Castrol To Mull Amalgamation Of Tata-Bp

Castrol India, the local subsidiary of BP-Amoco, will be considering a scheme of amalgamation with Tata-BP Lubricants, now a wholly owned subsidiary of the British oil major after the exit of the Tatas from the venture.

The Castrol board will meet on September 20 to consider the proposal, the company informed the Bombay Stock Exchange.

The amalgamation will further consolidate Castrol India's presence in the highly fragmented automotive lubes market.

Tata-BP, which offers high value auto lubricants, gear oils, greases and hydraulic oils, currently has about a 10 per cent share in the commercial vehicles segment, in addition to a marginal presence in the exports market.

Castrol India, which manufactures both industrial and automotive grades of lubricants, is currently a leading player in the domestic lubes market. Servo, the lubricants brand of oil public sector undertaking, Indian Oil Corporation, is the other major player in the lubes market.

Last year, BP-Amoco had taken over Burmah Castrol, Castrol India's parent. However, as Tata-BP is a smaller player, it would be merged into Castrol rather than the other way round.

A Tata spokesman said the Tatas have now officially exited from Tata-BP, in which it held 50 per cent stake.

The Tatas chose to exit from the venture as part of their decision to quit from all non-core operations. Tata-BP is a marginal player in the lubricants business, and the Tatas felt it would require substantial investments to grow the company into a major player.

At the same time, the Tatas did not have the necessary expertise in the area , which could have come only from BP-Amoco.