Lubol India Limited (A)

Abstract

With complete liberalization of imports, blending, and pricing in the lubricants sector, announced by the government of India in the early 1990s, Lubol Petroleum Inc (USA) (LPI) was one of numerous multinational companies, which flocked to India. They entered into a 50-50 partnership with NOC, a leading public sector petroleum company, to form Lubol India Limited (LIL) early 1995. LPI had amongst the highest worldwide shares in lubricants and carried a well respected image for high quality. They saw the Indian market as a sizeable opportunity, and collaboration as providing immediate access to blending facilities and an established national distribution network. NOC was an established player in the lubricants market with its indigenous brands having an 8% market share. The CEO of LIL and the Assistant CEO and General Manager (Logistics) were contemplating the business plan for the year 2002-03, which had to be tabled to the board of directors. The plan had an objective of making LIL a 9% player by the year 2002-03 from its current share of about 1% in the extremely competitive lubricants market in India. They were examining where to locate depots and how to manage them for an effective and efficient downstream supply.