GS Auto is looking at investing Rs. 150 crore in lubricant and additive business.
Story by:
Deepanshu Taumar and Anusha B
Ludhiana-based GS Auto International plans to invest Rs. 150 to Rs. 200 crore in the next three years to diversify into the lubes and additive business. The company plans to setup its special division for lubricants and additives serving across two-wheelers, three-wheelers, passenger vehicles, and commercial vehicles. At the top of the list is a venture to manufacture AdBlue solution. With the Indian automobile market working towards meeting the BS VI emission standards by 2020 against the earlier deadline of 2023, it does not come as a surprise that the company has signed a 50:50 joint venture with Blue Basic S.r.l., Italy, to manufacture AdBlue additive in India by setting up a new company called Blue Basic India. Blue Basic India, in the next three to four months, will set up a facility at Ludhiana at an investment of Rs.20 to Rs.30 crore according to Anadi Sharma, President – Marketing, GS Auto International. Mentioned Sharma, “The reason for setting up a shop in northern region is because the government has enforced Euro-IV norms for commercial vehicles in seven northern states of the country. It will be easier to supply.” Looking at setting up mirror facilities in the Southern, Eastern, and Western region of the country, the move is looked upon as a good opportunity to diversify from the traditional business of manufacturing suspension and fastening products like U-bolts, centre bolts, pins, hub bolts, nuts, bushes, trailer-axle, trailer assembly and sub-assemblies, earthmoving and construction equipment parts, propeller shaft components and casting products. GS Auto International has also been manufacturing clutch and brake linings for sometime now.
Hinting at packaging and marketing the AdBlue supplied from Italy, Claudio Mascialino, Director, BlueBasic S.r.l., expressed a need to focus on the quality of the solution. “If the solution fails to meet the prescribed standards, there’s a possibility of damaging the SCR system or an increase in pollution,” quipped Mascialino. Necessary to be used in the SCR (Selective Catalytic Reduction) after treatment system of new generation diesel engines to help reduce NOx and particulate matter emissions, especially those that power commercial vehicles, the aqueous solution, according to Mascialino, costs in the region of Euro 0.8 per litre in Europe. In India, the cost is yet to be ascertained. Much would depend on the availability of the right fuel. Apart from BlueBasic, GS Auto International has also tied up with US-based X1R lubricants. The idea is to sell additives for an engine system, transmission system and fuel system. The NASA certified X1R performance products are claimed to enhance engine performance, decrease noise level and increase mileage up to 10 per cent. The X1R products would be first imported to India and sold through the GS Auto network. After gauging the demand, a local manufacturing facility would be setup in India. Said Sharma, “The USP of X1R additives is that it does not go out for some time even if oil goes out, unlike other additives. The additive gets impregnated with metal and avoids seizure.
Online promotion of X1R products has already begun. The response has been very good according to Sharma. Focus with the lubes and additives, said Sharma, is on the aftermarket. OEM thrust will follow. The company will sell Adblue and X1R through its own network of 150 distributors and 50,000 retailers. Out of the 50,000 retailers, there are around 20,000 retailers who are already into lubricants and additive business. Confident that they are moving in the right direction, Sharma exclaimed that their aftermarket business has been picking up. He is confident that it will continue to grow. The OEM business of the company addresses the needs of automobile manufacturers like Ashok Leyland, Daimler India Commercial Vehicles, Hindustan Motors, Mahindra & Mahindra, Maruti Suzuki Ltd, SML Isuzu and Volvo in the domestic market. Over 10 to 15 per cent of the produced components are exported.
