MOSL: GULF OIL LUBRICANTS - Multiple drivers at play - Capacity expansion, widening reach, better brand recall

GULF OIL LUBRICANTS: Multiple drivers at play; Capacity expansion, widening reach, better brand recall

(GOLI IN, Mkt Cap USD0.7b, CMP INR904)

We visited Gulf Oil Lubricants’ (GOLI) Silvassa plant. Our key takeaways:

 State of the art plant

• Established in 1995 over a 7.5-acre plot, the capacity of the plant has been increased from 75,000kl to 90,000kl, based on two shifts. The plant can be run on three shifts as well if there is commensurate demand.
• The company even has a blow molding facility of 3,000mtpa. The plant helps in ~20% reduction in cost of bottles through optimum usage of plastics in addition to better quality control in bottling vis-à-vis outsourcing.
• Due to high level of automation, it has been able to reduce blending time by half.
• To overcome space constraints, GOLI has come up with a multistory auto storage & retrieval system (ASRS). This is the first of its kind warehouse management system used by a lube plant in India. The 50,000kl Chennai plant has a more advanced version of ASRS.
• Silvassa also boasts of a state of the art OCME filling machine from Italy, which is one of its kind in India. It fills as many as 110 motorcycle packs per minute.
• GOLI has recently commissioned two base oil storage tanks, which help in managing inventory against expected price fluctuations.
• It has also come up with a AdBlue manufacturing plant of 12,000kl per annum. AdBlue would be mandatory once BS-VI is introduced in the country.