Collaborate or perish!

May 26, 2014 9:07 am

“In my experience, more innovative companies are the ones naturally collaborative and can run technologies in the market. The companies who don’t want to collaborate with the partners are only getting 50 per cent of the opportunity,” says Dr Cameron Watson, General Manager-OEM & Direct Sector, Shell
 Emphasised on cross-industry co-engineering as the fastest route to optimising fuel efficiency in lubricants for vehicles, Shell recently brought together automotive industry experts at the third edition of the Shell Lubricants Technology Lecture in India at the IIT Madras. On the sidelines of this event, Dr. Cameron Watson talks to Subhajit Roy and elaborates the need of industry-academia close collaboration.
When it comes to the Indian market, how is your approach to the OEMs?We follow an innovation application partnership approach to work with the OEMs. We have our global laboratories at the centre of our research activities which are researching into the fundamentals of lubrication, developing lubricants and working with our customers. But it’s very difficult to form partnership from a laboratory where human relations are important. Hence we have a team of dedicated individuals whose job is to work closely with the key OEMs in construction, transport and automotive sector. They form business relationships with OEMs to understand technical challenges and future opportunities and develop project with them. These projects might be delivered sometime thousands of miles away in a laboratory and all the data and transfer of knowledge happens at the local environment. Our approach is about having a network and applying global knowledge and capabilities for everyone in the world through our people. Could you talk about your ongoing projects in India?In India, we are doing a co engineering project with Tata Motors on next generation platform particularly on fuel economy. We also have a strong partnership with Daimler. We have also developed a synthetic technology for Daimler India, the trucks manufacturers in India which is appropriate for the latest generation after treatment devices and we have given very significant economic benefits to them. We actually helped them to break the records of fuel economy trucks using our technology. In addition, we have technical collaboration with TAFE where our focus is in extending oil drain interval for the engine oil to achieve reduction in Total Cost of Ownership. It adds a lot of value to their customers by providing more uptime and more productivity from the tractors.
Lubricants play key role in improving fuel economy, but what about the durability of machines?From our perspective, it’s almost impossible to separate durability and fuel economy–they are two sides of one coin. Though the customers are seeking more fuel economy but it cannot compromise on durability. So every time we do test to prove the fuel economy performance and improve the drivetrain, in parallel we conduct robust durability tests which include fuel trial, engine test or bench test. These tests are conducted to make sure that the combination of engineering in lubricants is robust. If a vehicle running with great fuel economy oil breaks down after only a few thousand kilometres- that is the worst thing an OEM can expect. So the durability is very important and we cannot separate the two from the lubricant researcher’s point of view.
What are the major challenges that the Indian OEMs are facing when it comes to adopting certain lubricants? Also, what are the challenges you face in placing any lubricant in the Indian market?Some are technical, some are cultural. India is moving extremely quickly in terms of adopting new technologies into the market. The rate of change witnessed in Europe and USA over the 40 years; India is going through the same phase in much smaller period. But still there is a natural perception to be on a way some technical advantage whether appropriate for the market. Some OEMs and customers still perceive old fashioned concept of lubricants are better if they are thicker because that’s what they were told when they were young. That was the environment I grew up in as well and having to go through a sudden mental change. So, there have been big cultural challenges. We can have some very big discussion with engineers, very much rationalised and scientific approach. OEMs can be very large, complex organisation with thousands of people working. However much we do, we only deal with the small number. So, influencing a very large organisation is a challenge.  
How open is the market about collaborative approach?OEMs often have personalities like people! I deal with OEMs all over the world and found it’s not necessarily a function for country they are in; it’s almost the corporate personality. Some companies seem to be very open to collaboration whereas some are very resistant. In my experience, more innovative companies are the ones naturally collaborative and can run technologies in the market. The companies who don’t want to collaborate with the partners are only getting 50 per cent of the opportunity. 
When you talk about Shell globally, how significant is the Indian market?We have a strong presence in Europe, North America and China. We are increasing our focus and activities in Brazil, India and Russia. We are also actively present in Indonesia. In 1993 Shell Lubricants came to India in joint venture with Bharat Petroleum in the name of Bharat Shell Ltd. The partnership lasted for more than a decade and by the end of 2007, Shell Lubricants became 100 per cent subsidiary of Royal Dutch Shell by acquiring the minority stake of Bharat Petroleum. We have made very quick progress in the Indian market since then. We have relatively smaller market share in India in comparison to other countries but we are growing fast.
What is the year on year growth, you are experiencing as the market is very huge?We have had a steady growth in this market. We have set up a state of the art blending plant in Taloja, near Mumbai. We also have a very talented and enthusiastic team in India and have placed some global experts in the country who will help, coach and mentor them.
How much you have invested in India so far?We have significantly invested in the R&D laboratory in Bangalore. We will move in to a bigger premise by the end of this year. Recently, we have also opened a motorcycle showcase in Bangalore.
What should be your roadmap for the Indian market?We have invested very heavily in our research headquarter in India. Shell Technology Centre in Bangalore (STCB) is one of the three global hubs for technology, after Houston and Amsterdam. As our business grows steadily in India, we will increase the number of people here because lubricant is a people-intensive businesses – it’s about relationship and partnership. We would also like to expand our showcase capabilities in this country to enhance partnerships associated to educating and awareness.               
What’s your take on the gas as a proposition for trucks and commercial vehicles?It’s a big question because gas as a resource has been exploited in the last few years and Shell is the biggest producer of LNG. We supply all over the world. Our leading ability is to transport large quantity of gas from resources which is often remote from customers. We consider it as a big market. Also in US, getting gas from shale gases has dramatically increased the availability of gas. And in some parts of the market we have been able to reduce the cost of gas.
Today, gas is significantly used all over the world as energy for power generation. We have also seen an increase in use of gas as transport fuel in significant part of the world. In India CNG is used quite significantly in small pockets and LNG has not been used as a transport fuel though it has huge advantages in terms of cost and machine efficiency. Shell is already running a number of projects in US on retail side and high density transport corridors. We are working with some OEMs on using LNG as a transport fuel. One of the interesting challenges with gas is, although 99.9 per cent of LNG is methane, there may some other chemical compounds which make impacts on performance. We try to educate our OEM partners about the different kind of performance they experience in different parts of the world.
Though I cannot predict future in India’s case but I do know the economics around the usages of gas. Also, the technology is changing very quickly. If India has shale gas resources and exploit them, it will enhance its energy mix.
On LNG, Shell has large research area includes extraction, transportation, and usage. Apart from the research on usage of fuel, we also analyse its impact on lubricants and engineering design. We have a research centre in Texas which is dedicated to LNG engines. We work with our partners in this very topical, viable area of research.
India is a very huge market with small car, how do look at this opportunity for such OEMs?With respect to OEMs in general, we work with partners in small cars all over the world we serve today. We see even in developed markets and the trend around car size for urban use is declining – customers are becoming increasingly sensitive in regards to choice of vehicle. We work with number OEMs specialised in the small car markets. I don’t see a problem or cultural challenges dealing in the Indian small car market – rather it’s a great place to share the innovation.  
After successful conclusion of Shell Lubricants Global Lecture Series in Chennai, what do you see next?We have taken big events in number of occasions discussing more about operational level of the technology – diving into the chemistry of passenger cars oils, engine testing etc. There we aim mostly at OEMs and big customers. This is our first event where we indulged high-level society stakeholders like academia, decision makers, media etc. So we will continue this kind of series in major markets in the world and will be looking at markets in USA, Europe and Brazil.
In India, we plan to continue this engagement on an ongoing basis. This is about communicating or high-level messaging and contribution to the society. While we will continue to talk about our projects and product launches to engage with our stakeholders, this too shall be one of the important mediums to engage with them.
Though I cannot predict future in India’s case but I do know the economics around the usages of gas. Also, the technology is changing very quickly. If India has shale gas resources and exploit them, it will enhance its energy mix.