Lubricant industry heading for NE boom

by Lalin Fernandopulle

The lubricant industry, a potential contributor to the country’s economy recorded a five percent growth in the post conflict era spurred by the favourable business environment in the country, said Managing Director, Chevron Lubricants Lanka plc, Kishu Gomes. He said the feat achieved by the industry amidst many challenges is encouraging and added that the lubricant market in Sri Lanka has good prospects following the global economic recovery.

The lubricant market in Sri Lanka was crawling at a very sluggish pace of 2-8 percent due to the unsavoury business environment in the country during the height of the conflict.

“The freedom in the North and the East has opened wide horizons for the lubricant market which is growing at a rapid pace.

MD Chevron Lubricants Kishu Gomes.

The demand for lubricants is on the rise following the resumption of agriculture, fisheries and other industries in the North and the East”, he said.

“Farmers and fishermen are seeking more advanced machinery to increase their yield and earn more. The demand for lubricant products would outpace supply with the complete revival of livelihoods in the Northern and the Eastern regions”, Gomes said.

He said the President had promised vehicle merchants that the import duty on automobiles will be slashed to facilitate more import of vehicles to the country.

The duty on vehicles in Sri Lanka is around 300 percent and is the highest among many countries in the region.

Chevron Lubricants, a leader in the lubricant market posted a 61 percent growth in the first quarter of this year with a net post tax profit of Rs. 374 million. “The decline in the prices of imported raw material and the growth in the Maldives and Bangladesh markets contributed to the growth of the lubricant business in Sri Lanka”, Gomes said.

The company which operates around 400 oil marts across the country will set up more outlets in the North and the East this year.

Chevron was the first in the industry to commence operations in Jaffna which is turning out to be a vibrant market.

Chevron operates branded service stations of which Xpress is the flagship brand followed by Lube and Star Lube and Delo Lube.

Sri Lankan lubricant market comprise 16 players such as Shell, Mobil, Servo and Bharat Petroleum to name a few among many international companies.