Sah Petro plans automobile lubricants foray in two years

Mumbai-based specialty industrial lubricants company Sah Petroleum plans to enter the automobile lubricants industry in the next two years.

The company's products, which are marketed under the brandname IPOL, cater to clients such as Goodyear, Ceat, Tata Motors, Bridgestone and Eicher.

"We are the producer of a wide range of specialty industrial lubricants, rubber processing oils and grease. We will be entering the automobile lubricants industry in the next two years after the infrastructure, marketing and distribution system are in place," said Rajendra Sah, chairman, Sah Petroleum.

The Indian lubricants market is the fourth largest in the world with an estimated consumption of more than 1.4 million tonne and a turnover of over Rs 7,000 crore.

The company has two manufacturing units at Vasai and Daman with a combined capacity of over 40,000 tonne per annum.

It is planning to double its capacity to over 80,000 tonne per annum by raising funds through an initial public offering (IPO) of Rs 31.78 crore, of which Rs 28 crore will be spend upon the capacity expansion of these two units. The IPO of 90,80,000 equity shares of Rs five each at a premium of Rs 30 per share will open on August 30.

The company is also planning to set up branches in India and abroad.

"The key factors for this segment are a strong research and development base and a fully developed and comprehensive range of lubricants. The company will constantly introduce new products," said Sah.

Apart from entering the automobile lubricants segments, the company would continue to focus on its current segments of business.

For the financial year ended March 31, 2004, the company has recorded a profit after tax of Rs 8.05 crore, up by 228 per cent from Rs 2.45 crore last year.

The company's turnover increased to Rs 72.40 crore, up 32 per cent from Rs 54.89 crore last year. The shares of the company will be listed on the National Stock Exchange and the Bombay Stock Exchange.