Arabian Petroleum Ltd. (APL), one of the fastest growing companies in the oil and lubricants space, has been providing a wide range of lubricants, oils, greases and other specialty products since it opened its first manufacturing facility in Taloja way back in 2006. It remained a focused industrial oil and lubricant supplier until 2015 when the company ventured into the lucrative and fast growing automotive space. Today APL operates under two distinctive divisions: SPL – the Industrial Lubricants and Arzol – the Automotive brand.
In an exclusive interaction, Mr. Hemant Mehta, Director, APL, told MOTORINDIA: “Having established ourselves in the industrial segment we were thinking to expand our business. At the same time, we were lucky to have associated with Voltas Material Handling Equipment supplying them 100 per cent of genuine oils for all their forklifts. Forklifts require a range of oils covering gear oils, transmission oil, hydraulic oils and engine oils. This motivated us to venture into the automotive segment in full force.”
A strong network of distributors across 14 States in the country helps them achieve its scale and in a short span of two years, almost 30 per cent of APL’s sale comes from the automotive segment. “We studied the market, saw the potential and found that the potential customer is not an MNC customer but is a second-tier customer. These customers were sourcing oils from the unorganized sector, and with our entry we could bridge the gap between the MNC level products and the unorganized products. We positioned brand Arzol between MNC and unorganized players. The 30 per cent of the automotive business is further broken down into 30 per cent from motor cycle oils (MCO), 40 per cent from CVs (diesel engine oils) and the rest 30 per cent from gear oils, greases, coolants and hydraulic fluids,” beamed Mr. Mehta.
Arzol, the Brand with a difference
From its industrial product experience, APL realized that to be different from the competition the company has to add value to the existing market and create worth in the prevailing product range in the market. The Director cited a couple of examples that give them an edge. He said: “We are offering 80,000 km of drain intervals for engine oils, gear oils, coolant and grease as a package, which caters upto one single oil change required by the vehicle. We have had colour-specific demands from some of the African countries that we supply to. They associate a red colour or golden color with certain global brands. Even if the quantity is small we serve the market as we have invested in attractive logo and packaging that excites us to do small packing of greases. We do small packets starting from of 500 grams of specialty greases to various oils and lubricants.”
Quite obviously attractive packaging helps APL acquire clients. Mr. Mehta feels the company has peaked at the right time. With the advent of GST the company expects that another 25-30 per cent of the unorganized sector will open up to its products. In view of the future, APL, which currently utilizes 60 per cent of the new plant in Ambernath, is contemplating expansion in its capacities. “At present the current capacity is 3000 KL per month including both Taloja and Ambernath. By 2020-21 we are targeting manufacturing of additives at a new place, so we can add another 2000-3000 KL per month.”
Spread across 14 States, APL currently boasts of 250 distributors and looks forward to doubling the number by 2020. “On the back of growing demand for high quality oils and lubricants in the local market we see ourselves growing and by 2020 we should be having a 50-50 revenue from both the Industrial and Automotive segments. The current exports should also grow from around 5 per cent to 20 per cent as we grow the number of countries that we cater to from 14 to 20.”
Gearing up for BS-VI
Giving us technological insights into the changes the oil will go through with the implementation of BS-VI, Mr. Mehta revealed: “We would have to go for the CK4 or FA4 kind of oils and we are in talks with lubricant additives companies which are developing products for CK4 and FA4. We want to be known as the early adopters, and in fact were the first companies in the private segment to launch API SN in synthetic. We are proactive and are early adopters of this kind of technology. We are studying the SCR and DPF requirement and factoring in Urea and Adblue so that we can come up with a right product by 2020.”
He added: “In 2020 we see the market migrate from the CF4 or CI4 to the CK4 or FA4 types of oils BS-IV will be short-lived. There will be a lot of testing and compatibility checks as there can be alternate fuels as well. We also have to be prepared for the market (vehicles) that run on bioethanol, biodiesel or even electric vehicles.”
It is evident that APL’s in-house testing, validation and R&D will play a crucial role in providing the company a competitive edge that will propel it to world class quality. “We get expert advice from additive companies as to how we should go about our progress towards BS-VI compliant oils. We do testing on our end to understand what kind of base oils are required for low SAPS (Sulphated Ash, Phosphorous, Sulphur) product. We can use group three or group three plus kind of base oil and store product for 6 months to see if there is any separation or any other issue, which needs to be taken care of. Apart from our own technical team here in Ambernath, we also have tests done at customer’s place.
To achieve the competence of a global player, APL is also mulling over partnering some global brand. “We have the infrastructure and we are thinking of tying up with some global brands that want to enter the Indian market. The partner can benefit from our network and people and we get to better our technological know-how,” concluded Mr. Mehta.
Infrastructure counts
APL’s state-of-the-art manufacturing will pave way for the company to become a globally reputed main stream player. Some of the highlights of the infrastructure are as below:
All raw material storage tanks with SCADA systems to ensure proper dosage of base oils in reaction vessels.
Reactors designed separately for different products.
Appropriate level of filtration at every point ensures finished products have the highest level of cleanliness.
The plant has a fully automatic filling and packing machinery for small packs with filling, capping, printing, induction sealing of a single line with a capacity of almost 600 KL per month.
World’s best Cannon Fenske Visco meters for accurate viscosity determination.
Salt spray chambers for testing rust-preventive characteristics.
Automatic Potentiometric Titrator for TAN TBN testing
IN-house Weld Load testing equipment which also helps to determine Co-efficient of Friction