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Sunday, 30 January 2011

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Quality check on lubricants, an urgent need- Kishu Gomes

The lubricant industry which faced a setback for nearly five years has recovered and is making a vital contribution to the economy. The value of the lubricant industry is around Rs. 16 billion.

The industry has revived after a year on year negative growth of around four to five percent during the past five years. Industry stakeholders are optimistic of a brighter year for the lubricant market which is rapidly expanding.

CEO/MD, Chevron Lubricants Lanka PLC, Kishu Gomes said the lubricant industry is on a solid growth path and the outlook for 2011 is positive with potential for further growth.

“Peace, stability and increased economic activities in the North and the East contributed to the revival of the industry”, Gomes said.

The current size of the lubricant market is around 55 million litres which is shared by 16 players including Cepetco. Caltex and IOC manufacture lubricants while the others import finished products.

Industry experts said that 16 players are enough for a small market and added that there is no space for more entries.The lubricant market comprises top multinational and regional brands.

Gomes said there is no mechanism to check the quality of lubricants marketed by players and added that there is an urgent need for a system to check the standard of products.

“While there are quality standard specifics there is no proper mechanism to check the quality of lubricants. Players are expected to prove quality only on paper”, he said.

Sale of adulterated products and importation of lubricants by unlicensed players are issues affecting the growth of the industry.

Gomes said there are around 12 cases currently pending in court against adulterators filed by police following raids conducted on evidence of products used to adulterate lubricants.

Proper regulation of the lubricant market is paramount for the sustenance of the industry. Safety of engines of automobiles and industrial machines will be secured with the use of quality lubricants.

While hailing the move by the government to reduce the custom duty on a litre of petrol from Rs. 15 to Rs. 5 he said he hopes that the right policy framework will be created for the sustainability and expansion of the local lubricant manufacturer to enable value creation for the country.

The Ministry of Finance slashed the custom duty on a litre of petrol to maintain the current market prices.The move is aimed at reducing the losses incurred by the Ceylon Petroleum Corporation and the Lanka Indian Oil Company.

Gomes said it is paramount that the government creates an environment within which the prices of energy products can be maintained at reasonable prices for the economic growth of the country.

Chevron Lubricants was ranked 16th among the Top 20 powerful entities in Sri Lanka by Business Today magazine.

At the ceremony Gomes said the company contributed immensely to value creation and its local manufacturing offers huge benefits to the Railway Department, CTB, CEB and large industries.

Chevron Lubricants has contributed Rs. 3 billion to government coffers by way of taxes and duties. The company has provided over 5000 indirect jobs through its islandwide distribution network, channel brands and export of lubricants to Bangladesh and the Maldives.

Attired in the national dress among CEOs and Chairmen clad in Western clothes, Gomes drew the attention of the audience with his impressive speech that paid glowing tribute to the role of Sri Lankan employees in developing businesses.

 

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