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Thursday, January 6, 2011

Positive growth for lubricants

Sanjeevi JAYASURIYA

The lubricant industry recorded a positive growth last year reaching a moderate growth rate of four percent at the end of the year.

Though four percent growth is not very high compared to other industry growth the lubricant industry recovered from negative growth recorded in previous years. The industry is on a positive trend, Chevron Lubricants Lanka Managing Director Kishu Gomes told Daily News Business.

The industry is in the right footing as far as the growth is concerned. It was able to reach new markets in the North and the East and this enabled the industry performance to enhance, Gomes said.

There was a significant growth in these markets filling the vacuum.

The lubricant industry is now stabilized in the region and with all the development activities in the region, especially in the Eastern Province lubricant industry could benefit immensely.

Many companies setting up to business ventures and livelihood development aimed at sectors such as agriculture, fisheries, construction and trade 2011 will be a progressive year for several industries including the lubricant industry.

These economic activities are advantageous for industry development, he said.

The macro economic environment in the country is progressing well and this not only benefits the lubricant industry, but other sectors as well for production volumes and revenues to grow.

The reduction in vehicle duties will have a positive impact on the lubricant industry and the country's vehicle population is growing at a rate of over 40 percent including in brand new and reconditioned vehicles. This is favourable for the lubricant industry.

The lubricant industry is highly competitive as there are 16 players to share a market size of 55 million litres per annum and the Indian market is large with 1.5 billion litres per year.

The industrialists find it difficult to operate in a viable manner as it is highly concentrated. The regulators need to keep a closer eye to find a solution for this as the profitability of the companies suffer due to this, Gomes said.

source - www.dailynews.lk