Tide Water Oil hikes prices; expands market
India’s 84-year old automotive lubricant manufacturer, Tide Water Oil, has been doing business in the country since the days of the British Raj and has managed to thrive; but with the weakening of the rupee, the company now finds itself fighting for survival.
“We faced losses due to high base oil prices and forex losses. Even the manufacturing sector has slowed down, and that is affecting our business,” said Kallol Dutta, chairman and managing director of Tide Water Oil.
The company became a Rs 1,000 crore (US$178.8 million) company in 2012, aided by a 17% growth in revenues. Tide Water Oil, which sells lubricants under the Veedol brand, said that it tried to hold back when other lubricants companies hiked prices, but the sluggish economy has forced it to implement a Rs 12-14 (US$0.21-0.25) per liter price increase on all of its products.
Dutta said the company had not passed on the increase in the price of base oil, “but this time we will go in for a price hike.” To further buffer the effects of the weakening rupee, Tide Water Oil, which recently acquired global rights for the Veedol brand, is expanding into the international market.
“We have already set up a subsidiary in Dubai and we are also looking at spreading business in SA, Mexico, Germany,” Dutta said. Talks for a joint venture with Japan’s top oil refiner, JX Nippon are ongoing and an agreement is expected to be finalized soon. (June 7, 2012)