Committed towards environmentally sustainable lubricants solutions

July 3, 2021 3:31 pm

As GS Caltex enters its second decade of presence in the Indian market, we caught up with Jayanta Ray, General Manager – Industrial and OEM, GS Caltex India Pvt. Ltd., to know how his organisation is strategically poised to take on the megatrends in the lubricants industry having successfully dealt with the micro and macro challenges thrown in by the pandemic.

How are the present global trends impacting the oil and lubricant industry?

The global lubricants market size is projected to reach USD 182.6 billion by 2025 from USD 157.6 billion in 2020, at a CAGR of 3.0 percentage according to a report. Rapid industrialisation and the growth of the automotive market are key factors affecting the demand of lubricants which had a fair run of positive trend till Covid hit us last year. Factors such as emission regulations, higher quality and OEM requirements are expected to have a major impact on the demand for lubricants.

As the Industry shifts to a more sustainable way of operating, we can anticipate huge changes ahead and quite rapidly. New energy systems, new powertrains, new fuels, and new materials will all demand new solutions from the Lubricant players. This indicates emergence of High-Performance Lubricants in synthetic category gaining traction more than ever before. Also, with rise in EVs, the lubricants market growth is expected to slow down in more developed countries where adoption rates are faster and higher. Hence one market research predicts a CAGR growth range of -0.5 percentage to 1.5 percentage depending on US, Europe and Asia for Lubricants Industry in next 10 years.

Looking at the price volatility of global oil prices, what kind of strategy you have adopted to support your customers.

Last 6 months were extremely uncertain for Lubricant Industry, where it witnessed unprecedented rise in input costs of more than 40 to 50 percentage mainly due to sudden implications from both Supply Side issues as well as Demand Side factors.

On the supply side, ‘refinery shutdowns’ escalated short supply of Base Oils, Bright Stock and Other Hydrocarbon products in Asian market. Huge rise in spot market rates for Base Oils followed along with Bright stock to remain short in first two quarters of 2021. Also shipping Industry outage in recent months pushed prices up almost 3 times in sea freight along with higher lead time. India is short in both crude and base oils and depends mostly on import which aggravated the situation further.

On the demand side crude oil moved above 70$/ bbl. and likely to rise further in next few months as per prediction of many CEOs of Fortune 500 companies. Asia, along with India is witnessing strong recovery pushing demand for Base Oils and other petrochemical products including additives. Fuel prices at all-time High in last 8 years impacted transportation costs. Steel, Plastic and other packaging material also witnessed significant price increase in recent times.

However, GS Caltex (A JV between Chevron USA and GS Energy South Korea) is an integrated Fortune 500 oil company with 4th largest refinery in Yeosu Korea and have secured high quality KIXX LUBO Base Oils for our Indian customers in abundance. Hence GS Caltex customers are fully secured of its supply, and we stand by for support to our customers at this crucial time. In past few months, not only have our partner customers and Distributors benefited from our reliable service but also supported in our accelerated growth journey in Indian market.

With the increasing environmental concerns, what kind of environment friendly lubricants do you offer?

GS Caltex is committed to fulfilling our social responsibilities and becoming a respected company through enhanced sustainability. GS Caltex is committed to eco-friendly practices that is more rigorous than environmental regulations throughout our entire value chain, from material procurement to production, sales and recycling. Due to focus and investments towards environmentally sustainable lubricant solutions, market is moving towards fully synthetic products (Group III and PAO based Base Oils). GS Caltex is all ready to address the challenges in market and be the preferred solution partner in Synthetic Lubricants. During last EXCON in 2019, we also won “Yellow DOT Awards “for our initiative on introduction of Long-Life Hydraulic Fluid for Construction Industry which augurs well for such environment friendly initiatives.

What are your plans and projections to realign the market position post COVID?

During Lockdown, most Industrial units faced reduction in production which impacted use of lubricant products. Also, automotive lubricants have declined severely due to reduction in usage and increase in work from home activities. It is estimated that Lubricants Industry declined significantly in last FY by 16 percentage to 20 percentage in various categories.

This needed a focussed initiative to remain in close touch with our customers and support them during these challenging times. Safety remained our topmost priority for all stakeholders followed by manging cost initiatives. Apart from pandemic, the Lubricants Industry has been facing huge shortages and fluctuations, spiralling into an input cost increase. Our team was geared up to address the needs of OEMs very closely by ensuring and prioritising smooth supply chain and other marketing initiatives. Digital connect and introduction of value-added products and services helped us to retain our mind share with our Channel Partners, End users and Key Decision Makers. In fact, GS Caltex team did very well to grow significantly compared to pre covid period which gives us an impetus to invest more in such activities going forward.

For further query, please contact:

Jayanta Ray, General Manager – Industrial and OEM, GS Caltex India Pvt. Ltd.

(E Mail: jayantaray@gscaltexindia.com)