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As EV, RE systems advances, lubricants demand is going to increase meticulously
Interviews- Jan 29,24
In this interview with Rakesh Rao, P Sudhahar, Executive Director (Lubes), Bharat Petroleum Corporation Ltd (BPCL), tracks the changing dynamics of the lubricants market.
Bharat Petroleum Corporation Ltd (BPCL) is one of the leading players in the lubricants market in the India. Lubricant manufacturers - who demonstrate agility in addressing the unique requirements of each industry, encompassing environmental considerations and regulatory standards - are well-positioned to capitalise on the lucrative opportunities unfolding in the dynamic lubricants market, says P Sudhahar, Executive Director (Lubes), BPCL, in this interview with Rakesh Rao.
As a supplier of lubricants, how is BPCL supporting the growth of user-industries? Would you like to highlight some of your new offerings?
In response to the evolving landscape of net zero initiatives, ethanol blending, and advancing technologies, it is imperative for lubricant manufacturers to forge close partnerships with industrial stakeholders. Through collaborative efforts with our OEM partners and industrial customers, we are committed to delivering lubricants and specialised products that not only enhance the efficiency of industrial processes but also contribute to environmental sustainability. Our substantial investments in research and development empower us to continually innovate and provide cutting-edge solutions for a more sustainable future.
We have recently unveiled a comprehensive line of lubricants meticulously crafted to enhance both fuel and energy efficiency. Emphasising a customer-centric approach, we specialise in providing bespoke solutions tailored to the unique needs of our customers. Building on our legacy as pioneers in drilling fluids in India, we have successfully developed cutting-edge products specifically designed for deep-sea drilling, aligning with the precise requirements of our customers.
Moreover, our commitment to innovation is exemplified by the introduction of engine oils that comply with E20 standards, demonstrating our dedication to staying ahead of evolving industry regulations. Going beyond traditional lubrication boundaries, we are expanding our portfolio to include innovative coolants designed for servers and other advanced applications. This forward-thinking approach underscores our ongoing efforts to meet the diverse and evolving needs of our customers while contributing to advancements in sustainability and efficiency across various industrial sectors.
Which industries like automotive, railways, defence, renewable energy, etc are driving the demand for lubricants? What kinds of new opportunities are opening in the end-user industries?
India's growth trajectory is clearly evident across all sectors, bolstered by a substantial infrastructure push outlined in the Union Budget of 2023. The government's strategic allocation of capital expenditure, marked by a notable 30 per cent increase, particularly in initiatives such as Bharatmala, Sagarmala, Udaan, and Industrial Corridors, is set to create a significant momentum for overall economic growth.
This ambitious investment is anticipated to position India as the third-largest construction market globally, unlocking vast opportunities for growth in key industries. The steel, cement, and coal sectors, in particular, are poised to experience a surge in demand as a direct result of the burgeoning infrastructure development. This synchronised effort between the public and private sectors underscores India's commitment to robust economic growth and the creation of a dynamic and resilient national infrastructure.
India has been ranked third globally and fourth largest manufacturer of commercial vehicles. By 2026, the automobile component sector will contribute 5-7 per cent of India’s GDP. The Indian auto sector has grown at a CAGR of 8-10 per cent over the last decade, driven by factors such as rising disposable incomes, increasing urbanisation, and a growing middle class.
The escalating trends of urbanisation and surging industrial demand are poised to drive a Compound Annual Growth Rate (CAGR) of 6-8 per cent in electricity demand. To meet this growing need, there is a concerted emphasis on integrating renewable energy sources, implementing smart grid technologies, and embracing demand-side management strategies within the power sector.
This focus on renewable energy integration, coupled with the adoption of smart grid technologies and demand-side management practices, is set to revolutionise the energy landscape. As the renewable energy industry expands, it presents lucrative opportunities for lubricant manufacturers to innovate and tailor products specifically designed to meet the unique demands of essential infrastructure, including wind turbines, solar tracking systems, and other components within this dynamic sector. This strategic alignment with the evolving energy landscape underscores the pivotal role that lubricant manufacturers play in supporting sustainable and technologically advanced solutions for the future.
While the demand for railroad engine oil in the railway sector is experiencing a decline with the major trend of electrification, there remains a crucial role for other specialised lubricants. Despite the shift towards electrification, high-speed trains and heavy freight trains still rely on a variety of specialised lubricants to ensure optimal performance, especially in challenging operating conditions.
The burgeoning opportunities within these industries lie in the development of high-performance lubricants distinguished by exceptional durability, efficiency, and environmental sustainability. As electric vehicles and renewable energy systems continue to advance, there is a growing demand for lubricants meticulously tailored to meet the evolving technological applications of these sectors. Lubricant manufacturers that demonstrate agility in addressing the unique requirements of each industry, encompassing environmental considerations and regulatory standards, are well-positioned to capitalise on the lucrative opportunities unfolding in the dynamic lubricants market.
What are key trends to watch out for in the lubricants industry in the coming years? (With respect to requirements of industrial customers, chemical composition of lubricants, demand drivers, etc)
The lubricants industry is poised for significant advancements in the foreseeable future, characterised by notable trends. There is a growing focus on synthetic lubricants, which are gaining prominence owing to their superior performance and extended longevity. They are increasingly preferred in applications with extreme conditions or prolonged service intervals.
Currently, the industry is oriented towards the cost of lubricants, but in the upcoming years, there will be a paradigm shift towards the total cost of ownership. Key drivers of this transformation will be lubricants that enhance efficiency and facilitate longer drain periods. This shift is anticipated to foster increased collaboration and partnerships for tailored solutions in the realm of industrial applications. The integration of digital technologies and the Internet of Things (IoT) into industrial operations is reshaping the landscape of lubricant usage. Companies are increasingly embracing predictive maintenance strategies, leveraging data analytics to optimise lubrication schedules and minimise downtime.
In the forthcoming years, environmental sustainability and regulations are anticipated to become more stringent. Producers have already initiated a focus on the recycling economy for packaging and re-refined base oil. Moving forward, industry accountability for the handling and recycling of used oil is expected to emerge as a significant driving force. Lubricant manufacturers are gearing towards providing end-to-end solutions across the value chain to meet these evolving environmental responsibilities and regulatory demands.
What are key challenges before the lubricant industry at present?
The Lubricant Industry perceives challenges as opportunities. Presently, around 45 per cent of base oil is imported, but in the coming years, the indigenous production of base oil is expected to rise, significantly reducing our dependence on imports. The increasing awareness is poised to deal a significant blow to spurious (counterfeit) products. MAK Lubricants has proactively addressed this by developing a QR solution, ensuring 100 per cent product authenticity for customers.
The challenges posed by the COVID-19 pandemic and the conflict in Ukraine have strengthened our supply chain resilience, enabling us to navigate fluctuating base oil prices and other raw material uncertainties. Anticipated regulatory directions for re-refined base oils are set to create new business opportunities for both customers and manufacturers. We are entering an era where the Lubricant Industry is poised for transformative changes.
With sustainability becoming in all industries (your customers), what kind of opportunities does it present to your company?
As industries embrace a multitude of sustainability measures, BPCL is well-positioned to seize the opportunity and develop world-class lubricants. The increasing adoption of wind energy systems by customers presents a promising prospect for the development of fully synthetic wind turbine gear oils, offering extended drain intervals.
The adoption of alternate fuels by Original Equipment Manufacturers (OEMs) opens up an opportunity for the formulation of specialised engine and transmission lubricants designed to cater to the specific requirements of automotive applications.
Continuous advancements in the electric vehicle (EV) sector create opportunities for developing specialised EV fluids, encompassing transmission fluids, coolants, greases, and more. In response to the rising customer demand for a lower total cost of ownership, there exists an opportunity to develop energy-efficient lubricants.
Amidst a growing emphasis on environmental considerations, customers are actively seeking environmentally conscious alternatives. This trend presents an opportunity for the development of lubricants with environmentally acceptable properties.
What are your growth plans for BPCL in India in the next 2-3 years?
Over the past three years, we have undergone a transformative journey, realigning our business priorities towards enhancing the bottom line and fostering top-line growth through value addition for our customers. This strategic shift has not only brought us closer to our customers but has also provided invaluable insights guiding our actions.
We have established a sector-specific approach to cater to our customers, offering tailored solutions to meet their unique needs. Our strategic plans involve sustained growth, surpassing industry benchmarks, with a focus on key sectors such as Auto, Power, Steel, Food, and Pharma. The drivers for our growth will revolve around providing customised solutions and reducing the overall cost of ownership for our customers.
P Sudhahar
Bharat Petroleum Corporation
BPCL
Ministry of Petroleum and Natural Gas
Bharatmala
Sagarmala
Udaan
lubricant
Industrial Corridors
Rakesh Rao
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