Looks at supplying to the neighbouring countries including Nepal, Bangladesh, Bhutan
Public sector giant Hindustan Petroleum Corporation Ltd (HPCL), which has set aside a capex of about Rs 75,000 crore for next five years, is setting its eyes on high-margin lubricants segment.
During the first quarter of this fiscal, the company had reported a 23% year-on-year growth in its lubes business, which forms around a quarter of the company's profit.
HPCL chairman and managing director M K Surana, during a recent media briefing post the annual general meeting last week, said that in the highly-competitive lubricant business, his company continued its dominance with a total sales of 603 thousand metric tonne. The footprint in the lubricant business has been expanded beyond the national boundaries with the commencement of marketing in Myanmar, he added.
During the year, the company also incorporated a wholly-owned subsidiary in Dubai by the name 'HPCL Middle East FZCO' for marketing of lubricants and other petroleum products across the various geographies of the Middle East and Africa.
S Jeyakrishnan, director - marketing, HPCL, said that considering its high growth potential, the state-owned refiner has even bifurcated lubes into a different category.
According to the company officials, the country's third-largest fuel retailer has also big plans for supplying lubricants to the neighbouring countries including Nepal, Bangladesh, Bhutan, among others.
The public sector oil marketing companies including HPCL control around 40% of the lubricant market in India. While private players such as Castrol, Shell, Veedol and Gulf Oil get to share the rest of the pie.
According to several reports, the lubricant market is expected to grow at 4.6% compounded annual growth rate over the next five years in view of the booming automobile sector and projected industrial growth. The industry is set to reach $9.6 billion during the same period.
Of Rs 75,000 crore capex for five years, Oil and Natural Gas Corp-run HPCL has set aside Rs 8,425 crore for the current financial year.
Most of the Rs 75,000 crore capex will be spent on capacity expansion, both in greenfield and brownfield projects, Surana added.
"We have lined up capex plans of Rs 75,000 crore for the next five years. On an average, we have been investing around Rs 6,000 crore per annum in capital expenditure. But during the current fiscal, we are investing Rs 8,425 crore as we are coasting along to complete the expansion of our capacities at Vizag and Mumbai refineries at a faster clip," the CMD said. Most of the announced capex will go into the over Rs 43,000 crore new refinery coming up in Rajasthan and the over Rs 22,000 crore expansion of Vizag facility, he said.
On the current year's capital spending, finance director J Ramaswamy said that around Rs 3,000 crore will go into these brownfield expansions and over Rs 1,000 crore into procuring LPG cylinders and an equal amount into marketing and other business development activities.
A BIG OPPORTUNITY
- 603 thousand metric tonne – Lubricants sold by HPCL
- 40% - Of lubricant market in India controlled by public sector OMCs
- 23% - HPCL's lubes business grew on-year
(With inputs from PTI)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "HPCL")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}