The long game in Indian automotive chemicals has rarely looked as calculated as the trajectory traced by LANXESS over the last two decades. Since carving out its identity 21 years ago, the company has undergone a fundamental transformation, evolving from a high-volume chemical and polymer entity into a resilient specialty chemicals powerhouse.

For the Indian automotive sector, this evolution mirrors the industry's own transition from basic assembly to high-value engineering. Over the past ten years alone, LANXESS has funneled approximately Rs 750 crore into its Indian footprint, establishing a stable anchor in a region that has experienced the most significant momentum in its global history. It indicates a strategic shift away from cyclical, large-volume supply-demand businesses toward medium-sized specialty markets, where technical differentiation and deep customer relationships serve as the primary currencies.

Expansion at Jhagadia

As part of its next phase of growth, the company announced an expansion at its Jhagadia site in Gujarat to roll out industrial lubricant additives, specifically hydraulic and gear oil packages. Currently, the facility functions as a sophisticated blending hub, integrating key molecules from the company’s global production network, but the strategic roadmap points toward localized, chemistry-intensive manufacturing.

"What we are starting off production here in Jhagadia at the moment is for these specialty industrial additives... hydraulic oil packages, gear oil packages, and stuff like that... and that is the first phase," noted Neelanjan Banerjee, senior vice president and Global Business Unit Head of Lubricant Additives at LANXESS. "For the moment, we start off with blending... but we have the entire value chain, from the chemistry to the blending, all covered within our portfolio. And you will hear more about our plans shortly. We want our competitors to be a little bit sleepy and be caught by surprise."

"To be competitive in India and to stay closer to our customers, we thought this investment is a really good one," Banerjee added. While the company did not provide a specific breakup of the investments required to establish the new blending plant at Jhagadia, the implications for the supply chain are clear. For Tier-1 suppliers and OEMs, this shift matters because it brings the "entire value chain" closer to the point of consumption, ensuring that high-tech products—such as brake fluids for high-speed rail or specialized additives—are not just available, but tailored to local requirements.

Market Dynamics and Financial Performance

LANXESS’s lubricant-related business in India resides within its Lubricant Additives unit, featuring a portfolio that includes synthetic base oils, lubricant additives, additive packages, and formulated lubricants for automotive and industrial applications. In the additives layer, LANXESS competes with specialty chemical peers such as BASF, Chevron, Croda, and Evonik, and globally within formulation ecosystems against ExxonMobil, Shell, and TotalEnergies. A narrower estimate for the India lubricant additives market puts it at $794.1 million in 2025, rising to $1.21 billion by 2033.

Dr. Hubert Fink, Member of the Board of Management of LANXESS AG, recently visited India to oversee these developments. "Within Asia Pacific, for sure, India has seen the biggest momentum in the history of our company," Fink remarked. "I think that also underlines the importance of India within our group, that more or less every year a board member is coming and, of course, aligning strategies, meeting our organisation... and even more important, of course for us, our important customer base here in India."

The company's Indian operations have seen significant growth. During the fiscal year ending March 2025, revenue reached Rs 3,095.5 crore, up from Rs 1,963.6 crore in FY21. Net profit also increased to Rs 135.9 crore during FY25, compared to Rs 104.5 crore in FY21, according to data available with the Ministry of Corporate Affairs, sourced through Tofler.

A Structural Shift

The creation of the IMEA (India, Middle East, Africa) region marks the moment India stepped out of Europe’s shadow within the LANXESS hierarchy. Previously managed as a satellite of European operations, India is now a standalone strategic pillar designed to provide "laser-sharp focus" and high-level board oversight.

This structural realignment reflects a stark global reality: while legacy markets in Europe face challenges from rising energy costs and regulatory shifts, India has emerged as a high-growth "stable area" capable of providing security of supply. Positioned as the third-largest lubricant market globally, India is no longer viewed as a low-cost backup, but as a primary growth engine that is actively outperforming older targets in sustainability and production efficiency.

This dedicated regional focus allows LANXESS to more effectively bring its latest high-tech products—including specialized additives, synthetic base stocks, and high-performance grease—directly to the local market. This includes establishing local infrastructure, such as the recently inaugurated India Application Development Centre, to provide customers with technical expertise.

Partnering with Energy Giants

This growth is being codified through a series of high-stakes partnerships, most notably a new MoU with IndianOil covering more than ten distinct areas of collaboration. The strategic intent is clear: by aligning with state-owned enterprises (PSUs) like IndianOil, HPCL, or BPCL, which collectively control 45% of the Indian lubricant market, LANXESS is unlocking a segment that was previously difficult to penetrate without robust "Make in India" credentials.

The framework includes co-branding, technology transfers in metalworking fluids and refrigeration lubricants, with plans to pursue similar formal agreements with other oil marketing companies shortly. This multi-year roadmap ensures LANXESS is not just a vendor to the private sector but a foundational partner to the state-backed energy giants fueling India's transit infrastructure.

"The products that we will manufacture here in India are part of the 'Make in India' initiative, and because of that, we would otherwise exclude ourselves from participating with the three large state-owned oil companies, which actually control 45% of the market in India," Banerjee continued.

The lubricant additives business of LANXESS was formed following the $2.5 billion Chemtura acquisition in 2017. The division currently operates across a dozen production sites in eight countries, maintaining a footprint on all continents as one of the top three lubricant additive players globally. In India, LANXESS has also initiated third-party manufacturing activities for the Lubricant Additives business unit.

The EV Transition

As the automotive sector navigates a tectonic shift in technology, LANXESS is repositioning its portfolio to match the transition from internal combustion engines to EV and hybrid mobility. The company is moving beyond traditional engine oil antioxidants to specialized materials like Reotherm for EV battery immersion cooling and Bayferrox iron oxide precursors for LFP cathodes.

For the lightweighting agenda, its bonding agents and stabilizers are becoming essential for durable high-voltage components and reinforced plastics. Within the tire segment, the Rhein Chemie business continues to innovate with accelerators and antioxidants for high-performance rubber. This ensures that as vehicles become heavier and quieter due to electrification, LANXESS materials keep pace. This alignment with "new mobility" ensures the company remains relevant regardless of which propulsion technology prevails, company officials added.

Way Ahead

Looking ahead, leadership stated that the new expansion announcement at Jhagadia is merely the beginning, with more announcements in the offing. India's automotive industry will certainly be watching closely.