Wednesday, May 12, 2021

Interaction- Sreejit Banerjee, Chief Operation Officer, Balmer & Lawrie Co Ltd (SBU- Greases & Lubricants) me




“Balmerol” Brand is more than 150 years old, highly respected by it’s customers for quality products & services



Balmerol is the most trusted and experienced brand in the domain of industrial and automotive lubricants. Balmer Lawrie pioneered grease manufacturing in India in 1934 at Sewree (Mumbai) and in 1937 at Kolkata. With about eight decades of manufacturing experience Balmer Lawrie’s Balmerol greases are the leaders in their categories. Balmer Lawrie is the first choice of major customers like Indian Defence, Mining, Railways, major industries like Steel, Cement, Non Ferrous Metals, Coal, Sponge Iron, Jute, Sugar, Engineering and Automobile companies etc. In an exclusive to CONSTRUCTION OPPORTUNITIES, SREEJIT BANERJEE, CHIEF OPERATING OFFICER, BALMER & LAWRIE CO.LTD. (SBU-Greases & Lubricants) speaks about the lubes & oil market, impact of Covid -19, demand drivers and a lot more.





Provide us an overview on the Lubes & Engine oil market in terms of cost/quality equations, sector challenges and growth prospects. Detail us on the trends that are driving the lubricants and engine oil market in India?


There is a gradual shift towards usage of better quality of lubricants & greases in recent years which has impacted the purchase price in Rs/Ltr terms. But better quality also attributes to better drain interval & less maintenance cost, so overall lubrication & maintenance cost gets reduced when the system supports the use of better quality lubricants. For example synthetic engine oil can reduce maintenance cost for a new generation car but won’t help much in an old car. So to shift to better quality lubricants & to get cost advantages, the hardware need to be aligned to benefit from the superior quality.


 The global lubricant market size is projected to grow at a CAGR of around 3% till 2025 & the growth driver will be primarily the impact of growth in Industrialization in Asia Pacific, Middle East & Africa post COVID & gradual increase in no of vehicles which is likely to continue for next few years. India, China & few Asian countries like Indonesia, Vietnam etc will be a significant market in this region for increase in consumption of lubricants. In India the segments that will drive the growth are Automotive, Infrastructure & Power. India is currently the largest tractor, 2 & 3 wheeler market, 4th largest commercial vehicle, 6th largest passenger car market & these will continue to remain the main driver for growth in consumption of automotive lubricants of which engine oils will be on the forefront. The design of a IC engine has evolved significantly with main driver being necessity of cleaner air (lesser fuel consumption). The internal components of the engine are now exposed to much more tension /stress & heat due to engine improvement. This also has led to very high RPM engines which requires better quality of engine oils. Apart from this, the transmission system inside a vehicle has also improved with vehicles reaching 150 miles per hour. The gear system & bearing technology have also improved All these improvements & evolution necessitates better lubricants. This led the lubricant technology to evolve & improve.


Growth in Infrastructure & industrialization segment will also impact growth in Hydraulic oils & greases category. The power industry is a large consumer of industrial lubricants ranging from turbine oil to transformer oil. The renewable energy industry is a prospective sub segment of power generation industry. Currently wind power generation accounts for a very small share in the overall energy mix but the sector is growing at a rate of 12% & has reached a capacity of 596,556 Megawatts in 2018 as per world wind energy association. Wind turbines require lubricants for optimal operability. In India, though wind turbines are very limited at the moment, this segment is bound to grow in future.


There will also be a shift in switching over to synthetic Gear oils owing to their tremendous cost benefits in trouble free maintenance of gear systems. Long drain Hydraulic oils ( 5000 Hrs & more ) will get maximum thrusts in coming days So overall there will be a shift to better quality oils in coming years but this change will be gradual.



What has been the impact of Covid-19 on your business and what are your strategies to overcome these sluggish market conditions and expand market share?


COVID-19 has exposed many challenges for the lubricant industry by impacting both transportation & industrial sector. Major economies are effected due to pandemic across the globe & resulted in slowdown in activities across industries that uses lubricants. Lockdowns has impacted the transportation sector with very less movement commercial & passenger vehicles along with aviation industry. The market is expected to be slowly coming back on track from 2021 with resumption of activities in industrial & transportation segment.


“Balmerol” Brand owned by Balmer Lawrie is more than 150 years old & we are highly respected by our customers for quality products & services. We are one of the largest Grease seller in India under Balmerol Brand & in top 10 Grease seller in Asia. We have been primarily in B2B segment for many years servicing core sector industries like Railways, Defense, Steel Plants and Automobiles (Trucks). We have been growing more than average Industry Standard in last few years both in value & profitability term. The next few years will be quite exciting for us with aggressive double digit growth plan to become one of the significant player in the Indian lubricant bussiness. We have realized that Balmerol Brand has tremendous potential to grow & to unlock this potential, we have made a foray into Retail Market with our entire range of Automotive & Industrial Lubricants. Building up a robust distribution network in select markets will be our thrust area for next few years backed by strong BTL activities to increase our Brand visibility. We will continue with bringing innovative &high performance products for our customers like Synthplex Grease which is a semi synthetic grease with life of over 2. 0 lac KM & entire range of Synthetic Ester based Biodegradable products


Economic Times has awarded us Best Brand -2019 in a function in Mumbai based on a study by Nielsen Research which has identified few leading Brands in India



What are your offerings and their USP’s to cater the construction and mining industry. How Green and recyclable are your products. Detail us on some innovative product/technology developed by your company.


We expect more demand in next few years to come from Construction Segment as Government has already made announcement to push for Infrastructure development in the wake for economic development of the country. Mining activity will continue but has the challenge of overcoming environmental restrictions imposed upon them which will continue & government has been able to curb lot of illegal mining done in this country


Construction & Mining Industry requires mainly the lubricants used in automotive application ( engine oil, transmission oils, coolants, greases ) with fewer industrial products of which hydraulic oil will have major volume. However since these applications are for off-road & the environment is little more dusty & stringent, use of better quality base oils & right dosage of additives with better viscosity modifiers can give significant advantages over lubricants typically used in on road application. However the specification & standard remains same for most application. We are very careful is selecting the right kind of base oils & additive packages to suit these applications in Mining & Construction Industry.


We also have the advantage of having our own Application Research Laboratory (full fledged R&D centre with NABL accreditation) in Kolkata where we have developed high performance specific products like Semi synthetic Grease with life over 2.0 lakh km, Fire Resistance Greases, Synthetic Mould Oils, Biodegradable Products with Synthetic Ester based etc. We are the only lubricant company where we produce synthetic Esters in our in house Ester plant.


We spend around 1.5% of our turnover & 20% of our Profit in our R&D activity. We will make continuous investments in our R&D centre, In developing new products & in our people




Any new product launches or planned in the near future?


As we have mentioned our focus now is to increase our retail business & distribution network. We are introducing new products & new SKUs that have requirement from our Distributors & from our customers. This will continue for next few years. We recently launched our Coolant which can match performance of any top brand & there is this shift in moving towards higher performance products to offer the full range of products to our customers. We are targeting to increase our MCO sales threefold in next 2 years from current 1800 KL level per annum. We were not selling this product during 2015-16 as we used to concentrate mainly on B2B segment during those time. Today we are selling significant volume of CI4 plus Engine oils which is also expected to grow in next few years & we are also ready to launch CK4 category in near future. Our focus is now to increase our Automotive Retail Business, where we are aiming to grab 5% market share by 2025.


Production of Lithium Complex Greases have significantly increased due to the versatility & stable performance of this thickener. Aluminium Complex greases are also becoming popular. Poly Urea Greases are used to combat higher temperature requirement due to higher speed & load. Calcium Sulphonate Greases are being tried out but has some limitations to 100% replacement of Lithium Complex Greases. As regard to future we may see usage of functional soaps ( like Lithium- Bismuth) non polar thickeners (poly-non-urea), Nano particles, Liquid Crystals & Bio Greases making inroads.



Which user segments are the biggest demand drivers for your products and major demands made by end-users. In what way will your products benefit end-users.


In B2B we are a very prominent player in segments like Defense, Railways, Steel & Automotive particularly with High Performance Greases. We supply many products on proprietary basis to these segments. We also supply synthetic Mould oils in large volumes in steel plants. These products are in demand for their superior performance & cost benefit analysis.


We are now focusing on increasing our Distribution business where we are targeting Fleets, Infrastructure with our engine oils, transmission oils, High performances greases, coolants & manufacturing Industries which uses higher performance hydraulic oils. Our MCO sales is growing very fast & we are targeting crossing 5000 KL of MCO sales by 2023. We had launched our Product in markets like Nepal last year & we are hoping to cross 1000 KL sales in Nepal market by 2021. The major take away for our customers is an Indian Brand with reliability is supplies & service with superior product performance. Our Products guarantee consistency in performance & we are constantly upgrading our products to suit the requirement of the customer & appetite of the equipment & plant & machineries that uses our products.



Do you have any Tie-ups with construction and mining OEMs who use your products. Can you list some of the emerging trends of preference for Branded products.


We have been tied up for the last 3 years with some prominent Construction Equipment manufacturers like Sany, Tata Hitachi, Premium Transmissions, TIL & few others.


We also supply to few Commercial Vehicle manufacturers like Tata Motors & Mahindra on proprietary basis for both Factory Fill & After Market through their respective Spare Parts Division. We are focusing on growing the OEM business & we expect this segment to generate 10,000 KL sales by 2024-25. Most of these products are for higher performance with longer drain period & not the regular performance products. We don’t believe in replacing an existing product, but only when we can offer, a value added proposition for our customers that will ultimately offer a cost benefit to the end users.



Tell us about your refining facilities in India, in terms of types and capacities.


We are an independent Lubricating oil & greases manufacturer & marketer under the Brand name “ Balmerol. We don’t have any refinery. We have 3 Blending Plants at Kolkata, Silvassa & Chennai having a combined capacity of 72,000 KL /annum in single shift which has the flexibility to produce more than 1. 0 lac KL annually. We also have a full fledged Application Research Laboratory (ARL) in Kolkata with NABL accreditation which is recognized by Department of Scientific& Industrial Research, Ministry of Science & Technology, Govt. of India. The major thrust areas of ARL are development of new & high performance specialty greases & lubricants through application based research with added focus on bio degradable &eco friendly lubricants.



What has been the impact of BS-VI norms on your product line.


We continue growing our core business working with our suppliers, customers & OEM partners to embrace the changes that awaits us. We are in the process of launching our Branded Diesel Exhaust Fluid which is used in BSVI compliant Diesel Engines. As the entire automotive Industry will move to BSVI emission norms, a new set of product line in engine oils, gear & transmission oils will be required & we are working with our additive suppliers to roll out these products when they will be required in the market.



Future outlook for lubes and engine oil industry and from your company perspective


Overall lubricant consumption in India is projected to grow at an annual rate of 3 percent over the next five years. Automotive, Transport & increase in Construction & Infrastructure development will continue to drive the growth. PCMO & MCO segment will register higher growth percentage in next few years with lower viscosity grades & synthetic blends gaining more share of volume. The consumer segment to grow the fastest,followed by the commercial and industrial lubricant segments. Increasing drain intervals in the automotive and industrial sectors and the modest impact of electric vehicles in the future are likely to hinder the market growth in next 5-10 years horizon.


Engine oil is expected to lead the global lubricant market during the next 5 years & this dominance is mainly due to its wide usability in the transportation sector. Transportation is projected to be the largest application in next 5-10 years horizon. This demand will be driven by mainly Asia Pacific with China & India seeing higher consumption. Synthetic Oil segment to witness the fastest growth during this period. However the growing no of Hybrid vehicles will reduce the demand for lubricants per vehicle almost by half as per industry experts. This factor coupled with increasing battery parity will reduce the demand of global lubricant market. There will be a shift in using better quality lubricants in coming years but this shift will be very gradual. We at Balmer Lawrie are fully prepared to be in line with the demand that will be coming in current & future as well to meet our customer requirements.


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