Chevron Lubricants Lanka concerned about lack of regulation
View(s):Chevron Lubricants Lanka PLC, while reporting strong progress in the construction of its US$15 million new blending plant at Sapugaskanda due to open in October , has expressed concern over the lack of proper regulation in the lubricants industry. It has also raised the serious issue of ‘product adulteration in various forms, posing a serious risk to the consumer’.
Company Managing Director/CEO Kishu Gomes in his annual review for 2013, issued in March, said that with 13 players operating in a market that is relatively small with a potential of 55 mn litres per annum, the Ministry of Petroleum Industries has initiated action to award further licences to new entrants to the lubricants industry.
“While more competition may be good for the consumer it becomes imperative to bring about the right regulations and put in place a legal framework to ensure sanity in the market for fair play and to safeguard the consumers,” he said adding that in the absence of a proper regulator the Public Utilities Commission of Sri Lanka (PUCSL) which operates as the shadow regulator has not been empowered to deal with the issues the industry has been confronted with.
“These have been brought to the notice of all stakeholders by the industry players, but without success. The re-branding and distribution of products by non-licensed players also continues unabated while ‘cross filling’, the filling of products to containers proprietary to other players thereby misleading the customer and avoiding duties and taxes to the government coffers in some cases,” he said in the review.
Mr. Gomes believes that with the increased number of players that may enter the market in 2014, these issues are likely to get aggravated. “Therefore the necessity for an effective regulator is an urgent need of the hour from the perspective of all stakeholders. It is hoped that the government be judicious in issuing licences to more players, as this could have an adverse effect on the industry as a whole. As a market leader, we have been lobbying for greater regulation of companies and products to protect consumers from the serious negative consequences including product adulteration,” he added.
The company recorded a 12 per cent increase in profits to Rs. 2.53 billion from Rs 2.26 billion in 2013. The ability to keep increasing the bottom-line progressively despite the challenging conditions, “speaks for the maturity of its business strategies” and its unwavering commitment to its sustainability agenda, the report said.
He said 2013 marked 12 years of Sri Lanka operations without ‘loss time incidents’ – an enviable injury-free record – where no employee injured in the workplace had to forego a single day of work.
The new state- of- the- art plant will have new technology and will also co-locate the warehouse on the same premises, a move that is expected to deliver cost savings for the company.