Lubricant Manufacturing Plant Insights
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Introduction
Lubrication is simply the use of a material to improve the
smoothness if movement of one surface over another; the
material which is used in this way is called a lubricant.
Lubricants are usually liquids or semi-liquids, but may be solids
or gases or any combination of solids, liquids, and gases.
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Depending on its nature, lubricants are also used to eliminate
heat and wear debris, supply additives into the contact,
transmit power, protect, seal. A lubricant can be in liquid (oil,
water, etc.), solid (graphite, graphene, and molybdenum
disulfide), gaseous (air) or even semisolid (grease) forms. Most of
the lubricants contain additives (5-30%) to improve their
performance.
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Lubricating oil is a thick fatty oil used to make the parts of a
machine move smoothly.
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Applications of Lubricants:
Lubricants are primarily used to reduce friction stress between
surfaces. They have the following uses:
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Used in the soap and paint industries.
Some specific uses of certain variants of lubricants are:
Synthetic lubricants are used in turbines, vacuum pumps,
and semiconductor devices.
Molybdenum is used as a paint pigment and as a catalyst.
Liquid lubricants are used in medicines.
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Lubricants are also used as cutting fluids in many industries.
Oil, water, and oil emulsion are used as cutting fluids. These
liquids are used to cool as well as to lubricate surfaces.
Emulsions of oil in water are most widely used as cutting fluids.
Lubricants are also used as cutting fluids in cutting, grinding,
trading, and drilling of the metals. Cutting fluids are used in
machining operations where friction is very high because of
close contact between the work piece and the tool. This high
friction generates a large amount of local heat and the tool is
overheated and may even lose its temper and hardness. As a
result, liquids, such as lubricating oils, water, or water
emulsions are used on working parts of the machines.
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The use of lubricating oils in vehicles is vital to their operation.
When an engine is properly lubricated, it needs to put less work
into moving pistons as the pistons glide easily. In the long run,
this means that the car is able to operate while using less fuel
and run at a lower temperature. Overall, the proper use of
lubricating oil in a car improves efficiency and reduces the
amount of wear and tear on moving engine parts.
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Grease
A grease is best thought of as a sponge full of oil, with the
sponge being the “base“ or thickener. It holds the oil and
additives in place and gives the grease the basic characteristics
such as drop point and water resistance. The oil content,
typically 80-90% of the grease, provides most of the lubrication
performance. To achieve the desired characteristics of a grease,
careful selection of base lubricating oil viscosity, base type
additives and fillers is essential.
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When Are Greases Used
Greases are generally used in place of oil in the following
situations:
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• Lubrication points can only be reached during maintenance
shutdowns.
• It is important to maintain lubricant in the bearing area
during periods of prolonged shutdowns or frequent stop-start
operations (oil drains away when a machine is stopped but a
grease does not).
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Machinery Photographs
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Market Outlook
The main role of a lubricant is to reduce friction between metal
surfaces, leading to reduction of heat generation and ultimately
to the protection of the parts. Lubricants play an important role
in a variety of automotive, commercial and industrial
applications such as automotive, manufacturing, power
generation and marine. Automotive vehicles require engine oils,
transmission fluids, brake fluids and greases.
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The main role of a lubricant is to reduce friction between metal
surfaces, leading to reduction of heat generation and ultimately
to the protection of the parts. Lubricants play an important role
in a variety of automotive, commercial and industrial
applications such as automotive, manufacturing, power
generation and marine. Automotive vehicles require engine oils,
transmission fluids, brake fluids and greases.
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Lubricant consumption in India stood at around 2.9 million MT
during 2013-14, registering a healthy growth rate of 7.6%
during 2008-13; the market was valued at around INR 260
billion. Automotive lubricants account for around 47% of the
lubricant usage in India; industrial lubes and process oils
together account for the rest.
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Lubricant volume growth in India
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U.S. Lubricants Market size, by application, 2013-
2024 (USD Million)
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Currently, USA is the largest consumer of lubricant oil across
the world. China and India comes at second and third position
respectively. The consumption pattern In Indian lubricant oil
industry is similar to world lube industry. Majority of lubricant
is being consumed by automobile sector (55%), rest is being
used for Industrial purpose and marine industry.
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The business is driven by growth in infrastructure investments,
manufacturing, mining sector and increased manufacturing
exports. In this segment demand for high performance
lubricants are driven by applications such as compressors,
textile machinery windmills, captive power plants and others.
One of the essentials in lubricant science is world-class
technology. Lubricant technology is driven by the changing
needs of the customers and stakeholders.
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Automotive is the largest and fastest-growing end-use industry
for grease. The passenger vehicles and commercial vehicles are
driving the demand for high performance grease in the
automotive industry. In the automotive industry, grease is
extensively used in various auto parts such as wheel bearings,
universal joints, suspensions, gears, switches, and connectors
because of their excellent properties such as mechanical
stability, temperature tolerance, water resistance, and anti-
oxidants. The need for high performance grease is rising in the
increasing manufacturing of machines and equipment for end-
use industries.
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Industrial greases market trails the GDP due to their widespread
application in manufacturing of goods and automotive maintenance
operations. Due to the surge in manufacturing in Asia Pacific, the
industrial greases market in the region is estimated to witness
growth, expanding at a CAGR of 6.3% between 2015 and 2021 in
terms of revenue. With the anticipated increase in manufacturing in
China in the coming years, the demand for industrial greases in the
country is expected to rise between 2015 and 2021. With the rising
operating time of machines and greater speed of operations, the
need for industrial greases is expected to increase by 2021. Besides,
with increase in mechanization of manufacturing activities in
developed regions such as North America and Europe, demand for
industrial greases is anticipated to increase in these markets.
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Global Industrial Grease Market Value (US$ Mn) by
Application, 2013-2021
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Project at a Glance
PROJECT AT A GLANCE (Rs. in lacs)
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Project at a Glance
Yea Annualised Boo Debt Divid Retained Payo Proba P/E Yield
r k end Earnings ut ble Ratio Price/
Valu Marke Book
e t Price Value
Per [Link]
EPS CEPS Per Share Share Per Share Time
Rs Rs Rs Rs Rs % Rs % Rs s %
1- 14.9
2 4.95 9.19 5 24.00 0.00 100.00 4.95 0.00 4.95 1.00 0.00
2- 22.6
3 7.67 11.36 1 18.00 0.00 100.00 7.67 0.00 7.67 1.00 0.00
3- 32.9 10.3
4 10.37 13.59 8 12.00 0.00 100.00 7 0.00 10.37 1.00 0.00
45.9 12.9
4-5 12.99 15.80 7 6.00 0.00 100.00 9 0.00 12.99 1.00 0.00
61.4 15.5
5-6 15.52 17.98 9 0.00 0.00 100.00 2 0.00 15.52 1.00 0.00
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Project at a Glance
Year D. S. C. R. Debt / Equity Total Retu Profitability Ratio Assets Curre
- as- Net rn on Turnov nt
Depos Equity Worth Net er Ratio
its Wort Ratio
Debt h
Individ Cumula Overa GPM PBT PAT Net P/V
ual tive ll Contri Ratio
bution
(Number of
(Number of times) times) % % % % % %
Initia
l 3.00 3.00
1- 14.39 363.5 33.17
2 1.34 1.34 1.61 1.61 2.33 % 7.29% 5.25% 8 % 1.94 0.94
16.32 424.1 33.16
2-3 1.62 1.48 0.80 0.80 1.35 % 10.51% 6.98% 1 % 2.11 1.24
17.62 484.6 33.16
3-4 1.96 1.62 1.96 0.36 0.36 0.80 % 12.80% 8.25% 9 % 2.15 1.59
18.50 545.2 33.16
4-5 2.37 1.79 0.13 0.13 0.48 % 14.44% 9.19% 8 % 2.10 1.99
19.09 605.8 33.16
5-6 2.86 1.96 0.00 0.00 0.29 % 15.62% 9.88% 6 % 2.00 3.24
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Project at a Glance
BEP
BEP - Maximum Utilisation Year 5
Cash BEP (% of Installed Capacity) 48.18%
Total BEP (% of Installed Capacity) 52.91%
IRR, PAYBACK and FACR
Internal Rate of Return .. ( In %age ) 25.52%
2 Years 6
Payback Period of the Project is ( In Years ) Months
Fixed Assets Coverage Ratio ( No. of times ) 7.052
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Major Queries/Questions Answered in the Report?
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5. What is the structure of the Grease & Lube Oil
Blending Plant and who are the key/major
players ?
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9. Who are the Suppliers and Manufacturers of Plant
& Machinery for setting up Grease & Lube Oil
Blending Plant?
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13. What is the total size of land required for setting up
Grease & Lube Oil Blending Plant?
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18. What are the Personnel (Manpower) Requirements
for setting up Grease & Lube Oil Blending Plant?
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23. What are the Profitability Ratios of Grease & Lube
Oil Blending Plant?
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27. What are the Market Opportunities for setting
up Grease & Lube Oil Blending Plant?
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Table of Contents
of the
Project Report
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1. Project Location
2. Introduction of Lubricants
4. Type of Lubricants
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4.3. Solid Lubricants
4.4. Aqueous Lubrication
7. Formulations of Lubricant
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7.1. Problems with Interactions
7.2. Meeting Performance Requirements
7.3. Relationship of Additives and Base Stocks
7.4. Formulation
7.5. Examples of Lubricant Additives
8.1. Facilities
8.2. Lubricants Blending
8.3. Small Package Filling
8.4. Drum Filling
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13. Market Survey for Lubricants
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17. Characteristics of Grease
18.1. Thickener
18.2. Additives
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23. Continuous Grease Process
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28. B.I.S. Specification of Grease
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Project Financials
• Project at a Glance Annexure
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• Plant & Machinery……………………………………………..……..5
Indigenous Machineries
Other Machineries (Miscellaneous, Laboratory etc.)
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• Overheads Required Per Month and Per Annum………….…….…8
Utilities & Overheads (Power, Water and Fuel Expenses etc.)
Royalty and Other Charges
Selling and Distribution Expenses
• Share Capital…………………………………………………….....11
Equity Capital
Preference Share Capital
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• Annexure 1 :: Cost of Project and Means of Finance
Revenue/Income/Realisation
Expenses/Cost of Products/Services/Items
Gross Profit
Financial Charges
Total Cost of Sales
Net Profit After Taxes
Net Cash Accruals
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• Annexure 3 :: Assessment of Working Capital requirements
Current Assets
Gross Working Capital
Current Liabilities
Net Working Capital
Working Note for Calculation of Work-in-process
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• Annexure 5 :: Projected Balance Sheets
D.S.C.R
Earnings Per Share (EPS)
Debt Equity Ratio
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• Annexure 7 :: Break-Even Analysis
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• Annexure 8 to 11 :: Sensitivity Analysis-Price/Volume
Resultant N.P.B.T
Resultant D.S.C.R
Resultant PV Ratio
Resultant DER
Resultant ROI
Resultant BEP
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• Annexure 12 :: Shareholding Pattern and Stake Status
Equity Capital
Preference Share Capital
• Annexure 13 :: Quantitative Details-Output/Sales/Stocks
Determined Capacity P.A of Products/Services
Achievable Efficiency/Yield % of Products/Services/Items
Net Usable Load/Capacity of Products/Services/Items
Expected Sales/ Revenue/ Income of Products/ Services/
Items
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• Annexure 14 :: Product wise Domestic Sales
Realisation
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• Annexure 21 :: Employees Expenses
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• Annexure 29 :: Depreciation Charges – as per Books (Total)
• Annexure 30 :: Depreciation Charges – as per Books (P &
M)
• Annexure 31 :: Depreciation Charges - as per IT Act WDV
(Total)
• Annexure 32 :: Depreciation Charges - as per IT Act WDV
(P & M)
• Annexure 33 :: Interest and Repayment - Term Loans
• Annexure 34 :: Tax on Profits
• Annexure 35 :: Projected Pay-Back Period and IRR
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Lubricants & Greases Manufacturing
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