Castrol to shut lubricant unit by month-end

Castrol India, a unit of Europe's second-biggest energy firm BP Plc, today said it would shut down a lubricant manufacturing plant in Tamil Nadu by month-end.

Castrol in a filing to the Bombay Stock Exchange cited a steep increase in manufacturing cost as the reason for the closure.

The plant located at Tondiarpet in Chennai "is one the company's oldest plants in the country and was faced with a situation of high landed cost of base oil leading to a steep increase in its manufacturing cost per litre over the past several months," Castrol said. "This had adversely affected the production activities in the plant."

The plant would be closed from July 31 and the manufacturing activities would be phased out.

"The company had decided to phase out the manufacturing activities at the plant and as a consequence offered a Voluntary Retirement Scheme to its employees working in the said plant," it said.

Employees have opted to separate by availing the benefits under the scheme.

"The company would decide at a later date the future of the plant, machinery and part of the land which it owns at this site," the filing said.

Shares of Castrol India closed up 3.02% at Rs 574.30 apiece on the BSE.