Castrol and Its Distributors

This study was carried out, as part of the MBA curriculum prescribed by the Bangalore University, after the 1st year of the MBA programme i. e. after the 2nd semester and before the commencement of the second year i. e. before the 3rd semester of the MBA programme. We had to undergo summer training in the corporate sector for hands on experience, where we get an opportunity to put into practice the knowledge gained during the entire first year. Hence, the organizational study was conducted at Shekar Agencies, Bangalore, for a period of 5 weeks. The organization was studied on an overall basis. The objective of our study was to:

* Understand the structure of Shekar Agencies and how it functions. * Understand the different facets of the environment in which the organization operates. * Understand the culture of Shekar Agencies. * Know about the decision-making processes in Shekar Agencies. The process or methodology used in this study was: * Learn about the working environment of Shekar Agencies. * Sketch the organizational hierarchy. * Assess the performance of Shekar Agencies. * Study the procedures, functions and activities of Shekar Agencies employees. * To examine the changes in the environment and how best Shekar Agencies can achieve its objectives.

1. 2 INDUSTRY PROFILE 1. 2. 1 Meaning of Lubricant The word ‘LUBRICANT’ means a substance such as grease or oil which reduces friction when applied as a surface coating to moving parts. It may also have the function of transporting foreign particles. The property of reducing friction is known as lubricity. 1. 2. 2 Manufacturing Process of Lubricating Oil Lube oil is extracted from crude oil, which undergoes a preliminary purification process (sedimentation) before it is pumped into fractionating towers. A typical high-efficiency fractionating tower, 25 to 35 feet (7. 6 to 10.

6 meters) in diameter and up to 400 feet (122 meters) tall, is constructed of high grade steels to resist the corrosive compounds present in crude oils; inside, it is fitted with an ascending series of condensate collecting trays. Within a tower, the thousands of hydrocarbons in crude oil are separated from each other by a process called fractional distillation. As the vapours rise up through the tower, the various fractions cool, condense, and return to liquid form at different rates determined by their respective boiling points (the lower the boiling point of the fraction, the higher it rises before condensing). Natural gas reaches

Crude oil distillation process A good lubricant possesses the following characteristics: * High boiling point. * Low freezing point. * High viscosity index. * Thermal stability. * Corrosion prevention. * High resistance to oxidation. The most important function of lubricants is the reduction of friction and wear and in some cases; the relative movement of two bearing surfaces is only possible if a lubricant is present. In times when saving energy and resources and cutting emission have become central environmental matters, lubricants are increasingly attracting public awareness. Scientific research has shown that 0.

4 % of gross domestic product could be saved in terms of energy in Western industrialized countries if current tribological knowledge, i. e. the science of friction, wear and lubrication, was just applied to lubricated processes. Apart from important applications in internal combustion engines, vehicle and industrial gearboxes, compressors, turbines or hydraulic systems, there are a vast number of other applications which mostly require specifically tailored lubricants. This is illustrated by the numerous types of greases or the different lubricants for chip-forming and chip-free metalworking operations which are available.

Between 5000 and 10 000 different lubricant formulations are necessary to satisfy more than 90 % of all lubricant applications. If one thinks of lubricants today, the first type to come to mind are mineral oil based. Mineral oil components continue to form the quantitatively most important foundation of lubricants. Petrochemical components and increasingly derivatives of natural, harvestable raw materials from the oleo-chemical industry are finding increasing acceptance because of their environmental compatibility and some technical advantages.

On average, lubricating oils, which quantitatively account for about 90 % of lubricant consumption, consist of about 93 % base oils and 7 % chemical additives and other components (between 0. 5 and 40 %). Worldwide, there are 1380 lubricant manufacturers ranging from large to small. On one hand there are vertically-integrated petroleum companies whose main business objective is the discovery, extraction and refining of crude oil. Lubricants account for only a very small part of their oil business. At present, there are about 180 such national and multinational oil companies engaged in manufacturing lubricants.

The 1200 independent lubricant companies mainly concentrate on the manufacturing and marketing of lubricants and view lubricants as their core business. While the large, integrated companies focus on high-volume lubricants such as engine, gear and hydraulic oils, many independent lube companies concentrate on specialties and niche business, where apart from some tailor-made lubricants, comprehensive and expert customer service is part of the package. The top 1 % of the world’s manufacturers of finished lubricants (of which there are more than 1380) account for more than 60 % of global sales; the other 99 % share less than 40 %.

World ranking of the largest manufacturers of lubricants (2005) 1. Shell Great Britain/The Netherlands 2. Exxon Mobil USA 3. BP (Castrol) UK 4. Petrochina/Sinopec China 5. Chevron USA 6. Lukoil Russia 7. Fuchs Germany 8. Nippon Oil Japan 9. Valvoline USA 10. Idemitsu Japan 11. Conoco Phillips USA 12. CPC Taiwan 13. PDVSA Venezuela 14. Repsol Spain 15. Indian Oil India 16. Agip Italy 17. Yukos Russia World ranking of the largest manufacturers of industrial lubricants (2005) 1. Exxon Mobil USA 2. Shell Great Britain/Netherlands 3.

Petrochina/Sinopec China 4. Chevron USA 5. BP (Castrol) UK 6. Fuchs Germany 7. Nippon Oil Japan 8. Idemitsu Japan 9. Total France 10. Lukoil Russia 11. PDVSA Venezuela 12. Yukos Russia 13. Repsol Spain 14. Agip Italy 15. Valvoline USA 16. Conoco Phillips USA 1. 2. 3 Global Scenario Declining demand growth of automotive lubricants, increasing competition on account of the presence of a large number of players, and increasing raw material costs and marketing expenditure are leading to declining player margins in the lubricant industry.

Global demand for lubricants in the world is estimated at around 41 million (mn) KL. Automotive lubricants account for around 54%, Industrial lubricants for around 41% and Marine lubricants for the balance. Globally, the lubricants industry has been growing at 2. 0-2. 5% per annum in the past five years. In developed countries, automotive lubricants have been growing at a slower rate of 1. 0% per annum on account of the saturation of vehicle population, improved engine technology and better quality of oil.