Covid-hit tourism sector may remain dormant for some more time: Balmer Lawrie MD

Balmer Lawrie, a Miniratna-1 PSE under Union Ministry of Petroleum and Natural Gas, has its presence in both the manufacturing and service sectors – greases and lubricants, industrial packaging, chemicals, logistics (Infrastructure, services, cold chain), travel and vacations and refinery and oil field services. In an exclusive interview with Bizz Buzz, Adika Ratna Sekhar, Chairman & MD, Balmer Lawrie, said: "The Covid-19 pandemic has undoubtedly posed unique challenges that have thrown us out of gear and affected our growth and profits deeply. Our travel and vacations business was the worst hit. There is a drop in outbound travel owing to restrictions imposed by many countries. As the corporate workforce adjusts to a more virtual and remote working environment, with significantly reduced business travel, large global events and MICE (Meetings, Incentives, Conferences & Exhibitions) tourism have nosedived and will remain dormant for some time for sure."

The Miniratna under the Union Ministry of Petroleum and Natural Gas, Balmer Lawrie is present in eight businesses - travel and vacations, industrial packaging, greases and lubricants, leather chemicals, logistics, logistics infrastructure, logistics services, and refinery and oil field services. Which of these verticals have been more severely impacted by the pandemic and how are you planning to come out of it?

We have strong presence in both the manufacturing and service sectors – greases and lubricants, industrial packaging, chemicals, logistics (Infrastructure, services, cold chain), travel and vacations and refinery and oil field services. The Covid-19 pandemic has undoubtedly posed unique challenges that have thrown us out of gear and affected our growth and profits deeply. The lockdown has impacted businesses significantly. However, amidst all the challenges, we managed to remain a profitable organisation. We ensured business continuity in most of our businesses during the lockdown, with logistics infrastructure and services being fully operational and catering to all customer needs round the clock.

Our travel and vacations business was the worst hit. There is a drop in outbound travel owing to restrictions imposed by many countries. Group and leisure travel have almost stopped owing to the fear of being infected. Air travel has fallen drastically affecting the topline of airlines and have forced air carriers to operate under 'survival mode'. There is widespread loss of jobs and the health of the industry has been affected very badly. This has resulted in less incentive, commission and PLB for us. As the corporate workforce adjusts to a more virtual and remote working environment, with significantly reduced business travel, large global events and MICE (Meetings, Incentives, Conferences and Exhibitions) tourism have nosedived and will remain dormant for some time for sure.

The container freight stations (CFS) business of the logistics SBU had been suffering for quite some time. Any plans on that?

Balmer Lawrie is a significant player in the logistics segment with state-of-the-art Container Freight Stations (CFSs) at Mumbai, Kolkata and Chennai and warehouses at Kolkata, Visakhapatnam and Coimbatore. In the CFS vertical, the business comes primarily from the private sector for Balmer Lawrie. I agree that there is pressure on our CFS business. To combat this, we are finding alternative avenues for generating revenue. We are pitching to customers as an end-to-end logistics service provider with state-of-the-art infrastructure backed by best in class services.

Mumbai and Kolkata CFSs are mostly dependent on shipping lines and NVOCCs (Non-Vessel Owning Common Carrier) for business. However, business in Chennai, for CFS, is influenced by CHAs, forwarders and importers. The major products being moved at these three locations are steel and metal products, plastics, chemicals, etc. Gypsum, scrap, bitumen and sulphur products are mainly imported from Middle East countries. Automobile parts, fresh fruits and machinery are mainly imported from European and Far East countries.

Our Mumbai CFS, which is in Dronagiri, is linked to JNPT Port, which caters to the requirements of the industrial hub of Maharashtra, North India and part of Gujarat. It has good hinterland connectivity through road and rail networks. Kolkata Port serves Nepal, Orissa, Chhattisgarh, Jharkhand and part of North India. Chennai port serves northern part of Tamil Nadu, southern part of coastal Andhra Pradesh and most of the industrial hubs located nearby.

In conjunction with our Logistics Services vertical, we offer last mile connectivity to our customers. This service is provided to those customers who seek a single point solution from Balmer Lawrie for their entire logistics need. Our Logistics Infrastructure assets backed by a strong presence in domestic and international freight forwarding – enable Balmer Lawrie to be one stop shop for Logistics solutions. As an accredited IATA agent, it handles both inbound and outbound cargo including normal, over dimensional, perishable, temperature sensitive and dangerous consignments. Balmer Lawrie has been providing door deliveries for its customers, for all kinds of cargo, where the Company acts as a single agent for the customer using multimodal logistics to optimise the cost for them. Balmer Lawrie has also set up a Multimodal Logistics Hub (MMLH) at Visakhapatnam in a Joint Venture with Visakhapatnam Port Trust. The MMLH has Rail/Road connectivity and a customer can also store his cargo in the state-of the art warehouses including TCWs, thus, helping them distribute their products domestically as well as export the cargo from this facility.

You had also been looking at new product lines at your Kolkata plant. What kind of product lines? Have you moved ahead in this direction?

In Kolkata we have the Greases & Lubricants plant with its R&D Centre, the Applications Research Laboratory (ARL). The R&D Centre is committed to maintaining cost competitiveness and achieving technological leadership through introduction of innovative products, product upgradation and value engineering. The major thrust areas for R&D are high performance and speciality products for niche markets, with focus on biodegradable and eco-friendly lubricants. The R&D Centre is also involved in collaborative research with leading research organizations and institutes.

The R&D Centre is engaged in the development of various high performance lubricants with critical application parameters like high temperature, extreme pressure, low temperature and long life lubrication. Currently, the centre is focusing on development of synthetic, eco-friendly / biodegradable and food grade greases and lubricating oils. The R&D Centre is instrumental in developing various speciality lubricants and providing innovative lubrication solutions to the core sectors like Steel, Defence, Railways, Mines and Sponge Iron. ARL has been continually working on providing best-in-class, environment-friendly tribological solutions, which are at par with the competition.

It continuously works very closely with customers and original equipment manufacturers to develop speciality lubricants, meeting their precise quality standards. Working with the sales and marketing team, it has developed and commercialised new generation of lubricants, especially bio-degradable and environment-friendly products. The new generation 'Balmerol' lubricants provide not only unmatched performance, but also have minimal impact on the environment. While some of the long life products specially designed for the automotive sector surpass 1,50,000 KM, others in the two-wheeler segment cross 50,000 KM. ARL also prides on patented synthetic mould oil for steel industries, API CJ4 engine oil, energy efficient synthetic industrial gear oil and a host of other new products and solutions. Besides speciality and contemporary products, the 'Balmerol' range also includes conventional products for all sectors.

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