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Gulf Oil forms JV with Oil Bangladesh

By Our Staff Correspondent

MUMBAI JULY 4. Gulf Oil Corporation (GOC), a leading player in the lubricants business, has entered into a joint venture with Oil Bangladesh Ltd. (OBL) According to an agreement signed in Dhaka, lube blending operation will be started in Bangladesh which will function under a newly formed company, Gulf Oil Bangladesh Ltd. (GOBL), with its head office in Dhaka.

Gulf Oil will hold 51 per cent stake while Oil Bangladesh 49 per cent in the new company. With this joint venture, GOC will become the first Indian lubricant company to invest in the international market.

The total size of the lubricants market in Bangladesh is estimated at 70,000 tonnes annually with an annual growth rate of 6-8 per cent.

In the first year of operations, GOBL is targeting a market share of 7.1 per cent, which will translate into a turnover of $5.4 million.

Subsequent to the opening of the lubricants market in Bangladesh in 1997, GOC appointed Oil Bangladesh as its sole distributor in 1999. Since then, its sales have peaked at 200 kl a month, representing a market share of 3.5 per cent.

In order to take advantage of the duty differentials between raw materials and finished products, GOC has decided to start a lube blending operation in Bangladesh by forming this JV.

Gulf Oil Bangladesh will blend and exclusively market Gulf branded lubricants. It will import about 25 per cent of the material from India and Italy, mainly representing premium quality base oils other raw materials and also finished products which cannot be blended in Bangladesh.

The GOC Executive Director, V. Ramesh Rao, said "We are happy to cement our fruitful association with OBL and start a JV entity and it will be our endeavour to explore further expansion opportunities in international markets".

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