In the backdrop of the investment buzz as a result of Prime Minister Narendra Modi’s US visit, another key investment that made headlines is Lubrizol’s recent commitment of $150 million. This is the company’s largest India-based investment in its 50 years of operation in the region. Not just that, as per the company, India will account for more than 20 per cent of incremental global chemical consumption over the next two decades. Speaking about their India plans, Rebecca Liebert, President and CEO of The Lubrizol Corporation said that they see India as a “key partner” in its localisation strategy for the region. It is betting big on “Local for Local” approach “as it supports investment in the region.”
Elaborating on the recent investment and the company’s expansion plans Liebert told FE Online that they plan to add “new manufacturing units, lab and R&D sites supporting in-country innovation and adding jobs that capitalise on the great expanding workforce and business conditions in India. These investments will allow us to serve needs not only in India but in surrounding countries, including enabling clean water access, propelling accessible transportation and meeting personal and home care needs of a growing middle class.”
Explaining the scale and rationale of investment, O’Neil Pinto , Senior Business Director – TempRite (EMEAI ) explained that, “India is the largest and fastest growing CPVC market for Lubrizol. This investment provides our customers with increased, reliable CPVC supply. We are committed to working with our customers to develop innovative solutions and expand distribution; addressing the growing need for CPVC in India.”
Here is an excerpt of the interview with Rebecca Liebert, President and CEO of The Lubrizol Corporation on how they are taking forward the India business and the expansion plans –
Lubrizol Corporation has committed more than $150 million in various India projects, what’s driving the investment plans?
There are several macro and micro trends that are driving Lubrizol’s commitment to India. In addition to it recently surpassing China as the world’s most populated country, India is among the fastest growing global economies, with a high employable labore force and attractive cost of doing business. It’s growing middle class is creating new demands in infrastructure, transportation and personal care, which represents a great Lubrizol opportunity.
How does the Lubrizol and Grasim partnership add to business synergies?
Grasim is the flagship company in the Aditya Birla Group and the largest Chlor-Alkali player in India, a critical raw material in CPVC resin, which will be shared by Grasim via a pipeline delivery network. This is a safe and sustainable delivery option, reducing the need to transport this material via truck (or other less-sustainable delivery modes) and thereby reducing transport emissions. Besides sharing Lubrizol’s priority on sustainable manufacturing practices, Grasim’s strategic focus blends well with that of Lubrizol to form synergies in the CPVC manufacturing sector and market.
How lucrative is India’s positioning as a manufacturing base for specialty chemicals?
It is expected that India will account for more than 20% of incremental global chemical consumption over the next two decades. Lubrizol believes in a “Local for Local” approach where possible, as it supports investment in the region (infrastructure and people) and is beneficial for the end customer and sustainability efforts, with product in-region to support demand fluctuations and less shipments, saving time, money and fuel.
How do you view the taxation laws for investment in India Vs US?
Capital costs for construction, materials and machinery in India are very cost competitive, and ease of doing business is high. Corporate tax rates are comparable with leading economies.
In the backdrop of PM Modi’s US visit, if you can elaborate on the finer details of US companies investing in India, the policies and what you look forward to?
India is an attractive region to invest in. For Lubrizol, the decision to expand our CPVC manufacturing in India is motivated by a desire to localise manufacturing of a critical material in closer proximity to our customers in India to assure their security of supply, particularly in a rapidly expanding market. Localisation also will allow us to provide CPVC faster and with a reduced carbon footprint from transportation. We view India to be a key partner in our localization strategy.
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