Lanka IOC’s Rs 400 mn grease manufacturing plant to open in May | Daily News

Lanka IOC’s Rs 400 mn grease manufacturing plant to open in May

Managing Director, Manoj Gupta
Managing Director, Manoj Gupta

Lanka IOC PLC will invest Rs. 400 million to build a grease manufacturing plant, in Trincomalee. Over Rs. 300 million has been invested for the project so far and the opening scheduled for early this year was delayed due to logistical issues resulting from the COVID Pandemic.

“However now we are confident that the plan which is a first to Sri Lanka can be opened by the end of May 2021,” said Managing Director LIOC, Manoj Gupta. He said that they will also start bunking facilities though a floating barge in Hambantota soon. The LIOC Grease plant will have a capacity of 3,000 MT per annum. “This grease plant, adjacent to our existing lube blending plant is in the final stages of installation and we are confident to deliver the first batch of locally manufactured world-class grease by 1st quarter of 2021.”

The grease market is a complex amalgam of commercial and passenger vehicles, 2 and 3 wheelers, agricultural equipment, stationary engines, marine and industries that range from steel, cement, power, mining, railroads, textiles, automobiles and glass. This new plant will not only generate additional employment but would help save valuable forex for the country as the country imports around USD 7 million worth of Grease annually. “In time we hope to reverse this pattern and bring Forex to Sri Lanka by exporting Grease.’He said that they will also start bunking facilities though a floating barge in Hambantota soon.

He also thanked the government for providing them tax reliefs to cushion out the escalating global oil prices. “A few months back crude was trading at US$ 50 per barrel and today it’s hovering at US$ 70 and this itself speaks to the volatility in the market.” The Pandemic situation has put a lot of stress on the lube oil industry, with no availability of adequate base oil, prices of base oil are soaring. Steel prices have gone through the roof and Rs depreciation against USD is adding fuel to the fire. Certainly, there is huge pressure on margins. “We expect prices would stabilize by 3Q.” “New Minister Udaya Gammanpila has also brought in a new dimension to the industry not only giving a patient hearing to our issues but also promptly providing solutions to them.

These have helped us to keep the local fuel prices stable.”We find a lot of proactive interactions with the lubes industry and there is a very positive outlook after the Public Utility Commission of Sri Lanka (PUCSL) new Chairman Janaka Ratnayake took over. “LIOC has volunteered to offer it’s modern, ISO-certified Trinco Fuel and Lube Lab for testing to PUCSL.”Gupta also said that they would invest over Rs. 75 million for solarising 208 fuel stations owned by the LIOC.