LIOC & CPC Engage in the Bitumen business for loan period of time & they have the economies of scale compared to other players. Due to refinery CPC has the capacity to sell bitumen at a very less cost. With the import volume & relationship with foreign energy suppliers both LIOC & CPC can purchase Bitumen at a very competitive price. They are already established in this business. By liberation or issuing new licenses to new parties there will not be any impact to LIOC & CPC. New comers will not be able to compete with the CPC & LOC. Even the entering to field will be challenging due to required Capital, Infrastructure, knowledge & relationship.
Liberation of the Lubricant market in Sri Lanka done by the previous Budget. Chevron & LIOC is the market leader in Lubricant market in Sri Lanka. Chevron well establish with the good technology & brand. And LIOC also gained major market share by serving Indian vehicle segment. Though this liberalization done one year before, still no change in to the market players. Entering to lubricant market is very very challenging to a new entrants due to Branding, Technology, Investment & Infrastructure. So I don’t see impact to Lubricant market by liberating it. GL.
The following attached research report published by the Softlogic explained well on the LIOC prospects.
LINK. https://drive.google.com/file/d/0B4RW2iUTUYfZOHRVVjJ5b0tleVk/view?usp=sharing