In Conversation: Donald Anderson

ZW: Could you elaborate on your global standing as well as any acquisitions in the recent past?

Donald: In finished lubricants, Shell has a 13 per cent market share in volume terms globally, making us the leaders in this segment. Our growth has been driven by our ability to capitalize on emerging markets as well as recent acquisitions which include the complete buy out of Pennzoil Quaker State Company in 2002, which incidentally is the number one US lubricant company, and we also acquired a 75 per cent stake in Chinese firm Tongyi in 2006. Tongyi incidentally happens to be one of the leading Chinese brands of lubes and now Shell is the leading international supplier of lubricants in the market and has the third largest share of the rapidly growing Chinese market.Our target in any country is to achieve a 15 per cent marketshare, and that is our target for the Indian market as well.

I should add that the present global market scenario has taken a double whammy of sorts with the oil price rise earlier in the year as well as the present credit crunch. It's a little tight right now for everyone, and though this situation has resulted in an increase in lube prices, we see that scenario balancing itself out in time to come.

ZW: Speaking about India , what is your strategy here?

Donald: Our strategy for India is similar to other BRIC countries. We are already present just about every market segment and we have different brands to cater to each. Shell Helix is predominantly for the passenger car market, Shell Advance caters to the two wheeler segment and Shell Rimula is for trucks and heavy diesels.

I am also working on the integration of the Shell and Pennzoil businesses in India . The supply chain is already in place, and we have seen that Pennzoil is strong in the agriculture sector, so we are looking at effective measures along these lines as well.With the way the Indian market is shaping up, we are actually concentrating on building the brand. There is also the need to educate people on the importance of lubricants. Lubes are literally like the blood of a vehicle, and despite the importance, vehicle owners often overlook the need to go with the right type of lubricant. This needs to change

ZW: Are there any retail plans on the cards?

Donald: We are not going to do a conventional retail outlet set up here, so the answer would be no, we don't have any retail plans for India .

The infrastructure is difficult and the Indian market does not work like the west. Even Shell petrol pumps are few and restricted amount in the country at present. Our strategy is more of a supply system to retailers. We sell in the 'bazaar' trade and franchise workshops with whom we share a tie up at the manufacturer level. By being present at that level, it affords a more direct out reach.

To ensure quality, we conduct a lot of testing and have programs with dealers and distributors to make sure our product is right.

ZW: What has your experience been, dealing with Indian conditions?

Donald: India is a tough condition to operate in. Our products need to work in the cold weather of Kashmir and in the heat of the Northern Plains. The regular driving conditions in India mean that the equipment and machinery is regularly stressed and our lubricants have to handle that pressure as well.

The way forward is synthetic lubricants, which are able to take on high stress levels, but due to the higher cost, synthetic lubes are yet to catch on in a big way. The customer still needs to learn about the benefits and this takes me back to the point of education on lubes.

ZW: Does that mean you have had to develop India specific products?

Donald: Our experience from 120 countries gives us more than enough permutations and combinations to handle just about every market. We have a global catalogue of products and this allows us to cover different zones with ease.

Having said that, there are some customized machinery out in the market that require us to tweak our products to suit their needs, but on the whole, we really don't have to develop country specific lubes.

ZW: How about dealing with specific scenarios like CNG vehicles?

Donald: We have CNG specific oils available, but as you know, CNG in India is predominantly used in the public transport sector and buying on price is still the dominating factor for this segment of the market. It's about cost cutting, so saving on lube costs also adds up for this sector.

ZW: Lastly, Shell has a big presence in Motorsport. Is there anything for India in this regard?

Donald: Globally we are very big in terms of Motorsport. Our logo is out there on the Ferrari F1 cars and we have partnered them for decades. In MotoGP we partner Ducati and our presence can also be seen at LeMans on the Audi racer as well as on the Skoda and Suzuki cars in WRC.

Our active presence in motorsport allows us to use the various conditions from the different races as the ultimate testing bed for our products. It's an important part of our brand building exercise.

As far as India is concerned, we will be active once the F1 races come here in 2010-2011, depending on when the schedule finally gets decided. We believe in high profile events, and once these appear in India , you will surely find us as part of them.