Lubricant maker German Mirror cites new tax as key draw; mulls blending plant
The teething struggles with the implementation of the Goods & Services Tax (GST) notwithstanding, the tax reform measure seems to have helped draw a foreign company to set up shop in India.
German Mirror Lubricants & Greases Co. FZE, a German company now based in the UAE, has entered the country with a distribution arrangement with Mumbai based AN Corp.
The lubricant maker had considered India as a possible base, 18 years ago, before relocating to West Asia.
The company plans to market its premium range of lubricants and greases to automobile, shipping and manufacturing customers in nine States in the first phase. Once business stabilises, it plans to invest in a blending plant.
In 1999, German Mirror had zeroed in on India to relocate business operations as manufacturing had become expensive in Germany and India was known as a low-cost manufacturing base.
“For competitive reasons, we wanted to relocate base to India but stayed away,” said Mohammed Hussein Hindi, MD, German Mirror, which sells its lubricants under the Mirr Oils brand. “That was in 1999. Because of the complicated tax structure in India and difficulty in running a business here, we shifted to Sharjah from Germany,” he said.
In 2000, the firm set up its grease manufacturing and oil blending base in the UAE where it has invested more than $100 million.
“Now with GST implemented, we found the business environment conducive to enter India. We may be late entrants, but the time is right,” he said.
“India is the third-largest market in the world after China and USA, with 6% global market share. It has potential to be in the [top] two. We are evaluating market conditions to set up a lubricant oil blending plant in the near future,” Mr. Hindi said.
The firm exports to more than 70 countries and supplies to Porsche, Daimler, Volvo, Cummins, MAN and Volkswagen.
“Initially, we are targeting 0.5% share of the 2.3 million metric tonnes lubricants market in India,” said Kiran Hebbalkar, marketing & sales manager, Asia Pacific & Africa, German Mirror. Supplies would be from the UAE
Source : http://www.thehindu.com/business/Industry/gst-effect-mirr-oils-to-enter-india/article21011256.ece