Face-To-Face: Mr. G. Krishnakumar, ED - Lubes, BPCL

Q. How do you envisage the growth of industrial lubricants?

Ans. We are optimistic and despite COVID-19, the industrial lubricant market will grow, at an approximate CAGR of 2.5% between 2021-2026. We are basing this on the demand for industrial lubricants for India's Automotive Mission Plans (AMP).

India is destined to be amongst the top automobile manufacturing hubs in the world and this will also provide an impetus to the manufacturing sector. There is a massive push by the government on infrastructure, mining, and road development, and that too is bound to increase the demand for lubricants. We are also hopeful about the government's plans to set up mega textile parks and food parks, which will definitely add to the demand for various industrial-grade lubricants.

Q. Do you think synthetic lubricants, energy-efficient lubricants and eco-friendly lubricants will penetrate the Indian market?

Ans. Despite having a higher initial cost compared to conventional mineral-based lubricants, synthetic lubricants provide 3-4 times more longevity along with protection for equipment. We have reasons to believe that OEMs are driving the use of synthetic lubricants for benefits such as reduced maintenance costs, improved equipment reliability, safer operations, and suitability for emergent complex systems designs. The long drain synthetic lubricants are also gaining popularity in most of the industrial segments such as wind turbines, cement plants, textile industry, etc., due to the criticality of applications.

Another fascinating trend is the increased demand for energy-conserving lubricants. When energy consumption is optimized, equipment operating costs come down, translating into business profits. A small percentage of reduction in energy consumption can translate into significant annual returns. We find that both OEMs and consumers consider it worth incurring a little extra cost on high-quality energy-efficient lubricants as it balances out the investment vis-a-vis performance.

The demand for eco-friendly industrial lubricants, developed from biodegradable base stocks, is on the increase, as attempts are being made to reduce environmental pollution and minimize contamination of ecosystems due to the spillage or leakage of lubricants. Although bio-based lubricants currently account for a small percentage of the total demand for lubricants, it is estimated that an increase in environmental consciousness among end-users will drive demand in the near future.

Q.How would you rate the importance of sustainability in your company today and what is the sustainability strategy of your company for lubricants?

Ans. The importance of adopting sustainable business practices has become extremely important for corporations in the current milieu. Every lubricants company has to explore a wide variety of opportunities and agendas to sustain their business. Adopting sustainable practices can help an organization become more efficient, improve its brand value and reputation, provide a platform for innovation, achieve better growth, and strengthen stakeholder relations.

As part of our corporate strategy, we, at MAK Lubricants, are constantly improving and exploring systems and practices towards achieving sustainability and emphasizing the importance of contributing to the betterment of the People, Planet, and Proft. Our R&D team plays a vital role in exploring various sustainable energy technologies such as:

• Eco-friendly and biodegradable lubricants, and long drain interval products, to reduce disposal and improve energy efficiency.
• Fuel economy lubricants to lower demand for energy and greenhouse gas emissions, among other things.

Q. Market for Specialty Lubricants and MWF (metalworking fluids) continues to be monopolised by MNCs. Does BPCL have plans to enter this market?

Ans. MFWs and Speciality Lubricants market is constantly evolving, wherein customers expect customized grades and total lubricant management services. MAK Lubricants has positioned itself as a challenger to the monopoly established by various MNC's in these categories. Our R&D team has the capability to develop innovative speciality lubricant products and our technical services team is equipped to provide customer service. Customised speciality lubricants are already being supplied to auto ancillaries, textiles, steel, and sugar sectors. We are totally focused on the sector, and we are working towards marking our presence as market leaders in the category.

Q. Do you think the introduction of EV's is likely to drastically reduce the lube market volume? How is BPCL planning to cover this reduction?

Ans. We believe that ICE (internal combustion engines) will continue to grow for some time. Global indicators suggest an increase in car parc requiring lubricants approximately by 30-40% by 2030. In addition to this, the share of battery-powered electric vehicles (BEVs) in the HDCV segment is at a nascent stage and in future, the penetration of BEVs in this segment will be driven by city buses, last-mile vehicles, and off-road applications.

We find that E-mobility is being considered as the smarter and safer choice, as it also helps meet the future emission targets being introduced globally, and this is a reason for its quick and widespread acceptance. Hybrid vehicles sales shall play a major role in the growth of e-mobility by 2030, in the light-duty vehicle (LDV) segment. As we all know hybrid vehicles use a combination of conventional hardware and electric propulsion mechanism. This means a majority of new LDVs currently, will still contain an ICE, which in most cases will be fuelled by petrol (MS). Also as per our estimates, the share of BEVs may only reach 10% of global LDV sales. OEMs are strategizing on the future of passenger car electrification and their sales projections. As e-mobility steadily becomes mainstream, OEMs are likely to further develop the propulsion systems and adopt hybrid transmission fluids. This future scenario and expected growth in the production volumes makes the formulation of hybrid-specific fluids more commercially attractive.

The requirement for industrial lubricants, which is currently more than 55% of total lubricant consumption in India, will continue to register growth in view of the large-scale industrialization, on efforts being made by the government.

For various types of EVs, we are in the process of introducing e-axle fluid and battery coolant.

Q. How can we leverage digitization in the lubricants value chain? What digital initiatives has BPCL taken to stay ahead in the game?

Ans. Competitive differentiation, now more than ever, emerges from superior digital capabilities and technology endowment, more agile delivery, and a progressively more tech-savvy senior leadership. Te Lubricant industry is no different and there is scope for digitization efforts across the value chain.

It can be for product application, engagement, marketing or supply chain processes. Technology can be deployed for predictive maintenance by way of real-time condition monitoring or creating digital twins. Data can be collected through sensors & software and analysed for effective lubricant consumption on customer premises.

Engagement marketing involves omnichannel enablement, demand sensing and shaping, social media analytics, and intelligent marketing. Connecting customer insights with sales, marketing, and R&D teams, by establishing a communication process, can be critical.

Supply chain management can evolve into being truly digital by making changes in decision making progress through collaborative planning, intelligent procurement, and warehouse management system.

Effective technology implementation will enhance productivity, customer relationship, and channel management. We expect that with the use of technology, employees can focus more time on customers.

At MAK Lubricants, we are in the process of implementing several digital initiatives. With the intention of developing a consolidated platform for various needs of customers, we have engaged Salesforce as a customer relationship management tool.

We have introduced instant gratification as a part of the Hello BPCL App, a single corporate app for BPCL customers across businesses wherein they can get instant credit to their linked bank accounts by scanning coupons, on a select range of MAK lubricants packs.

We are designing a track-and-trace technology through QR code implementation, which will enable us to track the movement of the product at all stages: from production till the end-user. This will allow for better warehouse management. We have introduced Urja Chatbot, an AI-based virtual assistant to address customers' queries on all products of Bharat Petroleum.

The real benefit of any technology implementation can be experienced only when there is a high adoption rate of maximum features across users. Thus, it is vital to make people comfortable with the various digital initiatives.

Q. What was the impact of COVID-19 on lubricants business and what are the supply chain strategies that big organizations like you are implementing to handle such situations?

Ans. The COVID-19 pandemic truly brought with it unprecedented times. It created a sudden stoppage of all industrial activities which created a cascading effect on transportation of raw material/finished goods as well as other suppliers. While the safety of our employees was of prime importance, there was little time available to prepare for this pandemic and the consequent unexpected scenarios. For first few days, it was extremely challenging as we had to ensure raw material supplies and take care of transportation of finished goods right up to our channel partners.

Along with us, our raw material suppliers were also facing challenges in supplying input material to manufacturing plants while additive suppliers had to cut down on production. This coupled with restriction in the movement of workers and declaration of containment zones, made operations quite challenging.

On the demand front, the erratic consumption patterns led to a build-up of inventory at all levels. Many of our suppliers were finding it difficult in terms of maintaining cash flow to keep operations running.

The team spirit of MAK really made it possible to quickly adapt to the “new normal life” post-COVID-19. Prime importance was given to taking care of the health and welfare of employees. With the availability of vaccines, BPCL ensured that all its employees were vaccinated at the earliest to ensure little to no disruption in operations. Standard operating Procedures were introduced on aspects of HSSE giving guidance to our suppliers and customers.

Raw material supplies, production planning and stock management were optimized in order to ensure the least disruption during the imposition of lockdown. Logistics partners were brought in to ensure seamless movement and every plant was encouraged to share their contingency plans, to keep the plant running in case of any disruption in supplies.

Finished goods inventories for sufficient inventory days to cover, was ensured so that there was no dry out of products in the markets. We also utilised the situation to train and build competencies of our employees to facilitate micro team/ staggered working.

Q. How are customer service expectations changing and what are all the value-added services provided by MAK Lubricants to industrial customers?

Ans. Customer expectations are not restricted to quality products now it has expanded much further, and hence we need to be a solution provider to their requirements. Industries and businesses expect customised products, timely supplies, and quick turnaround time.

We have an entire team dedicated to our Industrial customers, comprising Technical Services officers and Quality control professionals. We have deployed mobile quality control labs for on-site lubricant testing. Our value-added services of condition monitoring of lubricants and coolant management are very much appreciated by our customers.

Our team of professionals also impart training to Industries for effective use of lubricants for maximizing performance. Leveraging digital platforms, we have been engaging with our customers through webinars inviting experts from different industries to discuss the intricacies of lubricants application in plants and processes.

Mr G. Krishnakumar, Executive Director - Lubes is an Electrical Engineer from Regional Engineering College (REC), Tiruchirapalli and a Master's Degree holder in Financial Management from Jamnalal Bajaj Institute of Management Studies. Te success quotient in Mr Krishnakumar's stints across Business.

Units and Human Resources figure sizeably in his illustrious career, indubitably, as he is known for his valuable contributions to the pioneering loyalty programmes of BPCL viz., Petro Card and Smart Fleet, his dexterous strategies in building Brand BPCL and for reimagining the Corporate Training Centre BPLC. An avid reader, ardent quizzer, and amicable team player, he has proven records of delivering results in challenging times.

With a masters in Financial Management, an enriched experience of Human Resource Management, leading the competitive Business of MAK Lubricants, Mr Krishnakumar is a textbook definition of multidimensional business leader!