Pakistan one of top 3 in Chevron’s portfolio

Published: January 28, 2016
SHARES
Email
Company official says Rs2 billion to be injected into country’s business. PHOTO: AL-ATAA MAGAZINE

Company official says Rs2 billion to be injected into country’s business. PHOTO: AL-ATAA MAGAZINE

Company official says Rs2 billion to be injected into country’s business. PHOTO: AL-ATAA MAGAZINE Company official says Rs2 billion to be injected into country’s business. PHOTO: FILE
KARACHI: 

Pakistan is one of the top three markets in Chevron’s worldwide lubricants portfolio based on its high profit margins, a company official said on Wednesday.

Addressing a press conference, Chevron Pakistan Lubricants Chairman Muhammad Najam Shamsuddin said the company will make an equity investment of over Rs2 billion from 2016 to 2018 to upgrade its infrastructure in the country.

Book building: Hi-Tech Lubricants raises Rs1.35 billion

Chevron Pakistan Lubricants is an indirect subsidiary of Chevron Corporation, which is the world’s fourth largest integrated energy company.

The equity investment will be used in upgrading and expanding its lubricants blending plant in the West Wharf area of Karachi as well as other facilities across Pakistan.

“Some people thought Chevron would exit the lubricants industry once it divested its fuel business. Chevron isn’t going anywhere. We are scaling up our investments instead,” Shamsuddin said.

US-based Chevron exited its fuel retail and storage business in Pakistan recently by selling it to Total Parco Pakistan.

Chevron Pakistan Lubricants trades under the Caltex brand in Pakistan and markets its lubricants products in the country under the Havoline and Delo brands.

IPO: Hi-Tech Lubricants to offer 7.25m shares to public

It is one of the major players in Pakistan’s lubricants industry and controls a share of roughly 24%, according to Shamsuddin. Other major players include Shell, ZIC, Total and PSO.

The company will use the new investment to increase its production by over 36% — i.e. from current 55 million litres per annum to 75 million litres per annum. “We see high growth prospects in Pakistan,” he added.

Lubricants are made by mixing additives with base oil. While some companies import base oil, others buy it from local refineries. Additives, on the other hand, are always imported. Some companies import lubricants in the finished form while others operate their own plants to manufacture lubricants locally, including Chevron Pakistan Lubricants.

The company established a chain of 65 oil change facilities across Pakistan during the last 18 months as it no longer operates petrol pumps of its own. “We plan to have up to 150 such facilities by the end of 2017,” he said.

Although he refused to divulge the company’s financials citing its status of a privately held entity, Shamsuddin said last year’s gross profit was Rs3 billion.

This Pakistani bootstrapped his company all the way to IPO

Another major player in the lubricants market – Hi-Tech Lubricants that produces ZIC – is in the process of the initial public offering (IPO). Its gross profit for the last fiscal year amounted to Rs1.3 billion, which is less than half of the gross profit posted by Chevron Pakistan Lubricants.

“We don’t plan to go for an IPO right now,” he noted.

Published in The Express Tribune, January 28th,  2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (9)

  • Aziz
    Jan 28, 2016 - 10:49AM

    Things we take pride in these days!Recommend

  • Factnotfiction
    Jan 28, 2016 - 11:19AM

    @aziz, they’re not talking about personal lubricants…

    These types of lubricants are heavily used in industry.Recommend

  • sgrr
    Jan 28, 2016 - 12:47PM

    They are churning money from the common people. Crude prices crashed from $150 to $30, but no reduction in lubricants’ prices. Great Business and Great Watchdog.Recommend

  • Parvez
    Jan 28, 2016 - 1:11PM

    Could this be because the government refuses to place any price controls on this commodity.Recommend

  • Adeel
    Jan 28, 2016 - 1:11PM

    Surprised to not see any Russian player. Can Putin see this? Pakistan awaits for him!!Recommend

  • Burhan
    Jan 28, 2016 - 3:54PM

    Thanks to CPEC, as more Chinese workers come to pak, pakistan would be No 1. Hope they make it in fruit flavors as well. Recommend

  • buba
    Jan 28, 2016 - 10:32PM

    Good example of Free Market at work – no govt involvement – no kickbacks – no “no bid” arrangements – just investment by private enterprise.Recommend

  • Md. Tahir Shah
    Jan 29, 2016 - 12:57AM

    Hopefully, the upgrades will resolve quality issues with Chevron lubricants.Recommend

  • Pakistani
    Jan 29, 2016 - 4:12PM

    @Factnotfiction:
    Industry location is out of Pakistan?????????????????Recommend

More in Business