IOC to launch its first biodegradable lubricant next year

IOC to market bio-lubricant next year

Indian Oil Corporation (IOC), the nation's biggest oil marketer and
refiner, will launch its first biodegradable lubricant next year. The
company is conducting trial runs on the lubricant and would soon
evolve a marketing and branding strategy for the product.

The product would be marketed as a separate brand. "Lab tests for the
product are over. We are doing extensive engine trails at present. In
the next one year, the product should hit the market under a suitable
brand name," said a senior executive from IOC. The research on the
product had begun two years earlier.

A biodegradable lubricant can be vegetable oil-based or based on
synthetic esters manufactured from modified renewal oils, from mineral
oil-based products. Most liquid lubricants used at present all over
the world are petroleum-based mineral oils. "Use of biodegradable
lubricants which are mainly derived from genetically modified
vegetable oils, would be used in agricultural and forest machinery,
and the transport sector," said a Mumbai-based analyst.

There are 44 lubricant companies in the market including Total, Gulf,
Shell and Vedol, besides brands from the three government-controlled
oil companies - IOC, Bharat Petroleum Corporation and Hindustan
Petroleum Corporation - which together hold over 50 per cent share.
IOC, however, is the dominant company in the country's lubricant
market, with its Servo brand of lubricants. The Servo range includes
over 500 lubricants and 1,200 formulations.

The total lubricant market in India is 1.6 billion litres, of which
automotive use is about 950 million litres. Castrol India, the other
dominant player, claims to have 27 per cent of the market. While
analysts say Castrol cannot match public sector units in coverage due
to their 30,000-strong petrol station network, it has strong
distribution presence through workshops and spare parts suppliers-over
70,000 outlets, which compares well with the 40,000-plus for IOC's
Servo.

IOC is also conducting research in areas like oil refining technology
and producing diesel from algae. The company will shortly commission a
project at its Faridabad centre, where it will install technology for
coal gassification and production of ethanol from biomass. The company
is also in talks with international energy institutes to tie up for
research and development.

Source:Business Standard, Mumbai, April 22, 2010