Caltex makes headway in Bangladesh, Maldives

Shirajiv Sirimane

Bangladesh and the Maldives operations of Caltex Lubricants Lanka Limited have shown a sharp increase last year.

While the Sri Lankan lubricant market for Caltex showed a 10 percent decline last year the Bangladesh market showed a 40 per cent volume growth and Maldives a 20 per cent growth.

Managing Director, Caltex, Kishu Gomes told Daily News Business that the difficult time the country went through last year was the main reason for the decline in the Sri Lankan lubricant market for Caltex. “However, with signs of permanent peace on the horizon within a few months we expect the local market to pick up in the future,” he said.

Gomes said that though the East was liberated and money was pumped in for development and infrastructure projects, the results of these investments would start to flow from this year. “This would create an additional opportunity for the lubricant market,” he said. The fishing industry will be the key beneficiary from peace, as the fishing area would be extended.

“This too would lead to new opportunities,” he added. With the dawn of peace there would also be more foreign direct investments and that again would lead to new opportunities.

The Sri Lanka lubricant market, which was liberalized in 1998 has 14 players today. Two companies, IOC and Chevron have local manufacturing blending plants. He said that consumers are getting more quality conscious and are enhancing the quality of their products.

Commenting on the Maldives operations, he said that it is a small operation. “However, though our volumes are low in the Maldives their margins were good.

The country is building a second airport, embarked on new housing schemes and has focused on tourism development. The 2020 vision adopted by them is also well accepted. “Due to this the Maldivian economy is strong,” he said.

Gomes said that Caltex launched their operations in Bangladesh in March 2006 and have consolidated their position by bringing in more foreign exchange to Sri Lanka.

In addition Caltex has provided over Rs. 3 billion as taxes to the government. This is over 50 per cent of the company’s profits.

Similar to the Maldives, the Bangladesh government is also focusing on development that has opened new vistas for Caltex especially in the industrial sectors. “We are also looking at new synergies specially in the retail and automotive areas,” he said. Caltex is also looking at exporting more products to India this year.