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Base-oil & Supply 360

The procurement lens — imported base oil (the key cost driver), additives, domestic base oil, packaging & freight spend, terms and supply risk, with the cash and continuity move for each input.

Valvoline Cummins Private Limited · FY25 (Apr'24–Mar'25, audited)

Leading MNC / private aftermarket lubricants brand in India — single-digit share, premiumising

500 employees · 1 plant + regional DCs · 6 export markets

▲ Executive read· the answer, then the moves

Stretching to terms frees ₹22 Cr of cash at no cost to profit — DPO sits at 45d vs the 50-day target. Capture it, secure the 4 at-risk inputs (imported base oil the key cost driver, crude + USD/INR exposed), and consolidate the top tier before prices spike.

4 of 4 headline metrics improving vs prior · still off target: DPO (Days Payable) 45d vs 50d, Gross Margin 31.0% vs 33.0%, Total Revenue ₹2,361 Cr vs ₹2,650 Cr

Do now — ranked by urgency

1
Secure the 4 at-risk inputsWatch
Why it matters
Imported base oil (Group II/III, Aramco) & Additive packages (Lubrizol / Infineum / Afton / Oronite) & Domestic base oil (Group I/II) & Freight & warehousing carry medium+ supply risk and softer delivery — a single shortfall can stall blending or dispatch.
What's driving it
4 of 6 inputs at medium+ risk
Avg OTIF 94% across the panel
FYI
Lock base-oil / additive tie-ups and qualify alternate sources before a price spike
Owner: Procurement (Base Oil & Additives)
Plan sourcing →
2
Stretch to terms — free working capitalOpportunity
Why it matters
₹22 Cr of cash stays in the business by moving DPO from 45d to the 50-day target on ₹1,810 Cr of spend — no hit to margin.
What's driving it
DPO 45d vs 50d target
₹1,810 Cr spend across 6 partners
FYI
Early-pay discount capture ≈ 0% today — switch it on
Owner: CFO · Treasury
Capture cash →
3
Consolidate the top tier for rebate and priority supplyOpportunity
Why it matters
Imported base oil (Group II/III, Aramco) (₹900 Cr) and Additive packages (Lubrizol / Infineum / Afton / Oronite) (₹330 Cr) are 68% of spend — concentrating volume earns rebates and priority allocation.
What's driving it
Top two partners = ₹1,230 Cr (68% of ₹1,810 Cr)
6 partners total
FYI
Negotiation priority for the next term cycle
Owner: Procurement · CFO
Negotiate →

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● LiveBuilt forCFO · Treasury· free cash via payment termsChief Procurement Officer (Base Oil & Additives)· consolidate spend & cut riskAmbernath plant· protect input continuity

₹1,810 Cr of imported & domestic base oil, additives, packaging & freight runs through 6 input lines — imported base oil the single biggest line and the key cost driver (~55-60% of base oil is imported, crude + USD/INR exposed; Aramco parentage brings sourcing synergy). This view turns that into two moves: a ₹22 Cr cash release from stretching to terms, and a secure-supply plan for the 4 inputs whose risk could stall blending or dispatch.

Data backing: supplier (spend, score, OTIF, reject %, DPO, risk) · kpi.dpo · kpi.revenue/gross_margin

Total spend

₹1,810 Cr

6 partners

Days to pay (DPO)

45d

target 50d

Cash from terms

₹22 Cr

stretch to 50d

Avg on-time (OTIF)

94%

delivery reliability

At supply risk

medium+ risk

Where the money goes

Spend by input

Two inputs are 68% of spend — the negotiation priorities.

The two moves

What to do this quarter

Stretch to terms — free cash

₹22 Cr

DPO 45d → 50d on ₹1,810 Cr of spend, plus switch on early-pay discount capture (≈0% today). No hit to profit.

Owner: Group CFO · Treasury

Secure the supply

4 inputs

Imported base oil (Group II/III, Aramco) & Additive packages (Lubrizol / Infineum / Afton / Oronite) & Domestic base oil (Group I/II) & Freight & warehousing carry elevated supply risk and softer delivery — lock volumes / qualify alternates before prices spike.

Owner: Procurement (Base Oil & Additives)

Consolidate the top tier

₹1,230 Cr

Imported base oil (Group II/III, Aramco) (₹900 Cr) and Additive packages (Lubrizol / Infineum / Afton / Oronite) (₹330 Cr) — concentrate volume for rebates and priority allocation.

Owner: Procurement · CFO

Partner by partner

Supplier scorecards

Each card: spend, reliability and the specific move.

Imported base oil (Group II/III, Aramco)

Base oil — imported · ₹900 Cr spend

High

Score

OTIF

95%

Reject

0.5%

DPO

45d

Move: Secure supply — high risk, OTIF 95%. Lock volumes and qualify alternates on the most exposed inputs before a base-oil (crude / USD-INR), additive or freight price spike stretches supply.

Additive packages (Lubrizol / Infineum / Afton / Oronite)

Additives · ₹330 Cr spend

Medium

Score

OTIF

94%

Reject

0.7%

DPO

50d

Move: Secure supply — medium risk, OTIF 94%. Lock volumes and qualify alternates on the most exposed inputs before a base-oil (crude / USD-INR), additive or freight price spike stretches supply.

Domestic base oil (Group I/II)

Base oil — domestic · ₹220 Cr spend

Medium

Score

OTIF

93%

Reject

0.6%

DPO

40d

Move: Secure supply — medium risk, OTIF 93%. Lock volumes and qualify alternates on the most exposed inputs before a base-oil (crude / USD-INR), additive or freight price spike stretches supply.

Packaging (HDPE cans, drums, metal)

Packaging · ₹160 Cr spend

Low

Score

OTIF

92%

Reject

1.1%

DPO

48d

Move: Push terms — paying in 48d vs the 50-day target. Stretching to terms on ₹160 Cr keeps cash in the business at no cost.

Freight & warehousing

Freight & logistics · ₹130 Cr spend

Medium

Score

OTIF

91%

Reject

0.8%

DPO

42d

Move: Secure supply — medium risk, OTIF 91%. Lock volumes and qualify alternates on the most exposed inputs before a base-oil (crude / USD-INR), additive or freight price spike stretches supply.

Brand royalty (Valvoline) + CIL service charge

Royalty & service charge · ₹70 Cr spend

Low

Score

OTIF

99%

Reject

DPO

30d

Move: Push terms — paying in 30d vs the 50-day target. Stretching to terms on ₹70 Cr keeps cash in the business at no cost.

The full panel

Every supplier, one row

Spend, score, delivery, terms and risk.

Supplier	Category	Spend	Score	OTIF	Reject %	DPO	Risk
Imported base oil (Group II/III, Aramco)	Base oil — imported	₹900 Cr	88	95%	0.5%	45d	High
Additive packages (Lubrizol / Infineum / Afton / Oronite)	Additives	₹330 Cr	86	94%	0.7%	50d	Medium
Domestic base oil (Group I/II)	Base oil — domestic	₹220 Cr	84	93%	0.6%	40d	Medium
Packaging (HDPE cans, drums, metal)	Packaging	₹160 Cr	85	92%	1.1%	48d	Low
Freight & warehousing	Freight & logistics	₹130 Cr	83	91%	0.8%	42d	Medium
Brand royalty (Valvoline) + CIL service charge	Royalty & service charge	₹70 Cr	90	99%	0%	30d	Low