Chevron Lubricants Lanka plc, Sri Lanka’s leading supplier of automotive and industrial lubricants, after witnessing the industry grow 10-12% year on year (YoY) in volume terms in the fourth quarter (4Q) of last year, has however now seen this growth momentum contracting by nearly 80% to 2-3% YoY this year.
The company’s Managing Director Kishu Gomes told this reporter that growth last year was spurred by the opening up of the North and East after 26 years of war. “With that vacuum saturated, coupled with the floods that hit the Eastern Province in the 1Q of this year that disrupted mechanized economic activity in particular, such as rice milling for which lubricants are needed to run those machines, growth this year to date therefore has settled down to a very placid pace YoY,” he said.
Gomes who said that his company commands over Rs. 10 billion of this Rs. 16 billion industry which guzzles 55 million litres of lubricants annually, saw his company’s top and bottom lines grow in the first half of the year despite volumes stagnating (in part due to the withdrawal of less profitable lubricants from the market), spurred on by upward price revisions. He however said that in contrast exports have been growing in volume terms.
Gomes further said that the reduction in corporate tax from 35% to 28%, coupled with the streamlining of other taxes, had helped their bottom line to grow.
He said that automotive lubricants comprise 75% of the total lubricants consumed, while the rest were taken up by industrial lubricants.