Lubes

FUEL REFINERY PROCESS

LPG LAN
ATMOSPHERIC TOWER

HAN SKO LVGO HVGO

CRUDE OIL

REDUCED CRUDE OIL TO LUBE REFINERY

LUBE REFINING
75 SS/ SPINDLE

VACUUM TOWER

R C O

1300 SS
BRIGHT STOCK

NMP EXTR ACTI ON

DEWA XING UNIT

150 SS 500 SS

HYDROFINER

75 SM 150 N 500 N 1300 N 150 BS

PROPANE D EASPHALTING

RPO (AROMATIC EXTRACTS)

WAX

BITUMEN

BASE OIL TERMINOLOGY

LUBES ARE HIGH VALUE PRODUCTS WITH BROAD VARIETY OF USES Automotive: Engine oils, Automatic Transmission Fluids (ATF) Industrial: Turbine oils, Hydraulic oils, Industrial Gear oils, Compressor oils, Refrigeration oils, Machine oils, Electrical oils, Drilling Fluids etc Medicinal: Food Grade oils, White oils,..

REFINERIES PRODUCE BASE OILS OR BASE STOCKS Finished Products are Blends of Base stock with(out) Additives BASE STOCKS ARE CALLED BY VARIOUS NAMES: Neutrals (100N, 150N, 600N,...) Bright Stocks Grades (SAE 5, 10, 30, ..; ISO 22, 32,...) MOST COMMON LUBE NAME IS NEUTRAL Number is the Viscosity @ 40 or 100oC BRIGHT STOCK IS HEAVY LUBE PRODUCED FROM RESIDUE Name Refers to Appearance and Typical Viscosity is 2,500 SSU @ 100oF GRADE NAMES MAY REFER TO VISCOSITY OR TO TRADEMARKS

BASESTOCK PROPERTIES AND DEFINITIONS

BASE STOCK COMPOSITION DETERMINES PERFORMANCE OF FINISHED PRODUCTS
Viscosity Index or VI
Higher VI improves Volatility, Fuel Economy, and Operating Range Higher Saturates improves Oxidation Stability and Soot Handling Lower Wax Improves Operating Range Lower Wax improves Low Temperature Performance
Pour Point Cloud Point

Saturate Content Wax Content

AMERICAN PETROLEUM INSTITUTE (API) BASESTOCK CATEGORIES

API Group Sats Sulfur VI TYPICAL MFG PROCESS I <90% >0.03% 80-119 Solvent Processing II >90% <0.03% 80-119 HYDROPROCESSING III >90% <0.03% 120+ WAX ISOME, H/C, GTL IV N.A. N.A POLYALPHAOLEFINS (PAO) V ALL OTHER BASE STOCKS

KEY LUBE OIL PROPERTIES

VISCOSITY (MEASURE OF FLUIDITY) Range from ~ 4 to 20 cSt @ 100oC for Neutrals up to 32 cSt for Bright Stock Brookfield Measures Low Temperature Fluidity on Finished Oils @ -40oC VISCOSITY INDEX (INVERSE MEASURE OF CHANGE OF VISCOSITY WITH TEMPERATURE) Ranges from ~85 to ~105 for most Base stocks, Higher for Speciality Grades (ex: Exxsyn ~140, PAO ~150, XHVI~140+, Ultra S ~ 125) POUR POINT (TEMPERATURE AT WHICH FLUID BECOMES NEARLY SOLID) Typically from -9 to -24oC Cloud Point is Temperature at Which Wax Crystals Appear VOLATILITY (MEASURE OF OIL LOSS DUE TO EVAPORATION) Noack Volatility Measures Actual Evaporation (Typically 20-35 wt%) GCD Volatility Measures Front End of Boiling Curve (e.g 10% @375oC) COLOR (APPEARANCE) AND STABILITY (MEASURE OF COLOR CHANGE IN LIGHT) CONRADSON Carbon (MEASURE OF CARBON RESIDUE LEFT ON IGNITION) SATURATES, AROMATICS and ASPHALTENE CONTENTS

CLASSIFICATION OF LUBRICANTS
GENERAL CATEGORIES SPECIFIC APPLICATIONS PHYSICAL SPECIFICATIONS STANDARD SPECIFICATIONS PERFORMANCE REQUIREMENTS USERs SPECIFICATIONS TYPE OF BASE OIL

INDIAN LUBE REFINING CAPACITY

TMTPA

HPCL, Mumbai IOC,Haldia CPCL, Chennai BPC, Mumbai TOTAL

- 330 - 200 - 240 - 180 - 950

LUBE MANUFACTURING
Additives
Function Lube Refinery Blending Plants

Lubricants

Base Oils

Viscosity Index Pour Point Flash Point Key Properties

Improved Improved No change

C U S T O M E R S

Oxidation Stability Special Properties

BLENDING CAPACITIES
BLENDING PLANT MAZAGAON SILVASSA B BUDGE / RAMANAGAR CHENNAI SEWREE TOTAL CAPACITY (TMTPA) 180 60 30 30 10 310

GENERAL CATEGORIES
AUTOMOTIVE LUBRICANTS ENGINE OILS TRANSMISSION OILS INDUSTRIAL LUBRICANTS GREASES SPECIALTIES CUTTING FLUIDS METAL ROLLING OILS RUBBER PROCESS OILS RUST PREVENTIVES HEAT TRANFER FLUIDS METAL DRAWING COMPOUNDS QUENCHING OILS etc TURBINE OILS WHEEL BEARING HYDRAULIC OILS CHASSIS COMPRESSOR OILSINDUSTRIAL REFRIGERATION OILS SPINDLE OILS CYLINDER OILS GEAR OILS TEXTILE OILS etc

FUNCTIONS OF ENGINE OILS

o PERMIT EASIER STARTING o o o o o o o LUBRICATE AND PREVENT WEAR REDUCE FRICTION PROTECT AGAINST RUST AND CORROSION KEEP ENGINE INTERIORS CLEAN COOL ENGINE PARTS SEAL COMBUSTION PRODUCTS BE NON-FOAMING

GREASES COMPOSITION
BASE OIL MINERAL SYNTHETIC VEGETABLE TACKINESS AGENT + THICKENER + SOAP NON-SOAP ADDITIVES ANTI-OXIDANT ANTI-CORROSION EP/ANTI-WEAR SOLID FILLER

WHY USE A GREASE?

A GREASE OFFERS UNIQUE CHARACTERISTICS WHICH MAKES IT PARTICULARLY USEFUL IN MACHINE ELEMENTS STAY WHERE IT IS PUT ALLOWS UNATTENDED SERVICE FOR LONG PERIODS (SEALED FOR LIFE) REQUIRES LESS FREQUENT APPLICATION FOR AREAS OF POOR ACCESSIBILITY SEALS OUT CONTAMINANTS OPERATE OVER A WIDE TEMPERATURE RANGE SOLID ADDITIVES CAN BE USED WITHOUT CONCERN OF SETTLING OUT LOW LEAKAGE MEANS THEY ARE EFFECTIVE IN WARM EQUIPMENT

NLGI CLASSIFICATION OF GREASES

NATIONAL LUBRICRATING GREASE INSTITUTE NLGI NO. @ 25OC* 1 2 3 4 5 6 ASTM PENETRATION 310-340 265-295 220-250 175-205 130-260 85-115

* After working 60 strokes.

MAJOR INDUSTRIAL GRADES

ENKLOS TURBINOLS PARTHANS SEETUL SPINTEK KOOLKUTS RUSTOPS HYTHERMS ELASTOS METAQUENCH

MARKET SHARE (PSUs)

(2005-06)
MARKET LEADER IN GROWTH : 35.1% AGAINST INDUSTRY GROWTH OF 12.7% CURR (TMT) HIST (TMT) % VAR % MARKT SHARE (CURR) % MARKT SHARE (HIST)

CO.

HPC BPC IOC IND

291.8 113.7 454.2 877.6

216.0 115.4 421.0 778.8

35.1 (1.5) 7.9 12.7

33.3 12.9 51.8 100.00

27.7 14.8 54.1 100.00

HPC Figures exclude base oil sales to BPC / IOC

SECTORIAL CONTRIBUTION
LUBES MARKET 1250 TMTPA AUTOMOTIVE 800 TMT INDUSTRIAL 450 TMT Growing

RET OUTLET 170 TMT

BAZAAR 580 TMT

DIRECT 500 TMT

2S 2/3W 150 TMT

CAR 30 TMT

4S 2W 45 TMT

D E OILS 350 TMT

GEAR OIL 100 TMT

OTHERS 75 TMT

CORE SECTORS
Sector Percentage Auto OEM - 7 Cement - 3 Power - 4 STU -8 Rubber -9 Colliery -4 Defence - 4 Railways -10 Metals - 10 Others -41

LUBE MARKET : MARKETING CHANNELS

RETAIL OUTLETS AUTOMOTIVE OILS AND GREASES RESELLERS/JOBBERS AUTOMOTIVE OILS AND GREASES C&F AGENTS FOR SMALL AND MEDIUM INDUSTRIES LUBE DISTRIBUTORS FOR BAZAAR TRADE DIRECT SALES TO CONSUMERS

DEVELOPMENT OF NEW CHANNEL BAZAAR : LUBE DISTRIBUTORS

BAZAAR : 40% VOLUMES : CASTROL AND OTHER PLAYERS PSUs TOO STARTED DEVP. BAZAAR REMAINED UNCATERED NEED FOR EXCLUSIVE LUBE DISTRIBUTOR CHANNEL SHIFT IN BUYING HABITS OF CUSTOMERS : NEW GENERATION VEHICLES : MECHANICS ACTING AS INFLUENCERS CHANNEL PICKED UP 25,000 KL WITHIN THREE

LUBE DISTRIBUTOR
EXCLUSIVELY CATERING TO LUBE SHOPS, GARAGES, AUTHO. SERVICE CENTRES INFRASTRUCTURE : DELIVERY VEHICLE, STAFF, SHOWROOM / OFFICE AND GODOWN COMPUTER FMCG TYPE OF MARKETING : POPs, INVENTORIES, ORDER TAKING, SUPPLIES AND CREDIT / COLLECTIONS

DIRECT SALES - LUBES

OEMs, CORE SECTOR ( STEEL. COAL, POWER, CEMENT, SUGAR ETC.,), RAILWAYS, DEFENCE ETC., MOSTLY TENDER BASED EXCEPT LOCALISED SMALL REQUIREMENTS SALES SUPPORTED BY TECHNICAL SERVICES CES, PES, CONDITION MONITORING, TRAILS, ENERGY AUDITS ETC., PRICE HEDGING SUPPORT TO CUSTOMER THROUGH FIXED PRICE : INVENORY MANAGEMENT : COST SAVINGS

LUBE NETWORK RETAIL AND DIRECT

RETAIL OUTLETS : 5,000 PLUS : DIRECTLY CATERING TO END USER / CUSTOMERS AND MECHANICS LUBE DISTRIBUTORS : 150 PLUS : HAVING A BASE OF 80-100 BAZAAR SHOPS PER DTOR WHO IN TURN SERVICE THE END USERS / MECHANICS LUBE CFAs, COLD, COD AND LUBE AND OTHER DEPOTS

RETAIL LUBES MARKETING

Packaging Lube Incentive Schemes Advertising and Product Promotion Campaigns Launching of new Brands Genuine oil tie-ups Network Development Micro Marketing Mechanic Contact Program

ENVIRONMENT
Long-term growth estimated at 3-4% p.a. More than 25 players of repute in the Market Over 500 small local blenders