Public sector IBP Co and American multinational Caltex Oil Corporation who had a joint venture operating in the country since 1993, have mutually agreed to discontinue with the joint venture in the present form. Caltex will take over the joint venture company.
According to an IBP release, the break up has been attributed to too many new players in the marketing arena as a result of which the industry was facing severe marketing competition and pressure on margins.
The two companies had formed a joint venture to introduce and promote the international brand of Caltex lubricants throughout the country.
"The changed market situation has led to re-alignment of vision of the partners. It is recognised that the basic objectives under which the joint venture was formed are no longer valid under the new market conditions and need not therefore be pursued further under the aegis of this joint venture", the release said.
Under the new arrangement, IBP would concentrate on selling the "IBP Red" lubes and Caltex would concentrate on selling their own branded products.
As part of the realigned arrangement, Caltex branded lubes will continue to be blended at the Budge Budge blending plant in West Bengal and IBP will continue to sell Caltex branded lubes through their retail outlets.
With the new arrangements, both companies are hopeful to improve and consolidate their respective activities in lubes and other aspects of the petroleum sector. Both companies have independently identified strategies to expand their activities in the Indian Petroleum sector and both companies have significant investment plans.
