Total Fina Elf, the French oil giant, has initiated the merger process of its two unlisted lubricant subsidiaries in India -- Elf Lubricants India and Total Lubricants India.
The merger of the two lube companies follows the global merger of Total Fina with Elf a few months ago, thereby creating an integrated oil behemoth with revenues of $105 billion last year.
The merger will be limited to Elf's lubricant arms only and will not include its other businesses in India. Elf has a presence in the domestic liquid petroleum gas (LPG) marketing business in Bangalore through Elf Gas India.
Also, Total Gas & Power India, a wholly owned subsidiary of Total Fina, has a 50:50 joint venture with Hindustan Petroleum Corporation to construct a 60,000 tonne underground storage cavern for LPG at Vizag, Andhra Pradesh.
Nicholas J Wellman, managing director and chief executive officer of Elf Lubricants India, said, "The merger process of the lubricant arms of Elf and Total is currently on and is expected to be completed within six months, if not earlier. The merger does not include the other businesses of Total Fina Elf in India."
Wellman denied that a holding company was being considered for the other businesses of Total Fina Elf in India.
"Even after completion of merger of our two lube arms, both Total and Elf will continue to remain as separate brands. Our front-end operations, at the field level, will remain separate. Only our back-end operations will be merged," Wellman added.
Elf Lubricants, which has a larger presence in the automotive sector of the domestic lubes market than in the industrial segment, currently has a 3.5 per cent marketshare. With an annual turnover exceeding Rs 140 crore last year, it has 230 people on rolls and has a 30,000 tonne lube blending plant at Mahape, Navi Mumbai.
The company, which is the exclusive supplier of lubricants to General Motors India and Volvo India, in addition to Mahindra & Mahindra's tractors, targets a five per cent share in the domestic lube market in five years.
