Rajesh Nambiar, SISM, Lubes at IOCL opens up about the company's latest Servo Futura Plus engine oil and the development and testing of BS-VI ready engine oils.
Q: How many OEMs do you have onboard now?
A: If you specify automotive, let’s say about 20 with whom we’re regularly in touch with, except for a few like Lamborghini and also BMW who make very few cars in India. But Maruti cars, even the latest updates, are running 0W-20, which is a very low viscosity, fuel-economic oil that has been localised with IOCL; we are a major supplier to their plant. Tata Motors, you can say more than 70 percent of initial fill in their plants are with IOCL. Mahindra, all plants fill I can say is IOCL; about eight plants. After-market as well, in the north, west and east, is only IOCL; we sell the maximum there, which is to Mahindra.
Q: Any new plans that you’re looking at for the future?
A: The future is already in the Futura G+, which it is an A5/B5 oil, as per Europe’s ACEA specification. It can work in petrol and diesel engines and provide you additional fuel economy. It is a very robust oil that’s recommended for cars where you’re looking for typically 5W-30 oil’s fuel economy. And today’s cars are all fuel efficient, so they require fuel efficiency and also the endurance level, that means the wear protection to the engine has to be there. Hence, all these standard. Our oils will either be API certified, which is the American Petroleum Institute, or be according to the ACEA, a conglomeration of all the European OEMs like Renault and others. So we have two approaches – an oil that we make market-general, the Futura G+, also has a certain level, but it may or may not be approved by an OEM. Again, we’ve worked separately with each OEM like Maruti, Nissan, Hyundai, Renault, developed oils for them.
Q: The Futura G+ would be tailored for the OEMs?
A: That is tailored, like I can tell you that we have OEMs like Renault, even Nissan, for whom we have done localisation in India. We already have plants all across the country and having a plant in Chennai worked because we could supply to and localise for OEMs like Renault and Nissan, and this is the first time this has happened in India, especially – doing an import substitution.
Q: What are the requirements or efficiency upgrades that a customer can expect with the G+?
A: Straightaway, they’ll gain 2 percent fuel economy over the existing, run of the mill grades that are available in the market; primarily, that’s the basic advantage. It will keep the engine much cleaner than what the other engine oils do, in terms of piston and cam cleanliness; and it can be used for both, diesel and petrol engines, but when it comes to the diesel, the need for Biodiesel compatibility also comes into play. This particular oil will work with those engines that run on Biodiesel as well, so that’s the key USP of the Futura G+
We have also launched API SN oils and they are actually compatible with ethanol up to E85, which means 85 percent of ethanol. This is specially countries like Brazil who are very big users of ethanol; in India, we hardly go up to 10 percent and this is also because of government legislations. With Biodiesel too, our R&D is ready, and our products are ready to be compatible. But there are certain issues with Biodiesel – firstly, the availability, then the economics and there are also issues of Biodiesel stability. So we cannot go beyond B10-B20, as it’s not acceptable to many OEMs. So we have V100; we have had trials with the railways for, let’s say a Shatabdi or these types of trains. Our R&D is ready, our products are there but because of many issues of availability and commercialisation, obviously – if Biodiesel costs much more than diesel – it doesn’t become feasible for the company. But many things will happen and we are moving into non-conventional energy in a big way. Like in our company also, we’re into wind and solar energy; IOCL has wind farms. So these are new areas where we’re going after sustainable development.
Q: Are the upcoming new BS-VI norms a challenge? How are you going about it?
A: Our refineries are gearing up and I think the deadline is April 20,2020, for BS-VI to be implemented across the country. OEMs are already working on it and we’re ready with the lubes as well; like we already have a CK4 oil ready.
We have a grade called SERVO Pro-oil Next series, then we have 10W-30 and also 10W-40, which is very new to the country; it’s specifically tailor-made for Indian conditions, so that’s one thing as far as the HDEO (heavy diesel engine oil) is concerned. If you look at passenger car motor oil, we have the Servo Futura Next. So we have that with us right now, and apart from that we also have an AK SN+ grade, which is future ready and can be used post BS-VI implementation.
Q: But you will have to have a bit of an overhaul in the current products to meet BS-VI, right?
A: We have already formulated lubricants that are ready. We are not supplying it per say, but we have it in our kitty, we are ready. We can roll out any time.
We have a state of the art R&D facility in Faridabad and it’s a very big facility, probably the largest in Asia. So all the localisation is done here and when we work closely with OEMs, our R&D people also get involved. So we, from technical services head office, co-ordinate with them and the customer, so we are the interface. One of our biggest strengths is our R&D, which is the largest in the whole continent.
Q: Do you get BS-VI engines from the manufacturers to test?
A: We do that. In fact, I think with OEMs like Leyland and Tata, we have done a lot of work. We have a climatic chamber in our R&D that can simulate conditions from Leh to Kanyakumari or from Assam, Shillong to Gujarat, enabling us to test in different conditions for temperature, pressure, humidity, wind speeds and emissions. So we have OEMs tying up with our R&D. Even our R&D is a novel agency from the Government of India for research on hythane (a mix of hydrogen and CNG), which is a future fuel. Hydrogen is projected as a future fuel option, the only thing is that availability, cost and safety factor are an issue, otherwise it is probably the best fuel that will come probably 10 years down the line. We already have petrol pumps dispensing hythane in South Delhi and our R&D has busses running there, monitoring them.
Q: Regarding the BS-VI oils that you have, would a normal BS-IV customer also be able to use them?
A: Yes, they will be backward compatible.
Q: Will they also see an improvement in performance?
A: Yes. Whenever we come with new fuels and lubricants, the idea of designing them is not exactly to give you the benefits specifically, or to the user, it is more to do with complying with the emissions norms. We have a lot of post-treatment devices like the diesel particulate filter (DPR) and selective catalytic reduction (SCR). Now, for SCR to work, it requires urea solution like AdBlue. So we are also venturing into those new areas where the OEM makes the SCR vehicle, say to comply to BS-IV earlier, but when you have a BS-VI you need to have at least an SCR and a DPF, something extra. BS-IV could be achieved just by EGR (Exhaust Gas Recirculation), which was a very inefficient way of doing things because you’re actually lessening the power to reduce emissions; many OEMs were also doing that. Now you have SCR and DPF coming in, so the oil that is there has to be low SAPS – sulphated ash, phosphorus and sulphur – which is again the USP of the oil, in that it has to be low SAPS to be compatible with these after treatments. So, it is more to do with complying with the emissions norms, preventing the NOX going into the atmosphere, reducing that. Apart from the engine, you’re required to maintain your exhaust emissions and the lube oil has to comply with that.
To answer your question on whether I’m going to use a future-ready oil in a current scenario, and will it give a benefit or not, you cannot say, because that particular technology brought in to the lubricant is to address that particular environmental need. It might give a better economy, it might give better endurance, but then that is independent…
Q: But won’t it harm the engine as such? Can it be used?
A: Absolutely, it can be used.
Q: Could you give us a sense of the market right now – the market share that you have and the overall lubricant market and where do you see it headed maybe in the next three or four years?
A: Market share, I can’t tell you the exact figure, but roughly, I can say around 30 percent of the market will be IOCL, that’s a big market.
Q: Is that at the top?
A: Yes, it’s the highest market share. Any survey you see, you have more than 100 active players which are there. So it is challenge that we have accepted and done it, being a public sector company, and we have been able to maintain that since 1993 when this market had opened up. Unlike diesel and LPG, lube has been open since 1993, so we have been competing since 1993 in lubes. So import substitution is one USP of our R&D, and our technical services that we have been doing and still are today – a lot of OEMs are looking for that. One OEM gets influenced by the other; say a German OEM sees that the approval that they have got and are getting benefits, so why not go for localisation? Otherwise, it’s not easy for us to enter a company, like say Ford or something, because they have their own set of systems that are designed in US and Europe which they try to replicate in India, but we always say that our R&D centre, when they develop an oil, they are tailor-making it for Indian conditions. I can give an example – an engine oil designed in Germany will have a pour point of -40 because that’s the German conditions. In India, you don’t have temperatures going down like that; it’s only in Leh and Ladakh that you come below -20. So what is the need of putting the extra pour point depression additive in that oil? So our oil will be designed for Indian conditions. But, again, if you talk about viscosity improver, that has to be high for a higher performance, which we achieve using additives, like any other multinational company.
If you look at the driving conditions elsewhere in the world and in the country, the load on the oil is much higher in India, so that has to be taken into consideration.
Q: Are there any plans for getting into the export market?
A: We are already there. We are, I think, exporting to more than 27 countries. We’ve already planned in Sri Lanka, we have some blending arrangement with Dubai, we supply to the Gulf GCC countries – Oman, Kuwait, Qatar, Bahrain – we have now put a distributor in Saudi Arabia, we are working for Indonesia and Thailand, and in Bangladesh, already I’ve been there last month, we have a distributor. We have Nepal. We also have some consignments going to, say South Africa; I’m talking about the lubes.
Q: The oils you make, like the Futura G+, can those be used on the cars sold commercially?
A: Whatever oil is approved in India, we’re trying to see whether we can export them to Bangladesh and Sri Lanka, because the cars are the same. In Bangladesh, there are Mahindra dealerships, and even those of Tata. I personally visited them and asked “why not take it from India?” Bajaj is the highest selling bike in Bangladesh, which is number three or two in India; there, they are number one. In those countries, they change the oil faster than in India – the consumption is high.