There's no room for more players in lubricant market
BY CHANNA Kasturisinghe
Kishu Gomes, caltex MD
Pix by: Sumanachandra
Ariyawansa
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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. |