Shell India targets the automotive OE segment

Shell India Pvt Ltd, a Rs 1000 crore company, is expected to gain significant export revenues indirectly as companies like Maruti Suzuki and Mahindra & Mahindra plan increased exports of their cars and tractors respectively in the next few years.

“In India we have an OE presence and some of the tie-ups like those with Skoda, Maruti Suzuki and M&M give us a good market. Globally we have tie-ups with big OEMs. The idea is to build long-lasting relationships where we do a lot of R&D and marketing together,” says Donald Anderson, Country Head - Lubricants, Shell India. Anderson mentions that his company’s global strategy is focused on the growth markets, specifically the BRIC countries. “Until April 2008 we had two companies invested into our company in India but since then we have bought them over. We can now maximise the synergies. A big opportunity is the export potential for engines and tractors,” he says.

Shell lubricant customers in India include Wartsila, Maruti Suzuki, Volkswagen and Skoda among others. The company has reached a delivery milestone of 25 million litres of lubricants to M&M. Shell lubricants, over 3,000 of them across a wide range of applications, are manufactured at a global network of base oil plants, blending and grease plants and marketed in 120 countries.

“We have a plant outside Mumbai where we import or locally procure the base oils. We sell a lot through the M&M and Maruti Suzuki franchise outlets. While we sell the power generation oils directly, considerable sales are done through distributors,” notes M Balachandran, VO (Marketing) Shell India.

Anderson says that Shell India plans to expand its plant capacities here. “We are likely to be coming into a crunch sometime in 18 months and we are taking a decision on this. Our plant can do around 130 million litres per annum. There are different ways we can generate capacities,” he says.

Around 600 to 700 different products are sold in India by Shell. “The product families are around 250. The automotive industry consumes around 60 to 70 product families. Ours is the second biggest private lubricants company in India,” adds Balachandran.

Shell has a R&D company in Bangalore called Shell Technology India. “Being a global company, we have these R&D and technology centres around the world. Most of the real R&D will continue to be done in the existing centres of Shell around the world,” says Anderson.

The motorsport link

Shell, which has tie-ups with Ferrari, Ducati, Audi and Nascar, has for long been associated with motorsport and has been sponsoring races in Formula 1, MotoGP and many Nascar events. “We put a lot of money into motorsport globally, especially the Ferrari relationship. That is where you get cutting edge engine and transmission technology,. It is treated like a test lab, even though we have our R&D centres. We have a tie-up with Ferrari; our team goes around the world with Ferrari and works with them in terms of development of some specific products for fuels and lubricants. Oil also gives you an indication of what is happening in the engine and therefore the performance of the car,” explains Anderson. He emphasises that Shell, which has several quality control checks in place, is very particular about the base oils it uses and the processes at its plants are very highly certified.