INTERNATIONAL BUSINESS

ENTRY OF INDIAN OIL CORPORATION LIMITED (IOCL)LUBRICANTS IN SOUTH AFRICAN MARKET

Indian Oil Corporation Limited (IOCL) is a leading Indian oil and gas company with a diversified
portfolio, including lubricants under the brand name SERVO.

IOCL lubricants are known for their quality, performance, and reliability, making them competitive in
the global market.

Why lubricant oil ?

According to a report by Research and Markets, the lubricants market in South Africa was valued at
USD 1.7 billion in 2020 and is projected to reach USD 2.1 billion by 2025, growing at a CAGR of 4.2%
during the forecast period.

The demand for lubricants in South Africa is driven by various industries, including automotive,
manufacturing, mining, and agriculture

No. of 2-wheelers present in South Africa 3.3 million, growing number of vehicles on the road and
the need for maintenance and lubrication.

According to a report by Grand View Research, the demand for bio-based lubricants in South Africa is
expected to witness significant growth due to stringent environmental regulations and consumer
preferences for sustainable products.

India has a competitive advantage in producing quality lubricant oils at competitive prices.
The existing demand for lubricants in South Africa, coupled with the projected growth in the market,
makes it an attractive product for export.

Why South Africa?

South Africa has a growing lubricants market, driven by various industries such as automotive,
manufacturing, mining, and agriculture.
The demand for lubricants in South Africa is projected to reach USD 2.1 billion by 2025, indicating
significant growth potential.

India exports a considerable amount of lubricants to South Africa, indicating existing trade ties and
market demand.

The stable democracy and relatively stable economic environment in South Africa provide a conducive
business environment.

India exported 5,020 commodities to South Africa in FY23.

India’s export to South Africa stood at US$ 5.61 billion from April-November 2023-24.

Major exported items from India to South Africa include petroleum products (US$ 2.65 billion)

INDIA-SOUTH AFRICA TRADE

In 2022-23, bilateral trade between the two countries reached around US$ 18.87 billion.

South Africa occupies the 37th position in FDI equity inflows into India with a cumulative FDI amount
of US$ 595.87 million from April 2000-September 2023.
During April-October 2023-24, bilateral trade between India and South Africa reached around US$
11.66 billion.

In the South African market, IOCL lubricants can leverage their reputation and expertise to capture
market share, especially in segments like automotive, manufacturing, and mining.

Profitability can be achieved through strategic pricing, efficient distribution, and effective
marketing strategies.

Name= SERVO Lubricants South Africa

Why this name ?- to maintain brand consistency and recognition.

SOUTH AFRICAN LUBRICANT MARKET:

South Africa Lubricants Industry Overview

The South Africa Lubricants Market is fairly consolidated, with the top five companies occupying
86.58%. The major players in this market are Astron Energy Pty Ltd, BP PLC (Castrol), Engen Petroleum
Ltd, Shell plc and Total Energies (sorted alphabetically).

South Africa Lubricants Market Leaders

1. Astron Energy Pty Ltd

2. BP PLC (Castrol)
3. Engen Petroleum Ltd
4. Shell plc
5. Total Energies

How we can compete with competitors ?

Major competitors include Astron Energy Pty Ltd, BP PLC (Castrol), Engen Petroleum Ltd, Shell plc,
and Total Energies.
We can adopt differentiation strategy by highlighting the unique features and benefits of IOCL
lubricants, such as quality, reliability, and performance.

We can Invest in branding, marketing, and product innovation to create a distinct market presence
and compete effectively.

Export Process:

Product Registration: Register your lubricant with the South African Bureau of Standards (SABS).

Import Permit: Obtain an import permit from the South African Revenue Service (SARS).

Customs Clearance: Meet customs clearance procedures for importing your lubricant oil.

ROUTE OF ENTRY

Joint ventures, mergers and acquisitions in the industry has increased significantly over the past
decade. Companies constantly seek to establish long-term contract agreements with trusted partners
for sustainable business operations globally.

Merger and acquisition- Forming strategic alliances or joint ventures with local distributors or
companies.
Direct exportation through establishing distribution channels or utilizing existing trade networks.
Acquiring or partnering with local companies to gain market access and knowledge.

SEGMENTATION POSITIONING TARGETING

could include automotive,
manufacturing, mining, and agriculture
industries. Additionally, considering the
growing demand for bio-based
lubricants, a segment focused on
environmentally conscious consumers
could be targeted.
high-quality, reliable, Target industries with a high
and performance- demand for lubricants, such as
driven products automotive manufacturing,
suitable for diverse mining operations, and
industrial agriculture machinery.
applications.
Capital requirement will depend on various factors such as market entry strategy, distribution
network establishment, marketing expenses, and regulatory compliance costs.

Market size: The South African lubricants market was valued at USD 1.7 billion in 2020, with a
projected CAGR of 4.2%, indicating a growing market potential.

Market prediction: The market is expected to reach USD 2.1 billion by 2025, driven by industrial
growth and increasing demand from various sectors.

Some of the major companies operating in the Global Two-wheeler Market include:

· Bajaj Auto Ltd.

· TVS Motor Company Limited

· Yamaha Motor Co., Ltd.

· Hero MotoCorp Ltd.

· Honda Motor Co, Ltd.

· Kwang Yang Motor Co., Ltd.

· Suzuki Motor Corporation

· Sanyang Motor Co., Ltd.

· Lifan Motors

· Luoyang Northern Ek Chor Motorcycle Co., Ltd.

SWOT ANALYSIS

1. STRENGHTS:

1. Availability of large no. of two wheelers in the market

2. Presence of Indian Companies compatible with IOCL Lubricants
3. Trust on Indian Brands
4. Less competitive market

2. WEAKNESS:
1. Established Brands with large market shares
2. Existence of local competition
3. Need of developed Infrastructure
4. New Company Entry

3. OPPORTUNITIES:
1. Growth of the two-wheeler market
2. Consumer Demand
3. Demand for better quality products
 4. Developing Economy

4. THREATS:
1. Existing Companies (Local competition)
2. Income levels
3. Consumer Awareness
4. Large Segment Reach

 India Export data, Lubricant, Oil export shipments from India to South Africa stood
at 59.9K exported by 1,385 India Exporters to 1385 South Africa Buyers.
 India exports most of it's Lubricant, Oil to South Africaand is the largest exporter of
Lubricant, Oil in the World.

 South Africa Import data, Lubricant import shipments in South Africa stood at 18.4K,
imported by 868 South Africa Importers from 632 Suppliers.
 South Africa imports most of its Lubricant from India, Germany and Netherlands .
 Import of Lubricant from India is 511,321 shipment

India export to 2021-2022 2022-2023 Growth%

South Africa 1,420.16 3,739.02 163.28

PESTLE ANALYSIS

1. POLITICAL:
1. authorisation from the Department of Mineral Resources and Energy
2. import or export permit issued by the International Trade Administration Commission of
South Africa
3. import/export licence issued by the South African Revenue authority
4. Customs duty and VAT (at 14%, 0% or exempt) is due on importation of goods into the
Southern African Customs Union (“SAC”)
5. Stable Democracy
6. High Levels of Corruption

2. ECONOMIC:
1. GDP (S.A) 40,527.09 crores USD (2022)
2. GDP growth rate1.9% annual change (2022)
3. Lack of developed Infrastructure
4. Large no. of FDIs

3. SOCIAL:
1. Different Culture and Tradition
2. Mix of people
3. Division of people based on Colour
4. Unskilled labour availability
5. Need of training and development

4. TECHNOLOGICAL
1. Rapid development of technology according to industry
2. Availability of machinery
3. Segments lacking in developed technology
4. Need a more developed Infrastructure

5. LEGAL:
1. Complacence with the authorities
2. Need to register with various different gov. authorities
3. Bureaucracy problems
4. Registration process

5. Environment:
1. Need of Job opportunities
2. Availability of Skilled and unskilled workers
3. Pollution Concerns
4. Public Opition