Akhil Jha, Vice President Technical, Shell Lubricants India, says the company´s technical edge is its biggest competitive advantage.
What is the size of India´s lube market and at what rate is it growing?
The total lubricant market in India is around 2.2 billion litres. It is a strong market with rising opportunities and ranks third after the United States and China. As per recent reports by Kline, the overall Lubricants industry in India is expected to grow at a CAGR of 2.5 per cent. Rising disposable incomes, soaring population of automobile users and increased industrial activity can be listed as the trends likely to drive the lubricants industry in India.
A big challenge, which the industry is currently facing, is the low awareness about available lubricants and the right lubricants for correct application. We expect increase in awareness and use of condition monitoring. We believe these technologies will enable lubricant manufacturing companies and independent consultants to stress on lubricant performance rather than price.
What is your lube making capacity? What is your market share and what is the long-term strategy?
We have a state-of-the-art lubricant oil blending plant in Taloja near Mumbai which has a capacity of 110 million litres per annum.
We currently have nearly 10-15 per cent share across segments where we are present. This constitutes the accessible market for us. Shell is the global market leader in finished lubricants with 13 per cent of the market in terms of volume. We are taking various initiatives to create technology-based solutions and we believe this will help us increase our market share in the near future.
PSU oil firms command a leadership position in lubes due to a vast network. How do you plan to compete?
Shell has been the number one lubricant brand for last seven years in a row (as per Kline & co.) and brings world-class technological insight to its lubricants business for customers through global experience and expertise.
Our technical edge is our biggest competitive advantage. Our engineers research and develop lubricants that add value to operations such as enhanced ODI, fuel savings and lowering total cost of operations.
We have a vast distributor network strategically located in all-important geographies and industry clusters to maximise reach and penetration. These distributors have well trained Engineers (DFLTS) who work in the field, understand applications, customer requirements and provide the appropriate solution. We use our knowledge and expertise to create a lubrication plan for our customers and tailor our technology-leading products and services for their business goals. We help to reduce down-time, improve energy efficiency, extend oil life, enhance safety standards and reduce maintenance costs.
We have a dedicated Value Improvement Project (VIP), where we conduct a site audit, identify value improvement opportunities, mutually agree on the project with the user, execute and sign off the value delivered. We have many cases across all sectors where we have demonstrated this programme effectively through our LTA (Tech Advisor) & LSE (Service Expert) & DFLTS Teams in India. We record and document the value as an outcome of VIP program in the form of DVR (Demonstrated Value Records).
We have more than 1,700 DVR´S which are testimonials to benefits accrued by end users using Shell Products and Services.
Moreover, we have local and global expertise which helps customer in improving their operations and provide value added solutions. Coupled with this we have dedicated technical services such as LubeAnalyst, LubeAdvisor, LubeCoach & LubeVideoCheck which helps to have a very strong technical intimacy with the customers.
Shell has a long-standing and successful relationship with leading global OEMs. By working closely with leading global OEMs, industry bodies and big customers, our lubricants specialists have developed a deep understanding of the industry challenges and application requirements in each sector. Shell also works with OEMs on co-engineering projects starting with
the development phase to field trials to launching the product in markets that help us bring innovative products. This gives Shell an edge over competition.
We have many OEM approvals in all sectors ranging from construction, mines, metals and cement.
How much have you invested and what are your plans for more investments?
While we do not share numbers, despite the present macro-economic conditions, we haven´t altered our investment plans in R&D, and will continue expansion in the country. There are no specific investments for ´Make in India´. However, Royal Dutch Shell continues to be one of the largest and most diversified international investor in India´s energy sector among all global integrated oil companies. In India, we focus on nine prominent sectors namely, automotive, auto components, agriculture, power, construction, metals, mining, manufacturing & fleets. Shell Technology Center Bangalore (STCB), one of the three major global development centers besides facilities in Amsterdam and Houston, is one of the focus areas for investment. The centre focusses on the needs of Asia-Pacific and the Middle-East.
Our Taloja plant is considered to be among the finest lube-oil blending plants in Asia. It manufactures branded lubricants for the auto¡motive and industrial sector. Shell is the only international company to be granted Government of India approval to retail fuel in India till date. We currently hold a license for 2,000 fuel retail stations and also operate a LNG plant at Hazira.
What are the plans to rope in any brand ambassador for Shell Lube?
At Shell Lubricants, we mostly prefer to stay away from appointing Cricket related brand ambassadors or Bollywood big wigs and instead just let our products and technological advancements do the talking. Hence, even globally, our brand ambassadors are mostly centered around our motor-sports associations such as Ferrari, Ducati & BMW. These associations or ambassadors are truly testimonial to the kind of extreme conditions our products are designed to deliver in. Upon relevant announcements in the Indian market, we could chose to rope in some of our global ambassadors and leverage the same equity.
Plans to appoint Shell dealers and distributors?
We will expand as per the market demands.
Our India supply network today consists of: