Pricing Term Paper

Valvoline Cummins Ltd.

Term paper submission in the favor of completion of Pricing Course.

Group - II

Biju Naik E2009005

Parag Sharma E2009029

Shyam Shet E2009045

Simon Pinto E2009046

Vinayak Bhomkar E2009055

Valvoline Cummins LimitedValvoline brand of lubricants is brought to India by Valvoline Cummins Ltd which is a 50:50 joint venture between Valvoline International Inc USA and Cummins India Limited.

The product range of Valvoline Cummins Ltd (VCL) includes high quality Automotive and Industrial lubricants such as Engine Oils, Gear Oils, Transmission Oils, Cutting Oils, Greases, Specialties, etc and also technologically superior oils for CNG engines & Turbocharged engines.

Valvoline has a wide range of Synthetic, Semi synthetic and Mineral based oils. All these International standard Valvoline lubricants are blended in India in Mumbai, using selected base oils and special additives as per Valvoline International’s formulations/standards.

The Valvoline CompanyValvoline International Inc., is a 100% subsidiary of Ashland Inc. (USA), a corporation listed in the prestigious “FORTUNE 500” group of companies with an annual turnover of 15 billion US $. Valvoline brand of lubricants has a very strong presence in the USA, Australia and Europe. Dr. John Ellis, the founder of Valvoline produced America’s first crude based lubricating oil in 1866.Valvoline is truly a global company with presence in more than 120 countries for more than 140 years. Today the Valvoline trademark is a part of Ashland, a Fortune 500 company. Valvoline is the oldest trademark for mineral based lubricating oils for over 139 years. Valvoline throughout the world is known as.” World’s First, World’s Finest”

The Cummins CompanyCummins is a pioneer and leader in diesel engine technology for 90 years and was incorporated on 3 rd

February 1919. Cummins today is the world’s largest independent manufacturer of diesel engines and is found in various applications in over 190 countries. Cummins India Ltd (CIL), headquartered in Pune since 1962, is the country’s leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets. Cummins in India, a power leader, is a group of complementary business units that design, manufacture, distribute and service engines & related technologies. Its high performance outlook is based on customer focus, integrity and capability of its people. Part of the US $10.8 billion Cummins Inc, Cummins in India is a group of 9 Legal entities across 200 locations in the country with a combined turnover of over Rs. 6300 crores, and employing more than 11000 individuals.

Cummins Vision: Making People’s life better by unleashing the power of Cummins.

Valvoline Cummins Limited Profile

Valvoline Cummins Limited was incorporated in 1994, and promoted by Valvoline International Inc, in a joint venture with Cummins India Limited, in which the partners hold 50% equity each. The product range of VCL includes high quality Automotive and Industrial lubricants such as Engine Oils, Gear Oils, Transmission Oils, Cutting Oils, Greases, Specialties, etc and also technologically superior oils for CNG engines & Turbocharged engines.

Valvoline has a wide range of Synthetic, Semi synthetic and Mineral based oils. All these International standard Valvoline lubricants are blended in India in Mumbai, using selected base oils and special additives as per Valvoline International’s formulations/standards

The Indian lubricant market is amongst the most challenging in the world for a variety of reasons. There are well entrenched PSU’s, like IOC,HPCL,BPCL, besides large private MNC Lubricant brands operating for the past 100 years(Like Castrol, Shell) and a multitude of price players in the market. The JV between Valvoline & Cummins was first conceived in 1998 considering all the above factors. It was an unique experiment that was attempted: a lubricant manufacturer, and an engine maker had for the first time decided to pool in their expertise to offer the best possible product to the customer. The JV had not only to live up to the expectations of the Indian market place but also to live up to its own hallowed history-after all it was Valvoline that had invented the first motor oil in the world 1866AD.

And the JV did live up to expectations! Since its inception in 1998, Valvoline has been amongst the fastest growing lubricant brand in the country and has steadily clocked milestones along the way. From just incipient volumes in 1998, it has grown to be the 3rd largest independent foreign lubricant brand in India in just 10 years. The key to this transformational growth has been the sustained emphasis on 3 aspects- Consistent customer satisfaction driven focus, the latest and technologically most advanced products and an all India distribution reach.

Valvoline Vision:We will be known throughout the world for our premium products, services and people.

We are committed to:

Building premium brands and businesses Providing superior value to our customers Creating unique solutions that enable our business partners to succeed with us. Developing our people through a culture that values teamwork, excellence and personal growth

“Premiumness” is our Business. Winning is our passion

Lubricant Market in IndiaThe lubricant market in India is intensely competitive & big.- Rs. 14,000 core per annum and growing at 4%.It is highly competitive industry, with well entrenched PSU Companies like IOC, HPCL &BPCL.IOC is the marker leader and enjoys 23% market share Among the private sector MNC Companies, Castrol has

the largest market share at 21%.The industry is led by 4 major players(Castrol India Ltd, IOCL, BPCL, HPCL), who contribute to approx. 65% of the market. Rest 35% of the market share is occupied by numerous players including global MNC’s like Shell, Gulf, ELF, and Valvoline.

The lubricant market is India, is expected to grow at about 4% per annum till 2013. The reasons for the low growth of the lubricant industry are twofold. Firstly technology has reduced the frequency of oil change for engines. Whereas earlier engine oils were recommended to be changed every 5000-8000 Km, today the minimum oil change is at 18000 Km, and in newer engines it is recommended at 36000 Km. Second sump size has reduced to about 15 liters, now from 18-20 liters earlier, thus leading to lower consumption of engine oil at each fill.

Industry Structure & DevelopmentThe lubricant market in India is broadly divided in to 2 major segments based upon end users: Automotive segment & Industrial segment

Automotive Segment: The Automotive lubricant account for approx 62% of the market share. This sector is further divided in to 3 sub segments based upon the end users:(1)Commercial-Mainly diesel engine oil(2)Passenger cars-Mainly gasoline engine oils(3)Motorcycles & 3 wheelers-2 stroke & 4 stroke engine oils. The diesel Engine oil segment dominates the automotive lubricant market with a volume contribution of over 70%. The two wheeler, passenger car segments have been growing in volume & value & account for about 24% of the market.Vehicle growth across all segments has been very good over the past 2 years; however the lubricant demand has not grown proportionately. New engine and lubricant technology has resulted in lower requirement and longer usage life of the lubricant. For e.g.: the new generation 4 stroke motorcycle consumes about 15% lesser lubricants as compared to 2 stroke lubricants. In addition in the diesel engine oil segment due to increasing fuel cost and the relative inelasticity of freight charges owners of older trucks are delaying the oil drain intervals in order to reduce costs and hence be more competitive with the newer vehicle operators.

Industrial segment (Non Automotive): The industrial segment accounts for approx 23% of the market share. The growth in the industrial sectors revolves around the growth in manufacturing related projects. Industrial segment includes lubricants used in iron ore/coal mines, steel plants, cement plants, fertilizers, construction and infrastructure projects, and industrial undertakings. The different industrial lubricants include hydraulic oils, gear oils, coolants.The industrial segment is dominated by IOC which has a market share of 50% with the balance being distributed amongst other lubricant manufacturers.

Valvoline Cummins Limited (VCL) is present in both the industrial and retail segments of the market. It sells approximately 61% of the market to the retail segment and 39% to the industrial and institutional segment. The major clients of VCL in the institutional segments include Cummins, Mahindra & Mahindra, AMW, Sonalika, Terex Vectra, and Swaraj Mazda.

Distribution StructureThe Indian automotive lubricants market is largely price sensitive and volume growth is stagnating due to longer lasting lubricants. Companies are adopting a more customer oriented approach where they are likely to focus on creating brand awareness through print and visual media. For eg promotional campaigns and trade shows offering gifts to their customers are methods of driving sales of automotive lubricants.

The original equipment segment and retail trade are the 2 major marketing channels in the Indian automotive lubricants market. Due to the growing competition, tie ups with Original Equipment manufacturers (OEM) are becoming important as they reinforce the value proposition in a particular brand.

Post 1990, with the liberalization of the Indian economy, and the opening of the Indian markets to foreign MNC Companies, the distribution of lubricants in India has undergone a transformation.

Public sector companies that manufacture their own base oils, follow different distribution strategies as compared to private participants that solely dependent on imports. While PSU’s sell their through their own wide spread network of petrol stations, private manufacturers prefer retail outlets.

The sale of lubricants through retail outlets has transformed the Indian automotive lubricants in to Fast moving consumer goods (FMCG). The other marketing channels are authorized service stations, garages, rural & agricultural dealers, super markets and wholesale distributors.

The Business Model adopted by Valvoline Cummins LtdValvoline has structured its lubricant operations in India in 4 divisions to address different market segments. The divisions are structured to cater to the specific demands of each sector and thus each division brings its core competency to the market place.

Retail Division: This division specifically caters to the direct consumer through a chain of 700 distributors, and a retail segment base of more than 29000 retailers across India. This bazaar (open market segment), is the major contributor, and accounts for approximately 61%, of its total sales. All the sales of VCL in the automotive segment come from the bazaar i.e. division.

OEM Business: The OEM division has been recently created to the rapidly growing OEM businesses, both in first fill and in after market. VCL has many OE customers like Elgi, Terex, AMW, Mahindra & Mahindra, Swaraj Mazda. The division has been created, so that there can be focused service to this important & growing segments.

VPP: The Valvoline Performance Products division (VPP), has in product portfolio, a range of specialty chemicals and rust preventives. Other niche products that are served through this division include specialty greases, fire proof lubricants and metal working fluids.

Commercial & Industrial Division: The institutional business is covered by the C&I division of Valvoline. The Cummins grades specifically for Cummins engines and other industrial grades such as hydraulic oils, transmissions oils, gear oils, greases, brake fluids and coolants are specifically catered through this segment. This division caters to the B to B Sales. The important sectors like Mining, Cement, and Infrastructure etc are catered by this division.

Valvoline Cummins Ltd Market Positioning in IndiaEver since its inception in 1998, Valvoline Cummins Limited has been the fastest growing lubricant company in India. From just incipient volumes in 1998, it has grown to be the third largest independent foreign lubricant brand in India in just 10 years. From just incipient volumes in 1998, it has grown to be the 3rd largest independent foreign lubricant brand in India in just 10 years. The key to this transformational growth has been the sustained emphasis on 3 aspects- Consistent customer satisfaction driven focus, the latest and technologically most advanced products and an all India distribution reach.

VCL has captured market share of 8% of the lubricants market of the country in spite of being a late entrant in the industry. The Valvoline Cummins brand ranks amongst one of the well known brands in the business. VCL enjoys goodwill of Valvoline brand & Logo as well as technical support from Valvoline International inc. Owing to the association with Valvoline international, the company has access to a large database of formulations and enjoys R&D support which places it favorably to cater to a variety of applications in the lubricant sector in India. While the manufacturing per se is not technology intensive, formulation behind lubricants is science intensive, wherein VCL is advantageously placed at par with bigger players.

Even though the overall lubricant market growth in India, has slowed down owing to technological advancements, which has led to longer lubricant life and longer drain intervals, VCL has managed to grow its top line at a CAGR of 26% and its volumes at a CAGR of 11.1% from FY05 to FY09 due to proactive marketing initiatives, such as training programs for mechanics, road shows with vans equipped with audio visual aids and upgrading the packaging of products every 2 years to appeal to the consumers.

In the financial year 2008-09(Oct 08-Sept09), the company’s volume grew by 4.2%, as against 2-3%, de growth in the industry. This was chiefly due to 2 reasons. First the company increased its geographical reach substantially by appointing additional distributors, and increased its total distributors from 500 to about 700.Second the company acquired a new OEM customer Mahindra & Mahindra who alone added 1.5million liters of volumes. During HI 2009-10, the volumes of the company grew by 38% on a y-o-y basis due to robust growth in auto sector.

VCL Wide range of lubricant products and extensive marketing network:

VCL has a large product portfolio careering to various engines and segments such as diesel engine oils, motor cycle oil, and passenger car oils. The company has established a wide marketing and distribution network spread across all states in India. It has regional offices in Chennai, Mumbai, Calcutta, and Delhi. The company has 700 distributors, and has a dealer network of more than 29000 retailers. The company gets its lubricants manufactured at a state of the art facility at Mumbai. The company has 45 warehouses spread across the country.

Product Profile: This confidence that the customer has in Valvoline is buttressed by the comprehensive product portfolio of the largest Engine oils and industrial grades. Infact, Valvoline is amongst the very few lubricant companies in India that have launched both the CI4 Plus and CJ4 Plus oils in India.

The Lubricant market - VCL Strengths & Concerns:

VCL Strengths Strong brand name & technical support of promoter Valvoline International Inc Large captive business of promoting company Valvoline Cummins Ltd. Robust marketing & distribution network to cater to retail sale in the domestic market Demonstrated higher growth then the industry, due to proactive marketing strategies Moderate financial risk profile, characterized by moderate gearing level and high ROCE

Concerns

Intensely competitive lubricant oil industry, characterized by the presence of few large players as well as number of unorganized players, Valvoline Cummins is relatively smaller layer in the industry.

Industry growth relatively slow and negatively impacted due to technological developments, both on the lubricant and engine front, leading to low growth in recent years.

Vulnerability of profitability due to fluctuations in prices of base oil, which is a petroleum derivative, though the company has been able to pass on the raw material price hike to consumers.

Vulnerability of sales to slowdown in auto sector, however outlook is positive in near term due to favorable prospects for the auto sector.

Core competency of Valvoline Cummins LimitedVCL’s strong brand equity, technical support of the promoter Valvoline International (Subsidiary of Ashland Inc), large captive business of promoter Cummins India Limited, emphasis on premium products and wide distribution network of VCL.

Lubricant Manufacturing ProcessThe Lubricant manufacturing per se is not technology intensive; however formulation behind lubricants is science intensive.

Lubricants are manufactured by the blending of base oils and additives. The primary raw material used in a blending plant is base oil, which is manufactured in a refinery by the distillation of crude and varied refining processes. Apart from base oils a large number of additive chemicals are used in these lubricants in different proportions depending upon the end application. Base oil constitute anywhere between 75% to 100% of the final lubricant, and additives constitute 0 to 25% of the final lubricant depending upon the end application

What are Lubricants?

Base oils (75% to 100%) Additives(0 to 25%)

Finished Lubricant

Raw Materials used in Lubricant manufacturing: Base oil & Additives

Base Oil & Types of Base Oil: As seen above final lubricant is a blend of base oil & Additives. Base oil constitutes between 75% to 100% of the final lubricant. Hence, the type & quality of base oil used plays a very important role in determining the useful life of the finished lubricant. Base oil can be either a refined petroleum product, or it can be a synthetic material that is produced by a single manufacturer to give a set of specifications.

Mineral based oils are more commonly used. (Synthetic oils are very expensive, and hence their usage is confined only for very specific application like Aviation etc).

Mineral base oils are refined by a number of processes from crude oil and so the choice of crude can affect the consumption. The American Petroleum Institute (API), has established base oil classification for 5 different categories that are based on physical and chemical characteristics of the base stock

Group I to Group III categorize mineral based stocks by levels of Sulfur, % of saturates * VI.(Group IV &Group V are synthetic base stocks).

Valvoline Cummins Ltd, uses mainly Group II Hydro cracked base oils, which have high oxidation resistance, high thermal stability, high VI. This results in longer lubricant service.

Additives & Types of Additives

Additives are materials that are added to base oils, so as to enhance the existing properties of base oils, or to impart new properties, which the base oil does not have naturally.The percentage of additive in finished lubricant may vary between 0 to 25% depending upon the application. The different additives commonly used include:

Antiwear additives Detergents Dispersants Antioxidants Anticorrosion Viscosity Improvers Pour Point depressants

Blending of Lubricants The standard blending procedure for lubricants comprises of the following:

Addition of components( Base oils & Additives) Heating Mixing This is followed by testing of blend to confirm as far as possible that the right quantities of all

components are present After conducting various laboratory tests, the final lubricant is packed in various containers, and

dispatched.

Cost of Raw Materials & Finished ProductThe primary raw material used in lubricant manufacturing is mineral based base oil, which is manufactured in a refinery by the distillation of crude and varied refining processes. Apart from base oil a large number of chemical additives are also used in these lubricants in different proportions depending upon the end application. Valvoline Cummins Ltd procures its base oil from different sources. The company imports about 60-70% of its base oil requirement. It sources about 60% of its base oil from Exxon Mobil (Singapore). It sources the balance 30 to 40% of its base oil requirement from domestic oil companies like HPCL.

Vulnerability to fluctuations in International Crude oil prices as the major raw material is a petroleum derivative:

The primary raw material used in lubricant manufacturing, base oil is a derivative of petroleum. Hence all lubricant companies including VCL are exposed to fluctuations in crude oil prices. Like for instance in the current scenario of high crude oil prices, the prices of base oil have been fluctuating as seen in the fig. The product prices cannot be revised immediately, as there is a lag time in all mark ups and mark downs. However the company has been able to successfully pass on the price increases to consumers without sacrificing volumes.

Crude oilCrude prices continue to remain an important cost input element to base oil in addition to supply demand economics. The year 2009, for instance was a very volatile year. The crude price touched new lows at the end of 2008, at $40 per barrel, but by the end of 2009 it had risen to around $90 per barrel.

Base oil & additivesThe global downturn in economic conditions put many sectors to severe test. Though base oil prices were softer for a shorter period, eventually the general trend has been that the prices have increase from past year due to several factors. The global economic crisis affected the refining & marketing sector significantly. With intent to protect their refining margin and in view of lower demand, refineries sought to take measures like closures, run costs and forced shutdowns to balance the demand and supply situation. The performance additives prices remained high throughout last year. This was mainly because of rising demand in Asian countries and pricing policy of global additive companies to recover losses.

Wide Product Portfolio of Valvoline Cummins LimitedVCL has a wide product portfolio, catering to different segments with more than 400 Stock keeping units (SKU). The products are broadly classified in to the below segments:

1. DEO(Diesel Engine oil)2. MCO(Motor Cycle Oils)3. PCMO(Passenger car Motor oils)4. Coolants5. Brake Fluid6. Gear Oils7. Greases8. OEM Co-Branded oils9. Industrial oils.10. Cummins Oils

Within each of the above segment there are various pack sizes, ranging from 0.5 Ltrs to 210 Lts barrel. As part of the company strategy to remain competitive the product portfolio is reviewed by the company on a periodic basis so as to ensure that the product mix of the company is maintained at its optimum level to give desirable suitable growth to the company in the long run. In VCL, the marketing function is responsible for the product portfolio rationalization. The marketing function reviews the product mix of the company half yearly with complete analysis to optimize the product mix.

A particular SKU shall come under review for discontinuation if it has monthly sale of less than 3KL, and negative growth rate, over 2 successive years.

Similarly the marketing function of the company is responsible for handling the launch of new product/SKU in the market. As a company policy a new product SKU is launched only if it is expected to fetch a gross profit of minimum 10% AND 60KL (60,000 Ltrs), sales per annum.

OEM approval by recommendation The VCL has a strategy policy. They get the product approved by leading - National/International OEMRecently several global OEM has started accelerating their activities in India, both in the automobile and industrial segment. BMW, Audi, Volvo, MAN, Mahindra have launched several new model in the Indian market. These new technologies high performance engines will require high performance superior quality lubricant and this intern provide additional opportunities for the lubricant players. Valvoline thus continuously gets the approval from leading OEM.

Product Pack size (SKU): The pack sizes are determined as per the customer/ segment needs. Usually the customers are targeted by a 2 prolonged strategy:

1. The Authorized service centers, large fleet owners, large institutional customers through barrels.

2. The aftermarket: retailers, mechanics, small transporters through small packs.

Besides the sump size also plays a role in determining pack size. Like for instance the sump size of a particular engine is 10Liters, and if the oil is intended to be used in that engine, then the pack size may be 10Liters.

Most of the oils are also available in 1 Ltrs packs, as it is the quantity required for top up.

Product PricingVCL, publishes a basic price list of all the SKU’s. The same is circulated to all the sales Executives, and the authorized channel partners’ around the country. The price list acts as a valid document and is used at a reference while quoting prices to all customers. The price list is duly signed by the GM Sales, and VP Marketing. The price list contains the below details for eg:

Sr. No SAP Code Prod Description Pack size Basic Price Rs/Ltr Rs/Pack

1 500255 Premium Blue 15w40 CH4 210 151.50

2 500257 Premium Blue 15w40 CH4 55 158.00

3 500259 Premium Blue 15w40 CH4 20 172.00 4815.00

4 500262 Premium Blue 15w40 CH4 08 174.00 1950.00

5 500265 Premium Blue 15w40 CH4 05 180.00 1260.00

6 500350 Premium Blue 15w40 CI4 210 164.00

The price circular will include all the terms & conditions indicating the Excise duty, tax structure/statutory levies etc. It will be circulated to all the concerned indicating the precise date of price validity.

Price circulars are amended accordingly to accommodate price changes caused due to factors like increase in input costs etc. Also the terms and conditions specify that the prices are subjected to change without prior notice. However the company usually allocates week’s time before switching over to new price regime. This helps the company & channel partners in liquidating old price inventory.

In the lubricant industry Castrol has clear Price leadership. The general trend is that Castrol takes the lead in increasing the prices, and the other players follow.

Pricing BasisValvoline Cummins Limited, prices its different products, in such a way that it captures the value to the customer. The pricing covers the variable cost involved in manufacturing the product, like Input cost of base oil, additive, packaging material etc. The technological changes in engines, which have led to longer drain intervals, and better fuel efficiency, besides the tough regulatory mechanisms with respect to environmental norms, have led to transformation in lubricant industry. These challenges have been a blessing in disguise. The lubricant players including Valvoline have realized that the new engines, and tougher emission norms, have opened the opportunity for selling premium products. The customers are now more responsive to premium products, which are needed to counter the tough engine environment. Even though these technological changes have led to fewer oil changes, this has resulted in lower market growth. However this disadvantage has been offset, by promoting premium priced superior oils, which are formulated with premium base oils, and have longer life.

In the above case for example, Premium Blue 15W40 is premium quality API CH4 Engine oil. The oil is formulated using premium Group2, hydro cracked base oil, and selective additives. Valvoline claims that Premium Blue offers patented dispersant technology to help control soot, maintain viscosity and prevent resultant wear related problems. Thus Premium Blue exceeds API (American Petroleum Institute) standard limits, and offers unsurpassed protection. On the OE (Original Equipment) front it is exclusively recommended and endorsed by Cummins Inc. All Cummins engines are factory filled by Premium Blue. Besides Cummins approval, this product is tested & approved by several leading OEM’s like Volvo, Caterpillar, MAN, etc. This oil is marketed exclusively through authorized Cummins dealers. Apart from Cummins dealers this oil is not sold through any other local Retail distributor/dealer. This is a strategic policy of VCL, to further promote exclusivity, and is a conscious marketing policy

Apart from Cummins Dealers, this oil is sold to major Institutional customers directly on a case to case basis. The brand Premium Blue is promoted very strongly, and is thus sold at a premium. The variable cost of Premium Blue oil, which includes the cost of Base oil, additive, packaging material, freight amounts to Rs 51 per liter. Whereas the average selling price of this product (Average of all pack sizes), is Rs 170/Ltr. This selling price of Premium Blue, not only captures the variable cost involved in manufacturing, but it also captures the value served to the customer.

Product Differentiation

Product differentiation is a major strategy. Further the company has realized that as technology gets more mature, it is harder to achieve product differentiation. The company does not treat every customer equally. Thus, the customer segments the markets and pays separate attention to different customers.VCL Strives to sell a customized lubrication solution involving product and services that result in documented cost reductions & Productivity improvements.

The Cummins captive segment is a high profitability distribution network for VCL. Valvoline sells the Cummins oils to this segment, which are exclusively sold to this segment. Cummins dealers are able to sell at a premium, because of their wide network, and hold over their customers. Premium Blue is marketed and perceived as a premium brand of lubricant. It is positioned in the premium end of the market in direct competition with CH4 variant of Castrol & Shell Tellus CH4 Oil.

In a highly competitive market The Company has realized that it has to move from merely selling products, to selling customers solutions: customization, learning, and services bundled with products as a unique customer offering.

Thus in the case of Premium blue, the company not only relies on formulating a superior product, manufactured from superior base oils and additives, it also supports this offer with full package of oil analysis to help determine the oil drain interval and offer preventive maintenance tool protecting the customer’s investment

Specialty Products

Premium Products

Specifications Products

Product Technology

Customer engagement ProcessThe company has realized that they are not selling products by the ton, by the gallon or by the drum. We need to sell documented improvements in your customer needs and productivity. In case of major institutional customers, we adopt a customer engagement process. The different steps include:

1. Initial Information exchange.2. Management survey3. Proposal4. Implementation.5. Continuous Improvement.6. Document the advantages.

The Valvoline POST, Progressive Oil sampling Test, is one such tool used by VCL, which is greatly appreciated in the industry.VCL, Promotes this tool, not merely as oil testing facility, but as preventive maintenance tool. Here the oil samples are collected from customer site; send to our laboratory, tested for Physical & Chemical properties, including wear metal analysis. The entire program is Web based, where in the detailed report is available within 5 working days from receipt of the oil samples. This facility is available on a chargeable basis.( Rs 3000, for Physico Chemical test). However for institutional customer this is offered as value added service. This helps in binding major customers, as the advantages are quantifiable; the report helps to determine the useful life of the oil.

The other Value added services offered by VCL.

Lube dispensing equipments: VCL has tied up with Macnaught, the world leader in Lube dispensing equipments. These are offered to important customers to improve overall efficiency of lube operations.

Safe driving & Fuel saving Training: The Company conducts safe driving programs at major customers. VCL has tied with PCRA, a government enterprise, which conducts the 2 days program highlighting safe driving and fuel savings measures.

COLD (Customer operated Lube depot): Here we maintain inventory at the customer site, on behalf of the customer. This is done at major customer, where the business volumes are huge. This service is offered to many PSU Customers like NMDC, Coal India, which are located at remote locations.