In the global market, Shell Lubricants has a market share of 13 per cent for finished lubricants in terms of volume. With a strong commitment to research and development, which reflects from the association with motorsport companies, Shell Lubricants makes and sells more than 3,000 different lubes to meet customer needs across a wide range of applications. With a presence dating back to 80 years when it operated as Burmah Shell, Shell lubricants in India, has marketing alliances with automakers. Nitin Prasad spoke about his company and its plans in an interview to Eliza Waghmare.
When did Shell enter the Indian market?
Shell’s presence in India goes back about 80 years, when it operated as a pioneering oil distribution company, Burmah Shell. In the year 1928, the Burmah-Shell Oil Storage and Distributing Company of India began operations with import and marketing of Kerosene. In the 1930s, the company entered the production of petrol to power motor cars in India. In 1932, with the arrival of civil aviation in India, the company entered into aviation fuel. It also powered JRD Tata’s historic solo flight from Karachi to Bombay. LPG as a cooking fuel was introduced in the 1950s. Besides offering bitumen for road construction, the company in 1955 commissioned what was then the largest refinery in India. It would process newly found indigenous crude. In 1976, Burmah Shell was taken over by the Government of India. In 1993, Shell re-entered India in a joint venture with Bharat Petroleum. The company was called Bharat Shell. The partnership ended with the Indian venture turning into a 100 per cent subsidiary of Royal Dutch Shell in 2007 by buying Bharat Petroleum’s minority stake. Shell Lubricants in India also merged the Pennzoil brand with its brand portfolio as part of the global acquisition of Pennzoil-Quaker State Co.
The Indian lubricants market is the fifth largest market in the world in terms of consumption volume after the US, China, Russia and Japan. How do you look at the lubricants market in India?
The market for lubricants is strong in India with rising opportunities. The industry is linked to various sectors such as coal, power, mining, construction, automotive industry, etc. Percentage-wise, in India, around 55 per cent of the lubricants is being consumed by the automobile sector, and the rest is being used by industrial and marine industry. At present, India has a reasonable reasonable gross domestic product (GDP) of 4.8 per cent. If the economy improves further with the required investments, then the entire lubricants industry is expected to witness a much positive growth in the coming years.
Shell Lubricants has invested in a facility in India?
Yes. In India, we have a lube oil blending plant at Taloja near Mumbai. It is rated as one of the best in Asia. This is a fully robotised, environmentally safe and spill-proof plant that has various quality and environment management systems certifications like ISO/TS 16949:2002. Shell lubricants have extensive distribution network across the country. We supply our products through a network of 250 distributors across the country. To be closer to the customer, we set up a Customer Service Centre (CSC) at Chennai in 2008. It has enabled us to introduce new standardised and simplified way of working. In India, we are working with manufacturers like Tractors and Farm Equipments (TAFE). Research shows that use of a suitable lubricant along with long-term co-engineering with the original equipment manufacturer (OEM) can result in higher energy savings. In passenger vehicles, fuel economy is no longer a product differentiator nor can it bring competitive advantage. Energy savings and performance enhancement can. Shell is also working on biomass energy solutions. With a belief that bio-fuels are increasingly seen as an alternative to petrol and diesel, Shell is developing bio-fuels from non-food sources and using new conversion process.
What are your efforts towards energy efficiency?
Energy efficiency is broken up into three different areas: technology innovations, wherein we need to lower emission products; technology partnership, which will help us to work closely with engine designers and OEMs; and lastly is the application. We have partnerships with Tata Motors, Daimler, Maruti, etc., for fuel efficiency and emissions. We work closely with our customers to understand their requirements, usage patterns, etc., and further guide them on the energy-efficient benefits.
Any plans for technology partnership?
We do new tie ups or partnerships every year. Currently, we are in discussions with various clients for new tie-ups across the globe into various segments like power, construction, automobiles, etc. We tie-up with OEMs. Through tie-ups with OEMs we continuously work with the R&D teams and plan for the next generation customer’s requirements. Last year we introduced a whole sequence of products for OEMs in India. This year, we will be rolling a new sequence of products for custom design and partnership with OEMs, wherein the announcements are expected to come up shortly.
You have invested in a technical centre at Bangalore?
The technical center at Bangalore is one of the three technical centres of Shell the world over. The technical center at Bangalore focuses not just on the lubricants segment, but also focuses on upstream exploration and production activities as well as downstream chemical, gas and refinery operations. We have people working on deeper water technology, water conservation, CO2, LNG projects, etc. The center seeks to deliver advanced technical studies, projects and services for Shell around the world as well as support Shell’s interests in India. In future, we have plans to expand this facility and add more capabilities. We will be building a new facility, which will be closer to the Bangalore airport. Work has already begun on this facility. In the next two-to-three years, the new facility is expected to go on stream.
How much is your spending on research and development (R&D)?
Globally, we spend around $1.3 million annually for R&D. We have world-class R&D centres situated in North America, Japan, Germany and the United Kingdom. We have more than 200 Shell scientists and engineers dedicated to R&D and over 350 lubrication specialists working in the field. Shell Lubricants’ association with motorsport companies through technical partnerships with Ferrari, Ducati and the Shell-Pennzoil team in NASCAR, has the most extreme test bed to develop the best premium products for every Shell customer. We are looking for ways to develop more advanced fuel solutions that can offer you benefits such as fuel economy and longer equipment life.
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