Nandan Petrochem Ltd. is India’s first complete range of automotive lubricants and greases and the largest AdBlue maker. It represents the new India we live in and exemplifies how success can be achieved by adding value to the diverse market needs. In this interaction with Rajesh Rajgor, the company’s Managing Director Nandan Agrawaal outlines the brand’s strategies, growth curve and unique selling propositions
Making a reputation for oneself in a fast-paced economy like India’s isn’t easy. It’s equally tough to disrupt an industry like oil and lubricants either. And, above all, achieving all that in a span of 10 years is no mean feat! However, Nandan Petrochem Limited (NPL) has been able to do all that and more! It is today a leading manufacturer of AdBlue and the widest range of automotive lubricants, greases, transformer and white oils, liquid paraffin, rubber process oils and specialty lubricants operating under the brand ‘VELVEX’.
VELVEX AdBlue, co-branded with OEMs, has established itself in the market today. The company also hopes to establish itself in the B2C market for its lubricants, oils and greases. “The OEM business provides us with the economies of scale, goodwill, marketability and quality approval. However, the bottom-line would mostly come from directly supplying to the B2C industry and our market valuation will grow even more as we provide additional services to the B2C industry,” says Nandan Agrawaal, Managing Director, Nandan Group.
Building on the Brand
It is quite evident why VELVEX would further bolster its position in the market. The quality and credibility established as a strong brand in the AdBlue space would only trickle down to the lubricant and greases segment. “The testimony of the fact that the OEMs acknowledge VELVEX AdBlue as a strong brand is that 80% of our sales revenue comes from AdBlue’s association with OEMs. The rest of the 20% comes from the B2C aftermarket segment. Going forward we want to cross-sell our lubricant and greases also to the aftermarket space, leveraging and building on the brand organically,” shares Agrawaal.
VELVEX has also established a dynamic social media presence on platforms where many next-generation young transporters and decision-makers spend their time. Whether it’s on LinkedIn or Facebook, the VELVEX brand has been able to hold its own against other businesses in this segment. This is due to the fact that the management has a strong belief system regarding the changing face of marketing and branding in today’s automotive sector. Given this flexible and evolving mindset, Agrawaal believes that now is the appropriate moment to focus on B2C needs via channel partners and distributors.
A Brand on its Own
VELVEX has further amplified its intention as a ‘go to’ brand in the AdBlue, lubricant, oil and grease space in India with its superlative brand visibility at Asia’s largest construction equipment expo, Excon 2022. “In order to address the contemporary mobility needs of their machines, fleet operators, potential distributors and partners flocked to our attractive pavilion at Excon in May this year to get a better understanding of the dynamic young brand. At our stand we had a lot of inquiries about AdBlue as well as lubes and greases. They are ecstatic to work with a company that shares strong margins with them and invests heavily in brand awareness. Today, we offer the complete spectrum of lubricants, transmission fluids and hydraulic fluids, giving customers the assurance that they will discover the perfect solution under one roof,” Agrawaal states.
To further build the brand among the trucker segment, VELVEX has gone ahead with the UP Yoddh as team sponsorship in the Pro Kabbadi League (PKL) Season 9, giving the company and its products good visibility among the transport and fleet operators as well as the mechanic fraternity. “We further wish to strengthen our brand by executing large-scale branding initiatives on ground. We have always aimed to become a preferred partner, delivering value to customers. We were ahead of the curve when in 2011 we introduced AdBlue in India. The OEMs, the industry and the retail market looked on to us as someone who is an innovator and disruptor,” Agrawaal says.
“We want to be ahead in the race even as we embark upon highlighting our brand VELVEX into lubricants, oil, and greases as well, apart from of course showcasing various dispensing options of the pioneering AdBlue product,” he adds. The company demonstrated its AdBlue Dispensing Unit (ADS), which is used to replenish diesel exhaust fluid in highway petrol stations, huge logistics parks and large logistics companies. The VELVEX ADS is India’s first automated AdBlue dispensing system built to the international VDA standard and fully compliant with ISO 22241 standards. “It is legal metrology-certified and manufactured in-house by us,” Agrawaal points out.
“This move is keeping in mind that going forward the majority of sales of AdBlue in India would happen in bulk and not in small packs. The company showcased two dispensing unit variants, one with a 2,000 litres storage capacity and another with 4,000 litres storage. It is a completely automated unit with a sensor each for urea concentration, quality and level, which is connected to the cloud. “On a real-time, basis we can monitor the daily sales and tank levels. And before the stock goes below a safety level, we are ready to deliver (refill) even before the order is placed,” he shares.
Expansion Plans
Over the years, NPL has developed expertise in manufacturing tailor-made genuine oil for major OEMs. Depending on the application, suitable oils are formulated to meet the OEM-specific requirements. One cannot neglect the integral role research and development plays in the entire scheme of things. NPL boasts of well-equipped modern testing facilities that have helped develop customised products. As of now the company has three manufacturing plants, two in Taloja (Navi Mumbai) and one in Silvassa for lube oil blending, transformer oil liquid paraffin, white oil refining, rubber processing oil and grease manufacturing. NPL also has 12 manufacturing plants for AdBlue.
The company wants to scale this up to 40. “We have an estimate on how demand for lubes, oil, and greases as well as AdBlue would increase in the future years,” Agrawaal says. “On the AdBlue side, our current capacity is around 4 lakhs KL per year and every facility we build will have a capacity of 25,000 KL per year. Our lubricant manufacturing facilities are primarily located in the western part of the country. We have also expanded our Taloja facility to include liquid paraffin and white oil to meet the needs of the pharmaceutical, FMCG and plastic industries. In Kharagpur, we are also building a lubricant facility for eastern India,” he elaborates. Notably, NPL already has three AdBlue plants in the eastern part of India, namely at Kolkata, Guwahati and Jamshedpur. A lube plant closer to Kolkata will save them logistics cost on raw material imports, giving them cost advantage and benefit at times when the bottom-line is pressed due to geopolitical issues.
Managing Global Scenarios
As Nandan Agrawaal points out, “Base oil prices have skyrocketed but we are not passing the entire increase to customers since they may not be willing to absorb it right away. As a result, there is a price difference between institutional customers such as OEMs and the aftermarket. So, we will have to sort of hold on until we get the extra price rise. Fortunately, all our customers have switched from a quarterly to monthly PVC (price variation clause). We were proactive in our communication, which aided us in lowering our moving costs.” When asked about the export strategy for VELVEX, Agrawaal states that the company wishes to export AdBlue to nations moving to BS IV and BS VI or Euro emission standards.
“Similar to our strategy in India, where we entered the market considerably earlier than an AdBlue market being created, we would like to use the same strategy in nations where emission limits would be implemented in the next three to four years,” he shares, adding, “We would like to work with a local partner who is familiar with the culture and location and we would bring our technology and experience.” As VELVEX achieves its goal of further disrupting the oil and lubricant space in India, it will undoubtedly spark a desire to engage with India’s young transporters, distributors and automotive enthusiasts who want to align their adrenaline rush and emotional affinity with durable and dynamic products that deliver value for money.