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There's no room for more players in lubricant market



Kishu Gomes, caltex MD
Pix by: Sumanachandra
Ariyawansa

THE Managing Director of Caltex Lubricants Lanka Ltd., Kishu Gomes yesterday said that there is a possibility of the Government reviewing the cabinet proposal to double the license fee for the lubricant marketers.

He told the Daily News that the Minister of Skills Development and State Enterprise Reform, Sripathi Sooriarachchi who met the lubricant industry representatives yesterday agreed to review the proposal.

"The Government might look at a new figure other than the proposed Rs.10 million license fee, Gomes said. However, he said that he did not know that his company, the leading player in the market too has to pay the new license fee.

He also said that it was not practical to invite more players to Sri Lanka's lubricant market which is relatively smaller compared to other countries in the region.

"In India the number of players in the market are about 30. But the size of its market is about 1.2 billion litres. Our market is just 45 million litres and six players are more than enough," Gomes said.

He said that all the six players shared the same view and discussed the matter with the Minister at yesterday's meeting.

Commenting on the allegations by the smaller players that Caltex is enjoying an undue advantage due to a monopolistic situation, Gomes said that his company is operating in a level playing field.

"Our success has been due to correct business and marketing strategies we followed over the last several years. It is true that we enjoyed a monopoly for about four years.

But the others have had enough time to increase their market share by using correct marketing strategies. What we have today is a market which offer equal opportunities for all the players," Gomes said.

He said the company invested effectively on building brands, introduced a suitable product range and invested in technology to suit the needs of every consumer segment in order to sustain its market share following the liberalisation of the market.

Caltex Lubricants Lanka Ltd, presently enjoys an 81 percent market share while the second largest player Lanka IOC claimed 12 percent and the others constitute only 7 percent.

Representatives of other market players including Lanka IOC, Associated Motorways, Mclarens Company Ltd, United Motors and NM distributors participated at yesterday's meeting. The Public Enterprise Reforms Commission (PERC) Director General Leel Wickremarachchy was also present.

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