Avi-Oil's office is situated in the heart of steamy, bustling New Delhi in India. We are greeted with a smile by Avi-Oil's Chief Executive, J.R. Nanda, who informs us enthusiastically and knowledgeably about the company's background. "India's defence services experienced problems purchasing lubricants because of international sanctions following our conflict with Pakistan in 1971. That was when it was realised just how vulnerable our airforce is. The lack of a mere five grams of the right oil could mean a plane being grounded."
That was why the Indian government decided that products used by the military services must be produced at home, in India. The task of determining how this could be achieved was given to J.R. Nanda, who at that time was working on research and development at the Indian Oil Corporation (IOC). He produced a feasibility report on aviation and military lubricants, which was completed in 1975. "I spent the next 20 years working for the centre that developed the formulations of the products. And we are talking about several hundred products."
J.R. Nanda says that it was fairly simple to develop the right products for military operations at sea and on land, but the aviation lubricants were more complex because of the approvals and certifications that are needed. "We had serious problems when it came to the air force," recalls J.R. Nanda. "We had to obtain approval from both the aircraft designers and the aero-engine manufacturers, something that was both time-consuming and expensive."
To obtain approval, J.R. Nanda had to demonstrate that all of the components that a certain product is produced from correspond to the aircraft and aero-engine manufacturers' specifications. Nynas Naphthenics was among the suppliers right from the start, since Avi-Oil had received recommendations for the company's products from NYCO. Finally, permission had to be obtained from the Centre of Military Air Worthiness & Certification and the Director General of Civil Aviation, the bodies responsible for such approval. Everything was achieved without a hitch since both bodies had been involved in the discussions from the outset and were also working towards the same goals as Avi-Oil.
The concept of a joint venture was started in the middle of the 1980s. "The plan was that we would get support from companies that already had contacts and approved products so that we could get our own production under way more quickly and cheaply." Avi-Oil India [P] Ltd was founded in 1993. The French company Nyco holds a 50% share in the company and provides the technical know-how when it comes to products for aviation, military and industrial equipment. Project engineering sepcialists Balmer Lawrie&Co. hold a 25 % stake and IOC, which provides marketing infrastructure and has experience of the Indian market, has a similar shareholding, 25%.
J.R. Nanda extracts a thick file from one of the office's numerous glass-fronted book cases. He leafs through it, showing copies of faxes from aircraft and aero-engine manufacturers, letters and many other documents. A plane needs between 15 and 30 different oils, greases, lubricants and protectives for its various parts. Every lubricant is exactly specified with regard to all ingredients and everything has to accord to the manufacturer's demands. "A catalogue like this takes three to five years to complete," he stresses. "And I have made one for every type of aircraft that there is in the Indian air force. In all we are talking about dozens of different models."
Avi-Oil has received lubricants and oils approvals from major aircraft manufacturers such as MiG, Kamov, Ilyushin, Sukhoi and Eurocopter, as well as from engine manufacturers such as Rolls Royce, Turbomeca, and Pratt&Whitney. Avi-Oil also supplies some customers in the civil market, primarily when it comes to helicopters. The factory housing both R&D and manufacture lies about 50km from Delhi in the village of Piyala. Around 35 employees work here and production amounts to about 1,300t.
"This is where we mix all our products," continues J.R. Nanda. "But we are also into a second phase, producing esters. This is partly for our current products, and partly to broaden our product portfolio. The idea is that from next year, we will also manufacture industrial lubricants, biodegradable lubricants and products for cosmetics, among other things. Margins will naturally be smaller with these products, but at the same time volumes will increase." "We have to earn money too!" he says, in a matter-of-fact manner. "And up to now all has gone well."
"Our profits increased by 200 percent last year compared with the year before," he adds with pride. "And that is in a highly competitive market." J. R. Nanda's secret is to make each customer reliant on Avi-Oil. "I don't want the customer even to look at another supplier! And when I say 'the customer', I mean everyone within the company, from the bottom to the top. Everyone must believe that we are best. What we are talking about is multi-level education. The man on the factory floor must feel with his fingers that the product is good and the right one. This is confidence built up from underneath. But standards must constantly be of the highest. If you leave a gap, competitors can squeeze in. That is why we constantly keep track of what new aircraft models the Indian defence is about to buy, so we can have all the papers ready in time."
In addition to looking at new products, Avi-Oil is also looking to expand outside India's borders. J.R.Nanda mentions countries such as Nepal, Sri Lanka and Bangladesh, in respect of both civil and military aviation. 1,300ts does not represent a major volume, and J. R. Nanda is the first to admit this. "Yes, it sounds ridiculously little. But remember that we produce many grades. Anything from 1 kg of one particular product to perhaps 300 tonnes of another."
What is it then that Avi-Oil makes 1 kg of a year that a plane just cannot do without? J.R. Nanda explains with a smile: "All aviation craft have instruments, and the needles are fixed in a bearing at the base. You need a few drops of a special oil there that must neither freeze nor evaporate, and which, moreover, fulfils further demands. That oil is very complicated to manufacture." "So our volumes are low, but the technology in them is very high."