Malaysian oil major Petronas plans to invest $150 million, or aboutRs.975 crore, to expand its presence in the country’s lubricant market.
Petronas Lubricants International (PLI), manufacturing and marketing arm of the Malaysian national oil corporation, will spend the money to set up a plant with 110 million litres capacity in Patalganga, on the outskirts of Mumbai, and a technology centre for motorcycle engine oil, and invest in branding activity in the country, company officials said.
Currently, the 10th largest lubricant brand in the world, India can be a key engine for growth in future for Petronas, said Giuseppe D'Arrigo, group CEO at Petronas Lubricant International. “India can be the engine of global lubricant market growth in future,” he told ET in an interview.
Petronas is open to inorganic opportunities arising in the future, as it aims to become a top five player in the world in five years. “We have been amongst the fastest growing brand globally. Even in India, we hope to do better than competition,” said D'Arrigo.
He said immediate focus is on operationalising the new factory, which is expected to go on stream in the first quarter of 2018 and getting the brand’s ‘route to market’ right. The company may adopt an FMCG-style marketing strategy as it did in China.
D’Arrigo said the new plant in India should attain full capacity in three to four years.
He said the company would focus on value selling. “India is market for the price, but more and more sophistication is taking place, people will look for value in the future and that is where Petronas will play. Better products and better value to customers,” he said.
Petronas Lubricant currently sell about 30 million litres a year in the country, accounting for just 3% of its global volumes of about 1 billion litres. D’Arrigo said the firm is eyeing volumes of 1.5-1.7 billion litres globally by 2020-2021 and that by then share from India would cross 5%.