South Korean lubes major GS Caltex to make India global R&D, manufacturing hub; to cater to domestic and overseas market

Mumbai: South Korean oil refining major GS Caltex expects India to lead its R&D activities near future apart from making it a regional manufacturing hub to cater to the domestic as well as the nearby overseas markets.

GS Caltex India, which is focusing on premium auto and industrial lubricants, will also look at acquisitions to fuel its growth in the 2.4-million tonne domestic lubes market, managing director Rajesh Nagar said.

The premium segment lubes account for almost 25 percent of the market but GS Caltex India is a fringe player even after a decade ago of its reentry. “India has emerged as a centre for innovation. We are looking at India leading our technology drive worldwide. We also aim to make it a product development and a global R&D hub,” Nagar told PTI in a recent interaction.

He said the proposed R&D centre is part of its larger plans for India, which also include a regional manufacturing and logistics hub. But he was quick to add that the company is looking at a phased growth and expansion and the proposed manufacturing facility, for which a decision has already been taken, will be set up keeping in mind not only India but also of other regions such as Africa, West Asia and parts of Europe as well. But he did not disclose a timeline for the plant or an investment along with the location.

Noting that the domestic lubes industry is growing at a low 2-3 percent, general manager for marketing K Madhu Mohan, said they have been growing at an annualised rate of over 30 percent in the past few years.

“As far our growth plans are concerned, we are on the right track, growing much higher than the industry. In fact, we closed with a 60 percent growth last year,” he said. Nagar said the premium segment is growing because the OEMs are advancing their technologies as “OEMs are concentrating on more efficient engines.”

He expects the BS-VI emission norms from next April to drive growth in the premium segment, furthering the already high growth this segment has been clocking since the past three years.

The automotive segment accounts for 45 percent of the domestic lubes market and the rest is industrial segment, Nagar said.