Service Ind to step in lubricant manufacturing

KARACHI: Service Industries Limited, the country’s biggest footwear maker in terms of revenue, on Wednesday unveiled its plan to enter into manufacturing and marketing of automotive oil and lubricant products in order to capitalise on the rapidly growing automobile market.

The company, in a notification issued to the Pakistan Stock Exchange, said it signed an agreement with oil and gas company Total Parco to manufacture and supply lubricants, “which will enable the company to enter into the automotive engine oil market.” 

It didn’t spill out the financial or other details of this business expansion.  Service Industries Ltd sells footwear and tyre under the brand name of Servic. The company manufactures tyres and tubes for two-wheelers from its two plants located in the Punjab.

Pakistan has seen an explosive growth in the demand of two-wheelers and cars over the last few years. Sale of new cars has already crossed 200,000 units, while motorcycle manufacturing exceeded the one million mark. Import of cars is also increasing year-on-year. 

Local and foreign investors, including global leading auto players Renault-Nissan and Kia expressed their eagerness to set up car assembling plants in Pakistan to benefit from the growing appetite of automobiles in Pakistan. 

The consumption of lubricant products is also increasing. Alone production of lubricating oil surged around 11 percent to 233 million litres during the last fiscal year of 2015/16.

Service Industries enjoyed a 27 percent growth in its profitability during the nine-month period ended September 30, 2016. Its profit amounted to Rs961 million in the period as compared to Rs757 million in the corresponding period a year earlier. The company’s net sales rose eight percent to Rs14.187 billion in January-September 2016.