We show Caltex Lanka Lubricants accounting for a dominant 70 percent market share while Lanka Indian Oil Corp., which entered the island country in 2003, accounts for a 23 percent market share, Agashe said. Theremaining 8 percent is splitamong ExxonMobil, Valvoline, Shell, and BP, she added. Industrial lubes account for 40 percent of the total, commercial automotive for 45 percent and consumer automotive for the remaining 15 percent, she said, adding their estimates project growth of about 5 percent a year for the lubes market in Sri Lanka.

Sri Lankas government gave provisional approval to three local companies deemed complete in many aspects but not fully compliant, including Laughs Holdings Ltd., Toyota Tsusho Corp. and Waxpol Industries Ltd.

A committee appointed by the ministry of petroleum and petroleum resource development – and represented by the government-owned Ceylon Petroleum Corp., the Public Utilities Cooperation, the public utilities commission and Sri Lankas Public Enterprises Reforms Commission – coordinated the liberalization process.

The Public Enterprises Reforms Commission, on behalf of the countrys government, invited tenders from interested parties who could offer an established, high quality lubricant brand. The objective is to create a healthy competition for quality lubricants by ensuring that only reputed lubricant brands enter the market, given the unique characteristics of the lubricants market and the necessity to maintain a practical and enforceable regulatory regime, the government said in a statement.

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