LUBRIZOL INDIA LIMITED

Lubrizol India Limited (LIL) is a Public Sector Undertaking under the administrative control of the Ministry of Petroleum and Natural Gas, Government of India. The Company was formed by virtue of the Formation Agreement dated 2nd December 1965 entered into between the Lubrizol Corporation, U.S.A. (LC), who are world leaders in additive business and the Government of India (GOI), with the purpose of servicing Indian customers with additives and performance chemicals for petroleum fuels and lubricants. The Company was incorporated in 1966. 60% of the subscribed equity capital of the Company is held by the GOI and the balance 40% by LC. The Company has a Technology Transfer Agreement (TTA) with LC for transfer of technology for Chemical Additives.

LIL is a Speciality Chemical Company serving the needs of the Petroleum Industry. LIL develops, manufactures and markets Additive Systems for Automotive and Industrial Lubricants and for treatment of fuels. LIL has two manufacturing units in Maharashtra; one unit situated at Trans Thane-Belapur Industrial Complex near New Bombay and the second unit located at Taloja, District Raigad.

Additives are complex synthetic chemicals which are added to petroleum fuels and lubricants to achieve the desired end use applications. Present day automotive and industrial oils owe their performance mainly to the chemical additive system added to them. The additive packages sold by additive manufacturers to the oil companies have components required to perform certain distinctive functions such as detergency, dispersancy, oxidation stability, antiwear property, rust and corrosion inhibition, viscosity index improvement, etc. For each of these basic functions, there are many different approaches requiring different chemicals or combination of chemicals that may provide the necessary performance characteristics. Chemical additives are also used for improving the flow characteristics of crude and petroleum products. The products of the additive manufacturing company are synergistic combinations of additive components in the form of finished additive packages that provide all the characteristics desirable for a particular application.

LIL started its manufacturing operations in 1969 with a Blending Plant, where imported intermediates were blended to Finished Additive Packages for marketing in India. Over a period of time, LIL, with active assistance and guidance of the Collaborators and Government of India, has set up manufacturing facilities for indigenous manufacture of all high volume Additives. LIL manufactures different types of Metallic Antioxidants, Overbased Sulphonates of Calcium, Overbased Phenates of Calcium, Engine Oil Dispersants, Viscosity Index Improvers, Lube Pour Point Depressants, Magnesium Sulphonate Detergents, High Base Phenate Detergents and Extreme Pressure Additive Components for Gear Oil.

The success of the Company dealing in Speciality Chemicals and Performance Chemicals depends on its technological base and its ability to solve problem through Research and Development. LIL has, therefore, established its Research & Development Centre adjacent to its manufacturing plant. The R&D Centre consists of a Research Laboratory having facilities for analysis and synthesis, a multi-purpose Pilot Plant and a modern Engine Testing Laboratory. It is this technological base which has enabled the company, which was enjoying almost near monopoly in the sale of performance chemicals to lubricant manufacturers in India till 1992, to weather the global competition which has emerged consequent to liberalisation by the Government of India and the gradual lifting of trade barriers.

LIL is one of the handful of companies outside U.S.A., having technology for development, manufacture and engine evaluation of major engine lubricant oils. Bulk of the additives used by the oil companies in India for formulating lubricating oils are supplied by LIL.

The Company’s efforts were well-directed towards consolidating the established ISO-9002 Quality Management System. Both the Manufacturing Units of the Company have received ISO-9002 Certification from the Bureau Veritas Quality International.

LIL started with an authorised share equity share capital of Rs.75 lakhs and subscribed capital of Rs.60 lakhs in 1966. The Company’s share capital has since then expanded to Rs.1920 lakhs through the issue of Bonus Shares, which constitute about 97% of the total equity of the Company.

The Company, which had a near monopolistic position, has effectively combated the competition, which has emerged on account of the opening up of the economy by the Government of India in the year 1991, as can be seen from the performance during the last five years given in the table annexed.

Sales turnover of the Company during 1996-97 was Rs.365.36 Crores registering an increase of 4.9% over sales turnover of 1995-96. Company's Profit Before Tax during 1996-97 improved to Rs.55.79 Crores registering an increase of 61.4% over that for the year 1995-96. The Company also earned a record all time net Profit After Tax of Rs.33.84 Crores which surpassed the previous year's figure by about 47.3%.

The Company has so far entered into three Technology Transfer Agreements (TTA) with its Collaborators, The Lubrizol Corporation, U.S.A., who are one of the world leaders in Additive Technology. The last TTA, for transfer of manufacturing and formulation technology for Chemical Additives effective from 1^st January 1988 has been extended upto 31st March 1998.

All the major projects envisaged in the existing TTA have already been implemented.

The number of employees in LIL is 708. Industrial relations in the Company are cordial.

The Company continues to comply with the directives of the Government for reservation of posts for Scheduled Castes, Scheduled Tribes and Other Backward Classes (SC/ST/OBC) in the services of the Company. As on 31-3-1997, the percentage of SC/ST/OBC to the total strength was 49.58%. The Company also contributes to the all-round development of nearby Villages and takes interest in other community development programmes involving weaker sections of society particularly Scheduled Castes, Scheduled Tribes and Other Backward Classes by contributing both in terms of managerial time and money.

The Company continues to accord high priority to HRD activities and conducts training programmes/seminars both in-house and outside. Several awareness/appreciation programmes relating to Quality Systems and Total Quality Management are being conducted in line with the Company's commitment to provide quality products and services through adoption of ISO-9000 Quality Systems.