New Delhi: The Hindustan Petroleum Corporation Ltd (HPCL), a leading oil refiner, is close to finalizing a partner for the marketing of lubricants (lubes) and liquefied petroleum gas (LPG) in Kenya.
Once this deal comes through, HPCL will have a presence in four countries, having already started distributorships in Nepal, Bangladesh and Sri Lanka. The company plans to start operations in Kenya by the first quarter of the next fiscal (2007-08).
“We are getting a local distributor. This partnership will only be for the marketing of lubes and LPG cylinders, and no other petroleum products,” said M.B. Lal, chairman and managing director, HPCL. He, however, revealed neither the partner’s name nor details of the investments involved.
After entering the Kenyan market, HPCL will have to compete with Total Kenya Ltd, which sells lubricants under the brand names Quartz and Rubia, and will also face tough competition from the Caltex Kenya Ltd.
HPCL is looking to corner a tenth of the Kenyan market for petroleum products estimated at 10 million tonnes per annum. Some of the popular lubricants under the HPCL umbrella are HP Racer and HP Cruise. The company has around 40 LPG bottling plants in India, with a total capacity of 1,848 thousand metric tonnes per annum, and sells the cylinders under the brand name HP Gas.
The company has been seeking opportunities to export its surplus of specialty products such as food-grade Hexane, other solvents and its full range of lubricants. HPCL was also exploring an opportunity to enter the Vietnam market but has shelved the plan.
“We have a limited availability of products, and at present our capacity would not have been enough to cater to the Vietnamese market as well,” Lal added.
The company’s overseas strategy is to expand its brand presence either through acquisitions or through partnerships with existing players in Asia and Africa.