Lub-Rref IM

INFORMATION MEMORANDUM
OF
LUB-RREF (BANGLADESH) LIMITED

Authorized Capital: BDT 1,000,000,000
(100,000,000 Ordinary Shares of BDT 10 each)
Current Paid-up Capital: BDT 285,313,480
(28,531,348 Ordinary Shares of BDT 10 each)
BSEC Approved Paid-up Capital: BDT 70.00 Crore
Paid Up Capital: 156,000,000
(15,600,000 Shares of BDT 10 each)
Lub-rref (Bangladesh) Limited

B-6 (Part) 9-10 & 23-24, BSCIC Industrial Estate, Block - A
Sagarika Road, Chittagong - 4219, Bangladesh
TABLE OF CONTENTS
Particulars
Page No.
Disclaimer
Executive Summary & Corporate Information
04
05
SECTION-I: COMPANY PROFILE OF LUB-RREF (BANGLADESH) LIMITED

Nature of Business
Business Focus
Associates, Subsidiary/related holding Company and their Core areas of business
Shareholding Structure
Board of Directors
Directors Profile
Organizational Structure
Senior Management Profile
09-10
06
06
06
07
07
08
09
09-10
SECTION II: BUSINESS PROFILE OF LUB-RREF (BANGLADESH) LIMITED

Principal Products of the Company
Production Line of Lub-rref (Bangladesh) Limited
Production Capacity and Utilization for Blending Plant
Production Capacity and Utilization for Re-refining Plant
Machinery and Equipment required for Blending Plant
Machinery and Equipment required for Re-Refinery Plant
Description of the Property
Raw Materials and Suppliers (For Blending Unit)
Raw Materials and Suppliers (For Re-Refinery Unit)
Production Process
Major Customers
Distribution of Products/Services
Market Share of Local Blending Plant
Major Competitors
Competitive Advantages of Lub-rref (Bangladesh) Limited
International Standard Lab Facilities
Certifications
11-19
11
12
13
13
13
14
14
16
16
17
17
17
17
18
18
19
19
SECTION III: LUB-OIL RE-REFINERY AND BLENDING INDUSTRY

Re-Refinery Industry Outlook
Blending Industry Outlook
Products Use and Users
Demand Analysis
Projection of Demand of the Lubricant Market
Analysis of Supply
Market Share
19-24
19
20
21
21
23
24
24
SECTION IV: THE PROJECT

Introduction
Production Capacity
Project Location
Raw Materials
Project Cost and Means of Financing
25-26
25
26
26
26
26
SECTION V: HISTORICAL FINANCIAL PERFORMANCE

Summary Of Financial Position, Financial Performance & Cash Flow
Analysis of Historical Financial Performance
27-28
27
28
Information Memorandum | 2
SECTION VI: THE OFFERING

Objectives of the Placement
Determination of Offering Price
SECTION VII: RISK FACTORS AND MANAGEMENT PERCEPTION
SECTION VIII: FUTURE PLAN
ANNEXURE
29
29
29
30-32
32
33-35
Disclaimer
This information memorandum has been prepared by First Securities Services Limited on behalf of Lubrref Bangladesh Limited based on data provided by the company, publicly available information,
internally developed data and other sources which we believe to be reliable and useful to the users. We
have taken all reasonable care to ensure that the information stated here are accurate as on the date of
this document.
Neither the Issue Manager nor any of its directors and officers shall in any way, be responsible for the
contents and no representation or warranty, expressed or implied, is made as to their accuracy,
completeness and correctness. The content of this document are not and shall not relied upon as a
promise or representation by First Securities Services Limited.
The purpose of this document is only for the issuances of ordinary shares as permitted by the
Bangladesh Securities & Exchange Commission of Bangladesh vide its letter no. ------Dated-------
EXECUTIVE SUMMARY &

CORPORATE INFORMATION
Name of the Company
Date of Incorporation
Date of Commercial Operation
Legal Status
:
:
:
:
Brand Name
Storage Capacity
Production Facility
Factory Location & Chittagong
Sales Office
:
:
:
:
Registered Office
Telephone Number
FAX Number & E-mail
Authorized Capital
Paid-up Capital
:
:
:
:
Face value of share

Board of Directors
:
:
Company Secretary
Date of Commencement of
Business
Registration Number
Auditors to the Company
:
:
Bankers / Financial Institutions

to the Company
Lawyer to the Company
:
:

November 18, 2001
2006
Public Company limited by shares. An approved unit of
Bangladesh Petroleum Corporation (BPC)
BNO (Bangladesh National Oils)
1,500 MT
Blending & Recycling
Plot No. B-6 (part), 9-10, 23-24 BSCIC Industrial Estate,
Block-A, Sagarika Road, Chittagong - 4242, Bangladesh
P.R.S Garden (2nd Floor), 42/B-1, Indira Road, West Raza
Bazar, Dhaka-1230
+88 031 751 995, 277 00 19
+88 031 751 091; info@lub-rref.com
BDT 100 Crore
BDT 28.53 Crore (BSEC Approved Paid-up Capital = 70.00
Crore)
Tk. 10/Ms. Rubaiya Nahar - Chairman
Mr. Mohammed Yousuf - Managing Director
Mr. Md. Salahuddin Yousuf Director
Mr. Md. Mofijur Rahaman Company Secretary
2006
C-4172/2001
AHMAD & AKTAR
Chartered Accountants
BCIC Bhaban (3rd Floor)
30-31, Dilkusha, C/A, Dhaka-1000
Ph: +880 2 9561289, Fax: +880 2 9564366
Southeast Bank Limited;
Industrial and Infrastructure Development Finance
Company Limited (IIDFC);
Islami Bank Bangladesh Limited;
Al Arafah Islamic Bank Limited
Mr. Morshed Ahmed Khan
Advocate Supreme Court of Bangladesh
Suite # 802, Rahat Tower
14,Biponon C/A, 7th Floor, Link Road, West Banglamotor,
Dhaka-1000, Bangladesh
Mobile: 01713013634, 01973013634
e-mail: corporate_counsel@yahoo.com
Mr. A.M. Zia Habib (Advocate)
80, Ainjibi Bhaban, Court Hill, Chittagong
Phone: 01719 487 496
e-mail: ziahabibctg@gmail.com
COMPANY PROFILE OF LUB-RREF (BANGLADESH) LIMITED
Section-I
THE COMPANY
NATURE OF BUSINESS
The principal activities of the Company are to manufacture Engine Oil, Gear Lubricants and Hydraulic Oil
and marketing these products as well.
BUSINESS FOCUS
Customer satisfaction
High quality product
Competitive pricing
Optimal utilization of available resources at all times
Optimal use of information & technology
Continuous development & growth of human capital
Every action of every person to be sincere and profit oriented
Create environment that drives intelligence amongst all involved
Shall remain socially committed and ethical Company
ASSOCIATES, SUBSIDIARY/RELATED HOLDING COMPANY AND THEIR CORE AREAS OF

BUSINESS
Lub-rref (Bangladesh) Limited has two associate companies namely
Sl. No.
Name of the Associate

Company
1.
Juldha Ship Yard Limited
2.
Companygonj Agro
Industries Limited
Relation
Nature of Business
Lub-rref is associate of Juldha

Ship Yard Limited
Lub-rref is associate of
Companygonj Agro Industries
Limited
Ship building and dry

dock yard
Agro Based Business
FINANCIAL INFORMATION (AS PER AUDITED FINANCIAL STATEMENT):

Sl.
Particulars
01
02
03
04
05
06
07
08
09
10
11
Turnover
Gross Profit
Net Profit Before Tax
Net Profit after Tax
Total Assets
Paid-up Capital
Retained Earnings
No. of Shares
Face Value
NAV per share
Earnings per Share
*Draft Financial Statement
2015*
2014
830,038,537
242,288,249
108,134,260
95,182,735
2,862,344,899
285,313,480
488,837,291
28,531,348
10
41.11
3.34
704,274,146
209,950,268
82,358,474
73,900,739
2,529,652,299
285,313,480
387,297,744
28,531,348
10
37.77
3.36
2013
512,771,340
142,298,716
71,439,573
40,303,861
2,085,922,664
156,000,000
306,387,878
15,600,000
10
54.13
2.58
2012
336,357,114
85,896,523
17,742,419
18,579,975
1,593,427,769
156,000,000
266,064,541
15,600,000
10
27.50
1.19
List of Licenses
Certificate/ License No.
Validity
Certificate of Incorporation
ISOQAR(ISO 9001:2008) Registration
Certificate
C-4172/2001
N/A
12335
2nd December 2017
TIN Certificate
VAT Certificate
Import Registration Certificate
Export Registration Certificate
Trade License
Environment Clearance Certificate
Fire License
Board of Investment Certificate
CCCI Certificate
Boiler Certificate
Bangladesh Energy Regulatory
Commission(BERC) Certificate
3922-3820-2647
N/A
24011003408
N/A
BA-147785
RA-35414
185736
30th June 2016
4774/2003/ 1711
19th October 2016
AD/CTG/1038/2006
20020106-C
N/A
M/GEN/36/1251/2015-2016
30th June, 2016
4343
19th May, 2016
BERC/POWER/LWC0756/0286/1269
15th June, 2016
GL System Certificate
Bangladesh Petroleum Corporation(BPC)
QS-7193HH
8th November, 2015
Bangladesh Accreditation Board(BAB)

Certificate
01.010.13
3rd March 2018
Explosive License
3(64)/29-12954
31/12/2016
BPC/Administration/34.21/06.2
6 (Kha)/413
SHAREHOLDING STRUCTURE
Lub-rref (Bangladesh) Limited is a Public Company limited by shares. The total invested capital by the
sponsors amounts to BDT 285,313,480 as paid-up capital consisting of 28,531,348 shares at par value of
BDT 10 each. Its authorized Share Capital is BDT 1,000,000,000 as per the financial statement dated
December 31, 2015.
THE NAMES OF THE SHAREHOLDERS ARE GIVEN BELOW:

S.L
No.
1
2
3
4
Name of Shareholder
MRS. RUBAIYA NAHAR

MR. MOHAMMED YOUSUF
MD. SALAH UDDIN YOUSUF
OTHERS
Sub Total
Status
Issued
Issued
Issued
Issued
No. of
Shares
Subscribed
2,351,770
25,909,548
20,000
250,030
28,531,348
Subscribed
Amount
(Tk.)
23,517,700
259,095,480
200,000
2,500,300
285,313,480
% of
Shareholding
Age
(Years)
59
65
Experience
(Years)
30
41
33
13
8.24%
90.81%
0.07%
0.88%
100%
BOARD OF DIRECTORS
Name
Mrs. Rubaiya Nahar
Mr. Mohammed Yousuf
Mr. Md. Salah Uddin Yousuf
Designation
Qualification
Chairman
Managing
Director
Director
Graduate
Masters in Economics
Bachelor of Business
Administration
DIRECTORS PROFILE
MRS. RUBAIYA NAHAR
Chairman since Inception
Mrs. Rubaiya Nahar was born in 1956. She completed her Graduation under Chittagong University. Mrs.
Rubaiya Nahar started her business career since establishment of Grease House Limited, one of the
pioneers Company in manufacturing of Lubricants & Greases. She was the Managing Director of Grease
House Limited and acquired vast experience in running and managing the Company. She is also serving
as a Patron of some Socio-Economic, Cultural, Philanthropic and Sports organizations.
MR. MOHAMMED YOUSUF

Managing Director since Inception
Mr. Mohammed Yousuf was born in 1950. He completed his Masters Degree from Chittagong University.
Mr. Mohammed Yousuf started his career as a lecturer in a college very early after completing his
education. After leaving his teaching profession in the year 1976 he jointly founded Homeland Chemical
Industries Limited and worked as a Partner-in-charge of marketing till 1978 and in the same year he
ventured into the lubricant business and gathered sound knowledge and expertise in the field of grease
and lubricants. He set up grease manufacturing project in Chittagong under the name & style Grease
House Limited taking financial support from Bangladesh Shilpa Bank & Islami Bank. He has obtained
foreign training in lubricant technology and attended seminars on the subject both in home and abroad.
He obtained management training conducted by ZDH & Techno net Asia and Bangladesh Petroleum
Corporation (BPC) Training Institute with reference to safety aspects in the petroleum industry and was
also trained by IMO on marine pollution and participated in seminars on quality control. Mr. Mohammed
Yousuf participated six times in Fuel & Lubricants Asia Conference in Singapore and FUCHs management
conference at Jeddah, Saudi Arabia, Shanghai, Australia and Germany. He has widely traveled various
cities/countries such as Paris, Brussels, London, Hong Kong, Singapore, Malaysia, Indonesia, China, Korea,
Thailand, Saudi Arabia, Iran, Dubai, Sharjah and India. He is actively involved in the industrialization of
the Country and is one of the founders of National Association of Small & Cottage Industries of Bangladesh
(NASCIB) and was holding its post of Vice President 3 sessions and was a member of different subcommittee of Chittagong Chamber of Commerce & Industry (CCC&I). He is also an active member of NLGI
of USA and Industrial member of Society of Tribology & Lubrication Engineering (STLE), USA. Mr.
Mohammed Yousuf is also serving as a patron of some Socio-Economic, Cultural, Philanthropic and Sports
organizations. Mr. Mohammed Yousuf was the Managing Director of FUCHs Bangladesh Limited. He
established FUCHS-GHL Lubricants Bangladesh Limited in the year 1998, a joint Venture Lube and Grease
Blending Plant with FUCHS Petrolub AG of Germany with a paid up capital of Tk. 2.50 Crore and a long
term loan of Tk. 12 Crore from Standard Chartered Bank having average turnover of Tk. 20 Crore and
served as Managing Director for 4 years. After separation from FUCHS he established Lub-rref
(Bangladesh) Limited, a state of the art project for the production of new generation Lube Base
Oil through Hydro finishing of both Refinery by-products & Spent Petroleum Oils as feedstock
with the financial help of Southeast Bank Limited and technical assistance of Zen Marketing &
Technologies, a private sector enterprise of India & also from Lubrizol, USA.
MR. MD. SALAHUDDIN YOUSUF
Director since Inception
Mr. Md. Salahuddin Yousuf was born in 1982. He obtained a Bachelor degree in Business Administration
and also looking after the business of the Company and trying to build up his business career gradually &
he will be the full-fledged future leader of the Company.
ORGANIZATIONAL STRUCTURE
ORGANOGRAM OF LUB-RREF (BANGLADESH) LIMITED
Board of Directors
Managing Director
Head of Marketing
& Operations
Chief Finance
Officer and
Company Secretary
Production Team
Sales & Marketing

Team
Administration
Team
Finance and CS
Team
SENIOR MANAGEMENT PROFILE

MR. MD. MOFIJUR RAHAMAN
CHIEF FINANACIAL OFFICER & COMPANY SECRETARY SINCE DECEMBER 2012
Mr. Mofijur Rahaman started his career with Central Insurance Co. Ltd. in Internal Audit department
from December 2008 to July 2010 as a Manager (Internal Auditor). He has joined to this company as
Manager-Finance & Treasury in December 2012. Earlier he worked with Fiber @ Home Ltd. & Suruj Miah
Group of Industries as Manager (Finance & Accounts). He has completed his Master degree in Business
Administration from Northern University in 2010 and Master degree in Business Studies from
National University in 2009. He has completed his CA course from G.Kibria & Co. in December 2008.
After Completed CA Course he also Passed Professional Examination Knowledge Level under ICAB. His
expertise in finalization of Annual Accounts, Budgeting, Financial Management, Group accounts &
reporting, Interim Accounts, Internal Audit, Cash Management, Inventory & Fixed Asset Management,
make him a strong wing for the company.
MR. A.H.M MIZANUL GAFFAR

GENERAL MANAGER, SALES AND MARKETING
With a very best Sales and Marketing management experiences 33 years over more than a decade in domestic
and multinational companies, Mr. A.H.M Mizanul Gaffar has joined to this company as General Manager Sales
and Marketing on 15th January 2015. . Earlier he worked with Aziz Group of Companies as General Manager
Sales and Marketing. Having specialty in the sales & marketing, administration, distribution, supply chain
management, installation, commissioning. Hitting the right point in decision making, ability to rightly
motivate peoples and an ever-welcoming smile stands him as an asset for the company.
DR. KHANDAKER JAKIR HOSSAIN
GENERAL MANAGER, QUALITY ASSURANCE & QUALITY CONTROL
Dr. Jakir Hossain has completed his B.Sc (Honors), M.Sc (Thesis Group-1st Class 1st) and PhD in Chemistry from
the University of Chittagong. He is looking after QA/QC, R&D (Formulations) and Blending of all lubricating Oil
of the company. He is also working as Quality Management Representative (QMR) and Quality Manager of ISO
9001:2008 and ISO/IEC 17025:2005(Lab Accreditation) respectively and provide training to marketing team on
technical aspects of lubricants. He is IRCA(International Register of Certificated Auditor) Certified Lead Auditor
and Internal Auditor for ISO 9001 and ISO 14001 and Norwegian Accreditation certified Technical Assessor for
ISO/IEC 17025:2005(Lab Accreditation) and ISO/IEC 17021:2011(Accreditation for Certification Body) and
ISO/IEC 17065(Accreditation for Product Certification Body). He has joined to this company in July 2008. He has
got more than 6 (Six) overseas training and attended so many domestic and overseas seminars in Chemistry
especially in Lubricants. He has 4 (Four) research publications in Reputed International Journal.
MR. SAJID AFTAB

HEAD OF BUSINESS DEVELOPMENT LAB DIVISION
Mr. Sajid Aftab is core expertise Business Development and Coordination, he was appointed as the
Business Development Lab Division in October 2014. He has started his grooming career in Budgens,
London, United Kingdom as an Assistant Manager. He has completed his MBA from International
University of Missouri, USA, Campus-London, United Kingdom. Earlier he worked KDS Group, Citibank
N.A as Head of General Services & Accounts Payable and Aziz Group as Chief of Staff.
MR. NAIM SIDDIQUI

MANAGER, OPERATION SINCE SEPTEMBER 2008
Mr. Naim started his career in Gemcon Group in 2000 as In-Charge, Electrical dept. Having more than 3
(Three) years of overseas job experiences in Saudi Electricity Co. (Saudi power Development, Transmission
and Distribution Company) as Electrical Maintenance Specialist makes him confident enough to lead the
company as Operation Manager. With a Diploma in Electrical Engineering from CPIB & professional
qualification in CMMS from KSA has given him strength to lead operation team of the company.
MR. RASHEDUL ISLAM

MANAGER, HR & ADMIN SINCE OCTOBER 2013
Mr. Rashed was appointed as the Manager in HR & Administration in October, 2013. Started his grooming
career in Abul Khair Group in HR & Admin department in 2009. He has completed his MBA in Human
Resource Management (HRM) from USTC and also completed PGD in HRM from Bangladesh Institute of
Management (BIM). Beside that has been continuing LLB from National University. He received many
professional training from renowned training firms. He is also a member of Bangladesh Society for Human
Resource Management (BSHRM). He has been leading HR & Administration Dept. who ensuring satisfaction
of internal customer of company and IR, HR policies & SOP, Effective Recruitment System, People
Development & Process Improvement, Performance Appraisal system, Compensation & Benefits, Employee
Engagement, Health & Safety, People welfare, Disciplinary Procedure and all the Administrative activities.
MR. MD. MOZAMMEL HOSSAIN

NATIONAL SALES MANAGER SINCE JANUARY 2007
Diversifying his expertise in Marketing Department although he has his graduation in Computer Science &
Engineering from the University of New Castle (USA). With a passion to be a sales Genius, he has been
contributing in sales function especially in the sector of Industrial Lubricants. He has brought more than 50
(Fifty) corporate clients for the company and managing corporate affairs for marketing in lubricants arena.
He has expertise database skills in MySQL & MS Access, Programming Language, C++ and Visual Basic.
MR. RUHUL AMIN
CIVIL ENGINEER SINCE JULY 2010
With a long tenure as an Engineer in Chittagong Port Authority and having more than 37 (Thirty Seven) years of
construction related experiences, Mr. Amin has been contributing his hardworking and creativeness in the ground
of civil works for the company. He has completed his Diploma degree in Civil Engineering from Comilla Polytechnic
Institute in 1972.
BUSINESS PROFILE OF LUB-RREF (BANGLADESH) LIMITED
Section - II
PRINCIPAL PRODUCTS OF THE COMPANY

Lub-rref (Bangladesh) Limited has a state-of-art Lube Oil Blending Plant (LOBP) in which a wide range
of lubricants are produced and distributed across the country of Bangladesh since December 2006.
Different types and qualities of lubricants are made as per diversified demand in the lubricant market.
The company has more than eighty five (85) types of product lines serving wide range of customers from
different sectors of the country. The product lines are divided into three categoriesA. ENGINE OIL CATEGORY
(I) PASSENGER CAR MOTOR OIL
1.
2.
3.
4.
5.
6.
BNO Heavy Duty Series BNO HD 40 API

SD/CC
BNO HD SAE-50, API SC/CC
BNO HD SAE-50, API SD/CC
BNO Heavy Duty Plus 25W-50 API CF/SF
BNO Gold SAE 20W-50, API SG/CF
BNO Bike 4T, 20W-50 API SL
7.
8.
9.
10.
11.
12.
13.
BNO CNG Special 20W-50 API SL/CF

BNO Diesel Super 15W-40, API CI-4
BNO Diesel Super 20W-50, API CI-4
BNO Diamond-Synthetic 5W-40, API SM
BNO Diamond 10W-40, API SM
BNO Diamond 10W-30 API SM
BNO Diesel Super 15W-40, API CJ-4
(II) GENERATOR OIL

1. BNO Power (G) SAE-40
2. BNO Power (D) SAE 15W-40, API CI-4
(III) MARINE ENGINE OIL
a. BNO Marine Diesel Engine Oil Series:
1. BNO Marine-30, TBN 6
b. BNO Marine TPEO Series:
1. BNO Marine TPEO-30, TBN 30
c. BNO Marine Outboard 2T-TCW3
(IV) AUTOMOTIVE GEAR OIL
1.
2.
3.
BNO Gear Oil-80, API GL-4/GL-5

4. BNO Marine- 40, TBN 15

a.
1.
2.
3.
Multi-grade Gear Oil Series:

BNO Gear Oil 80W-90, API GL-4/GL-5
B.INDUSTRIAL PRODUCT CATEGORY

(i) Hydraulic Oil
a. BNO Hydraulic AW series:
1. BNO Hydraulic AW 32
b. HVI Hydraulic Oil Series:
1. BNO HVI Hydraulic AW-32
4.
5.
6.
BNO Hydraulic AW 100

4.
5.
BNO HVI Hydraulic AW-100

BNO HVI Hydraulic AW-15
4.
5.
6.
BNO Compressor Oil 100

(II) COMPRESSOR OIL

a.
Air Compressor Oil:

1. BNO Compressor Oil 32
b. Synthetic Compressor Oil Series:
1.
2.
c.
(II)
BNO Compressor Oil Synthetic-68

BNO Compressor Oil Synthetic-46
Refrigeration Compressor Oil:

1. BNO Super Cool 46
2. BNO Super Cool 68
INDUSTRIAL GEAR OIL

a.
Industrial Gear Oil(Mineral):

1. BNO Gear 68
2. BNO Gear 100
3. BNO Gear 150
b. Synthetic Gear Oil Series:
1. BNO GearSyn-320(Synthetic Oil)
2. BNO GearSyn-460(Synthetic Oil)
4.
5.
6.
BNO Gear 220

BNO Gear 320
BNO Gear 460
4.
5.
BNO Turbine Oil 100

BNO Turbine Oil 150
6.
7.
8.
9.
BNO Machine Oil-220

BNO Machine Oil-320
BNO Machine Oil-460
BNO Machine Oil-680
(IV) BNO TURBINE OIL ROI OIL SERIES

1.
2.
3.
BNO Turbine Oil 32

BNO Turbine Oil 46
BNO Turbine Oil 68
(V) MACHINE OIL

1.
2.
3.
4.
5.
BNO Machine Oil-32

BNO Machine Oil-46
BNO Machine Oil-68
BNO Machine Oil-100
BNO Machine Oil-150
C. SPECIALTY PRODUCT CATEGORY

(V) MACHINE OIL
1.
2.
3.
BNO Machine Oil-32

BNO Machine Oil-46
BNO Machine Oil-68
4.
6. BNO
BNO Machine
Machine Oil-100
Oil-220
5.
7. BNO
BNO Machine
Machine Oil-150
Oil-320
8. BNO Machine Oil-460
PRODUCTION LINE OF LUB-RREF (BANGLADESH) LIMITED

Lub-rref (Bangladesh) Limited is mainly doing two types of business activities. One is Blending of
different types of lubricating oils as per customers demand from imported virgin base oil and additives
from world-renowned sources being done in the Blending Plant. Another is the re-refining of used lube
being collected from the industrial and automotive sectors as waste materials being carried out in an
environmentally friendly recycling plant thereby saving valuable mineral resources and hard currency.
To assist both the plants Lub-rref has set up a modern laboratory for quality control of Raw materials
and finished goods. R&D facilities have also been introduced for manufacturing research products.
Besides in-house testing the company also extends these test facilities to 3rd parties on payment basis.
Lub-rref (Bangladesh) Limited has set up modern automated Effluent Treatment Plan (ETP) through
which Used Oil, Water Layer and dirt particles can easily be separated and collected. The collected wastewater is totally consumed in the in-house process chemical digestion process, the volatile hydrocarbons
is used as burning fuel and solid and viscous residue can be used as road construction materials, wirerope oils, burning materials for brick-field. The end product obtained is nothing but a base oil(long chain
hydrocarbon) is used as lube blending oil for small engines, tractor engine, rubber processing oil, etc.
As per test report from the environment division the SOx, NOx, SPM, BOD, COD, Pathogen and sound
levels etc are in good compliance of regulatory requirement. So, nothing is wastage in Lub-rref
(Bangladesh) Ltd. The re-refining process follows totally a ZERO DISCHARGE EFFLUENT SYSTEM and
hence a green process.
PRODUCTION CAPACITY AND UTILIZATION FOR BLENDING PLANT (SINGLE SHIFT)

Capacity of Production
January 2014 to
December 2014
12,500
12,500
3,129.63
25%
Licensed Capacity - Metric Ton (MT)

Installed Capacity - Metric Ton (MT)
Capacity Utilized - Metric Ton (MT)
Capacity Utilized for the Period (%)1
January 2013 to December

2013
12,500
12,500
2,500
20%
The blending capacity shown is only for single shift (8 Hrs per day). However, for three or three shifts
four cycle in 24 Hours/ per day the capacity would be 30,000 MT and 40,000 MT per Year.
1 In
the year of 2014 and 2015, sales of BNO products increased rapidly because the major volume sold were
mono-grade products. Mono-grade products are low tier products having very low margin. As such, the
Company decided to introduce onwards multi-grade and high margin products. However, the response in this
market segment is slow but steady. Therefore, with the passage of time companys market share in the high
tire segment is expected to increase progressively providing improved margin. To become a major player
Lub-rref also needs major OEMs approval for which the Company has already applied requiring substantial
investment for this purpose.
PRODUCTION CAPACITY AND UTILIZATION FOR RE-REFINING PLANT (THREE SHIFTS)

Capacity of Production
Licensed Capacity - Metric Ton (MT)
January to December
2015
13,125
January to December
2014
13,125
Installed Capacity - Metric Ton (MT)
13,125
13,125
Capacity Utilized - Metric Ton (MT)
1,585.04
1,374
Capacity Utilized for the Period (%)2
14.16%
10.47%
2From
the above table it is also evident that capacity utilization in the re-refining plant was also very low as
compared to its installed capacity. The reason behind the same is that the project required rehabilitation
during that period for quality improvement.
MACHINERY AND EQUIPMENT REQUIRED FOR BLENDING PLANT

Machinery
Blending Equipments
Lab Equipments
Filling and Packing Machine
VM Plant and Equipment
Gas Generator
Base Oil Tank-farm
NAS Filtration System
Maker
Local
Country of
Origin
Bangladesh
Koehler/Cannon/Me
trohm
Pulse Tech
S. S. Enterprises
Waukesha
Local
USA/Europe
Foreign
UK/USA/India
Singapore
India
USA
Bangladesh
Annual Capacity (MT)

40,000 / Annum /
3 shifts 4 cycles
N/A
N/A
N/A
675 KVA
800 MT in house storage
capacity
N/A
MACHINERY AND EQUIPMENT REQUIRED FOR RE-REFINERY PLANT

Machinery
Lab Equipments
Used Oil Tank-farm
Thermal Heater
Distillation Column
Process Tank/Vessel
Pumps and Motors
Measuring Devices(14 )
DCS Unit
Electrical Sub-station
Diesel Generator
Air Compressor
ETP/Oil Separator
Maker
Country of
Origin
Annual Capacity (MT)
Koehler/Cannon/M
etrohm
Local
Thermax/
Garioninaval
Thermax
Foreign
Local
Foreign
N/A
Honeywell
Energy Pack
FC Wilson
Withington
USA/Europe
N/A
Bangladesh
India/ Italy
700 MT
6 Lacs Kilo Cal/Hr each
India
USA/India
Bangladesh
Europe/India
N/A
USA/India
Bangladesh
UK
France
1500 Kg/Hrs
2000 Ltr/Hrs
N/A
N/A
N/A
N/A
11 KV/500KVA
65 KVA
550m3/Hr
DESCRIPTION OF THE PROPERTY

The Principal Plants and Property of Lub-rref (Bangladesh) Limited mostly located at its factory at Plot
No. B-6 (part), 9-10, 23-24 BSCIC Industrial Estate, Block-A, Sagarika Road, Chittagong - 4242,
Bangladesh. The Registered office is situated at factory premise. The Company has a valuable property
located at West Potiya near the Chittagong Port of Chittagong old airport The company possesses the
following fixed assets as on December 31, 2015:
(As per Audited Accounts)
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Name of the Asset
Land & Land Development

Office Building
Air Conditioner
Computer & Computer Accessories
Fire Extinguisher
Furniture & Fixture
Vehicles
Office Equipment
Plant & Machineries
Electricity Installation
Factory Building & Shed
Factory Equipment
Gas Installation
Generator
Weighting Scale
Interior Decoration
Kitchen Equipment
Ware House, Dhaka
REVALUATION
19
Land & Land Development
20
Office Building
21
Plant & Machineries
Total
Written down value in BDT

December 31,
2015*
490,894,710
141,852,542
1,828,313
1,058,414
536,392
3,109,597
9,714,160
3,431,268
340,247,821
5,488,127
133,166,736
11,862,443
680,406
16,834,837
3,810,297
3,195,371
39,263
2,317,395
December 31,
2014
485,299,710
145,374,150
1,811,737
887,702
595,991
2,963,437
8,751,804
3,145,552
363,703,472
6,097,919
136,564,227
12,092,329
756,007
17,991,172
4,010,839
2,079,936
43,625
2,168,829
December 31,
2013
483,925,501
148,703,892
2,013,041
713,854
662,212
3,119,023
9,482,256
3,254,449
389,758,977
6,673,112
139,999,904
12,367,801
840,008
15,828,151
4,221,936
2,446,984
48,473
1,903,233
231,517,399
24,639,194
51,525,343
1,477,750,028
231,517,399
25,270,968
57,250,381
1,508,377,187
231,517,399
25,918,942
63,611,534
1,547,010,680
The above-mentioned properties are situated at Companys factory premises and are in good condition.
The plant and machinery of the Company have been owned by the Company and were purchased in
brand new condition.
THE COMPANY HAS 1,351.14 DECIMALS OF LAND AS OF 31 DECEMBER 2015 AS DETAILED
BELOW:
LAND WITH FACTORY BUILDING
I) LAND OWNED BY LUB-RREF (BANGLADESH) LIMITED :
100.20 DECIMALS
The area of the land under valuation is 100.20 Decimals. There is a factory building and other
constructions on the land. The land is located at B-9 (Part), 9-10 & 23-24, BSCIC Industrial Estate, BlockA, Sagorika Road, Pahartali, Chittagong - 4219.
LAND SITUATED AT JULDHA, KARNOFULY, CHITTAGONG
II) LAND OWNED BY LUB-RREF (BANGLADESH) LIMITED :
1,250.94 DECIMALS
The area of the land under valuation is 1,250.94 Decimals.

BUILDINGS
Description in detail and valuation of the buildings/constructions are shown as under:FACTORY BUILDING (SITE - A)
This building has a total floor area of 48,807 sft. This is a factory building built with two storied
administration building, information center, 3 nos guard room, two storied electric workshop with
dormitory, electric sub-station, two storied pump house.
Sl.
No
Name of the Structure
Nos. Of
Level
Total Area
(sft.)
Remarks
SITE - A
1.
2.
3.
4.
5.
6.
7.
Main Building (Office, lab, filling & warehouse)

Blending & V M Plant
Chemicals & Packing Materials warehouse
Utility section
Distillation (WFE) Section
Bleaching section
Filtration Section
02
04
02
01
05
05
03
20,000
4,845
4,822
2,000
5,380
2,867
1,720
8.
9.
10.
11.
12.
13.
14.
15.
16.
Electrical Workshop cum Sub- station

Dormitory
Information center cum Security building-1
Kitchen & dinning Building
Security building- 2
Base oil receiving shed
Cooling tower structure
Drum Shade (Including Product delivery area)
Tank firm base -1
Total Area (sft.) of Site - A
01
01
01
01
02
01
01
01
01
1,073
1,073
275
550
150
753
415
1,250
1,634
48,807
Concrete structure
Steel structure
Steel structure
Steel structure
Steel structure
Steel structure
Concrete & Steel
structure
Concrete structure
Concrete structure
Concrete structure
Concrete structure
Concrete structure
Concrete structure
Concrete structure
Steel structure
Concrete structure
FACTORY BUILDING (SITE - B)

This building has a total floor area of 13,795 sft. This is a factory building built with two-storied
building, chemical shed, water reserve tank, refinery & process shed and base oil receiving shed.
Sl.
No.
Name of the Structure
Nos. Of
Level
SITE - B
Used oil Processing Plant
Control room site - B (security, chemical
room)
Used oil receiving shedTank firm base - 2
Tank firm base - 3
Total Area (sft.) of Site - B
1.
2.
3.
4.
5.
Total Area
(sft.)
03
03
8,418
986
01
01
01
550
3,291
550
13,795
Remarks
Steel structure
Concrete & Steel
structure
Concrete structure
Concrete structure
Concrete structure
All the above-mentioned properties are owned by the company. A total of 892.59 decimal of land of the
Company are under registered mortgaged to the lending bank namely Southeast Bank Limited, Jublee
Road, Ctg. Details of land under mortgage are as under:
Particulars
Area (Decimal)
Site-A
Site-B
Juldha, Kornofully
Juldha, Kornofully
80.20
20.05
735
57.34
892.59
Total
RAW MATERIALS AND SUPPLIERS (FOR BLENDING UNIT)

The major raw materials of blending unit are Base Oil, Additives and Solid Viscosity Improver (VI). Additive and
Solid VM requirement are met through 100% import from the international market. List of major raw material
suppliers are given below:
Sl. No.
Company
Country
1.
Exxonmoble, MJL, Thai Petroleum
2.
Chevron Oronites, Infineum,

Lubrizol etc
USA/ UK/
Europe/Thailand
Europe/Asia and
Middle East
Base Oil
Raw Materials
Additives
Solid VM
There are also local raw and packing materials suppliers which include Drum with painting, Sticker and drum cap.
List of local raw material suppliers are given below:
Sl. No.
Local Suppliers
Type of Raw Materials
1.
2.
Local
Local
Lab Reagents
Packing Materials
RAW MATERIALS AND SUPPLIERS (FOR RE-REFINERY UNIT)

The major raw materials of blending unit are used base Oil. List of major raw material suppliers are
given below:
Sl. No.
1.
2.
3.
4.
5.
6.
7.
8.
Company
Chevron Bangladesh
Railway
BCIS
Armed Forces
Power Generation Companies
Santos Bangladesh
Others
Local/Foreign
Country
Raw Materials
Local
Local
Local
Local
Local
Local
Local
India/Local/USA
Used Oil
Used Oil
Used Oil
Used Oil
Used Oil
Used Oil
Used Oil
Process Chemicals
PRODUCTION PROCESS
FOR BLENDING UNIT:
Base Oil drawing to Blending Kettle through DCS > Additive dosing> Blending at blending Temperature
> QC Test and Pass> Filling and Packing > Finished Product Storage> Market/Sale
FOR RE-REFINERY UNIT:
Used Oil homogenization> De-gasifying and dehydration> Distillation >Finishing
MAJOR CUSTOMERS
The export of lubricants from Bangladesh remains banned for a long time. The Company applied for
export permission which has duly approved by tariff commission which is now awaiting a gadget
notification from Ministry of Commerce. With the availability of the permission, the Companys export
potential will increase to a great extent to the neighboring countries including African market. At
present, majority of the customers of the Company are local buyers.
Sl. No.
1.
2.
3.
4.
Customer Category
Industrial Product Users
Engine & Marine Product Users
Special Product Users
Own Consumption
Percentage (%)
38%
59.50%
2%
0.50%
DISTRIBUTION OF PRODUCTS/SERVICES
Lub-rref (Bangladesh) Limited has distributed its products through wholesalers and directly to the
industrial buyers. Currently the company appointed 49 wholesalers to sale the products throughout the
country. Moreover, Lub-rref has supplied directly to more than 35 industrial buyers. Own distribution
infrastructure of Lub-rref includes main depot in Chittagong, one depot in Dhaka and one depot in
Bogra. Other than that two depots are under construction in Chittagong and Dhaka. Sales are made
against A/C Payee cheques and against Demand Draft or Payment order for wholesalers and industrial
buyers so there is no scope for irrecoverable debts. Lub-rref has four delivery vans for smooth delivery
of products to its customers. The customers are mainly located at Dhaka, Chittagong and North Bengal.
MARKET SHARE OF LOCAL BLENDING PLANT

The Company wise approximate market shares in terms of sale volume are mentioned below
Sl.
No.
Original Brand
Company
Manufacturer/ Distributor
Market
Share (%)
Import/Blending Status of Marketer
MJL & Jamuna Oil Co. Ltd.
29%
MJL is licensee blender of Exxon-Mobil
EXXON-MOBIL, USA
2.
British Petroleum
(BP), UK.
Meghna Petroleum Ltd.
11%
Some products 3rd party toll blended locally
3.
Fuchs, Germany
Lubricants Asia Limited
8%
Licensee blender of Fuchs
4.
TOTAL, France
Padma Oil Co. Ltd.
6%
Some products 3rd party toll blended locally
5.
BNO
Lub-rref (BD) Ltd.
4%
Licensee blender of BPC
6.
SINO, Singapore
Pacific Oil Co. Ltd.
6%
Licensee blender of A.P. Oil International,

Singapore
7.
Castrol, UK
Rahm Afrooz
2%
Importer
8.
Caltex, USA
Navana Petroleum Limited
2%
Importer
9.
Shell, UK Holland
Rangs Petroleum Ltd.
2%
Importer
10.
Other many Global

Companies
Rest of Distributors
30%
Many Blender Recyclers & Importer
MAJOR COMPETITORS
Within a span of a decade almost all big global petroleum & Lube companies e.g. BP, Caltex, Chevron,
Conoco Philips, Agip, BNO, Fuchs, Cepsa, total, Shell, Exxon-Mobil, Gulf, Castrol & Some Bangladeshi
brand companies have more or less consolidated their market position here. At present at least 65
market players, 11 blenders & 3 used lube oil re-cyclers are active in this highly competitive market. The
main competitors of Lub-rref (Bangladesh) Limited are as under:
Sl.No.
Company Name
Brand Name
1.
Megna Petroleum Limited
BP
2.
Padma Oil Company
3.
Gulf Oil Bangladesh Limited
4.
Rahimafrooz Distribution Limited
CASTROL
5.
Petrolub Limited
CONOCO
6.
Fuchs BD Limited
FUCHS
7.
Ranks Petroleum Limited
SHELL
8.
Navana Petroleum Limited
CALTEX
9.
Pacific Oil
TOTAL
GULF
SINO
COMPETITIVE ADVANTAGES OF LUB-RREF (BANGLADESH) LIMITED

Lub-rref is truly a National Brand. The company has its own environmentally friendly recycling plant
and waste oil management system. At present, Lub-rref produces VM (Brand BNO 249A) which is an
important and costly ingredient for multi-grade and other high quality products.
Lub-rref has a few competitive advantages over its competitors. These competitive advantages are
It has introduced technology rather than merely products;

Assurance to supply any quantity of quality products at any times as per customers demand;
Modern lab facilities for Quality Assurance of products;
Global good position in test results in ASTM Cross-check program for lube oil testing;
ISO 9001:2008 Certified;
Germanischer Lloyd Certification for products and system;
ISO/IEC 17025:2005 for Laboratory Management System;
3rd party test facilities on payment basis;
In-service oil condition monitoring services to customers on free terms;
Assurance to provide NAS 0-3 micro-level clean oil;
Competitive prices;
Wide range of products including latest API claimed diesel and gasoline engine oil like API CJ-4/SN;
Own VM preparation facilities;
Environmentally friendly recycling plant and zero discharge effluent system.
Some of the key competitive advantages are elaborated below ASTM (AMERICAN SOCIETY FOR TESTING MATERIAL)
Lub-rref is one of the participant in ASTM Inter-laboratory Crosscheck Program with excellent
accuracy and precision in test results in global scale. ASTM sends unknown lubricating oil sample to
the renowned laboratories of the world including two laboratories from Bangladesh; Lube-rref
(Bangladesh) Limited and Mobil Jamuna (Bangladesh) Limited for testing. Individual laboratories
get results published with respective laboratory code numbers notified by ASTM authority through
e-mail.
NAS/ISO STANDARD MICRO-CLEAN OIL (NAS 0-3)

Lub-rref introduced National Aerospace Standard (NAS) micro-level clean oil specially, hydraulic
oils, turbine oils, compressor oils and so on. Micro-clean oil is necessary for servo valves, which
extends the life of machinery. It is a membrane filtration system to remove humanly invisible
particles available in any fluid.
INTERNATIONAL STANDARD LAB FACILITY

Lub-rref has international standard lab facility. The modern laboratory equipment mostly
imported from America and Europe. Test details are Sl. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Test Name
Test Reference No.
Kinematic Viscosity at 40C

ASTM D445, ASTM D7042, IP 71, ISO 3104
Kinematic Viscosity at 100C
ASTM D445, ASTM D7042, IP 71, ISO 3104
TAN (Total Acid Number)
ASTM D664
TBN (Total Base Number)
ASTM D2896
Neutralization Number
ASTM D974
COC Flash Point
ASTM D92, IP 36, ISO 2592
PMCC Flash Point
Water Presence By Crackle Test
Water Content By Dean-Stark
ASTM D95
Moisture Content By Karl Fischer
ASTM D1533, ASTM D6304
Rams Bottom Carbon Residue
ASTM D524, IP 14, ISO 4262
Conradson Carbon Residue
ASTM D189
Pour Point
Foam Test For Sequence I
ASTM D892, IP 146
Foam Test For Sequence II
ASTM D892, IP 146
Foam Test For Sequence III
ASTM D892, IP 146
Water Separability
ASTM D1401, ISO 6614
Sulphated Ash
ASTM D874
ASTM Color Value (Automatic)
ASTM D1500, ISO 4630
Oxidation Stability
ASTM D943, ISO 4263
Cold Cranking Simulator (CCS) Viscosity
ASTM D5293
Metal Content (Fe, Al, Cr, Cu, Pb, Sn,
ASTM D4951, ASTM D5185
Si, P, S, Zn, Ca, Mg etc.) By ICPOES
Load Break of Insulating Oil
ASTM D 877
Reid Vapor Pressure Test
ASTM D 323,
Copper Strip Tarnish Test
ASTM D130, IP 154
Aniline Point Test
ASTM D 611, IP 2
Sediment (Toluene insoluble)
Analytical
Particle Counter
NAS/ISO
LUB-OIL RE-REFINERY AND BLENDING INDUSTRY
Testing Fee in Tk.

Charge
VAT
Total
565.00 (15%)
85.00
650.00
565.00
85.00
650.00
1020.00
153.00
1173.00
1020.00
153.00
1173.00
1440.00
216.00
1656.00
600.00
90.00
690.00
600.00
90.00
690.00
240.00
36.00
276.00
1020.00
153.00
1173.00
1200.00
180.00
1380.00
1440.00
216.00
1656.00
600.00
90.00
690.00
960.00
144.00
1104.00
960.00
144.00
1104.00
960.00
144.00
1104.00
960.00
144.00
1104.00
1020.00
153.00
1173.00
1020.00
153.00
1173.00
600.00
90.00
690.00
9000.00
1350.00 10350.00
1440.00
216.00
1656.00
3000.00
450.00
3450.00
2160.00
720.00
1020.00
1020.00
870.00
3000.00
324.00
108.00
153.00
153.00
130.00
450.00
2484.00
828.00
1173.00
1173.00
1000.00
3450.00
Section-III
RE-REFINERY INDUSTRY OUTLOOK

Re-refining of used lubricating oil in an environmentally friendly way saves energy, money, health and
environment. In general, lubricating oil contains 85-90% Base Oil and 10-15% Additives. The base oils is
mainly hydrocarbons having carbon skeleton C20-C51 collected from crude oils through refining
process. But not all crudes of the world contains this base oils. Only 4-5% crude of the world contains
base oils and after complete refining process only 3-4% base oils is collected which is called virgin base
oils. On the other hand, additives are mostly organometallic compounds which are present in small
quantity in lubricating oils as performance chemicals. These additives are less stable than base oils.
During operations it is this additives part along with some loosely bonded hydrocarbons which
degraded gradually due to oxidation to form carbon particle which causes the black color of the used
lube oils. It is noticed that at the end of the life cycle almost the same initial amount of used oils are
discharged which generally contains broken and unbroken hydrocarbons(major), additives, carbons,
dirt, water and volatile materials etc as impurities. In re-refining technology these broken-unbroken
additives and other impurities are removed through physico-chemical process and the yield is the Base
oil portion (60-70%).
As per chemistry is concerned, this base oil is very stable towards oxidation and can be re-cycled as
many times as possible. Besides, disposal of used oil is a great concern to world. Because, used
lubricating oil pollutes water, soil and air environment. It was reported in a journal that One Litre of
Used Oil make One Million Litres of fresh water unsafe. It cannot be even dumped as it contaminates
soil and water, or burned directly as it releases hazardous gases and particulate matter or hydrocarbon
emissions to the air environment which is harmful for human being and marine or aquatic lives. So,
recycling of used oil is the only option from both economic and environmental point of view which is
accepted worldwide. In US Military Act it is mandatory to use recycled oil in 25% of the branded oils.
In Bangladesh the yearly lube oil consumption is around One (01) Lac MT. So, minimum One (01) Lac
MT or more of used oils discharged in the environment every year in Bangladesh. Through recycling
technology we may recover around 65-70 Thousand MT of recycled base oil thus saving BDT 300 - 400
Crore per year and also save the environment from hydrocarbon pollution.
In the world, there are several re-cycling technologies such as Acid-clay process, Distillation Process. In
Acid clay process, the additives or unwanted materials are removed through drastic action of acids and
high temperature applications which produces hazardous acid fumes, gases and emissions, again a
threat to the occupational health, safety and environment. On the other hand, in distillation process
there is no use of any acid or hazardous chemicals and hence very friendly to the health and
environment.
BLENDING INDUSTRY OUTLOOK
The lubricant business in Bangladesh in the private sector is less than a decade-old. Until 2000, only the
state-owned oil companies were allowed to import, blend and distribute lubricants here. At that time,
majority lube oils (65 percent) contained no additives. The government liberalized the market and
banned non-additives lubricants in 2001, to ensure minimum standards. Since then, more than 50
brands of lubricants, including renowned multinationals, have entered the market. But half a dozen
brands account for nearly 50 percent of the total business.
Lubricant is essential for any kind of engine. In Bangladesh these lubricants have a market size of Tk. 1.5
Crore and yet there is no regulatory authority for quality control. Lower quality and spurious lubricants
are being sold in abundance due to lack of monitoring and awareness and are damaging the life of the
engines at a faster pace. Users of these lubricants are facing huge financial loss as a result.
It is found that vehicles, factories, power plants, shipping and Bangladesh Railway use almost 65
thousand Tons of lubricants every year. 60% of these lubricants are used by the vehicles. Industries use
30% and the rest 10% are used by shipping industries. The market value stands at Tk. 1.5 Crore.
According to Bangladesh Petroleum Corporation (BPC), 10-12 companies like Mobil-Jamuna, BNO, BP,
Total, Castrol, Shell hold 55% market share. The rest 45% is not concerned about quality control. There
are almost two dozens of companies selling inferior quality lubricants.
According to the information provided by BUET, the proportion of base oil in lubricant is 90%. The rest 10%
contains different additives and any lubricant having proportion of additives lower than this (10%) might harm
the performance of the engine, which may cause the engine to stop or even explode. Many of the lubricants
available in the market do not contain the ingredients that they are supposed to. Some of the companies are
selling lubricants that contain no additives at all. Vehicles using such lubricants are affected badly. For the sake
of the economy, as well as the country, quality control in this sector has become a major issue but government
is yet to take any step. Energy Regulatory Commission does not have any written complain in this regard. They
are thinking about outsourcing the monitoring task due to lack of necessary human and technical resources.
Research revealed that base oil is imported from Thailand, Singapore, Malaysia, Korea and Taiwan. Used and
old lubricants from ships are mixed with imported base oil by some companies. A special kind of chemical is
used with these mixtures to enhance the brightness and these are sold under different brand names. There are
no additives in these spurious lubricants. Unfortunately the demand for such lubricants is usually very high due
to their lower prices. According to the retail sellers, lower priced lubricants have higher demand. Most of the
Bus and Truck drivers want to buy lubricants at 120-130 taka. They are not concerned about the health of
engines. Branded lubricants can cost about 210-250 taka per liter.
According to BSTI, 155 products require quality control certificate from them and lubricant is not there
in that list. So, there is nothing to do from BSTIs end. Experts say that the decision regarding the
lubricant brand is usually taken by the drivers and workers. Since they do not have proper technical
knowledge, they are biased to using the lower priced and lower quality products. Moreover, a certain
group is taking the benefit of the absence of proper monitoring. The neighboring India is very much
strict in this case. Lubricants are used not only in cars, planes and power plants, but also in the sewing
machines. But use of such products in all kinds of machines is not rational. Each engine requires a
specific type of lubricant. Engines that run on oil may use this, but gas-run engines should avoid such
use. The grade of lubricants depends on the horse power of each engine. What kind of lubricants suits a
specific engine is normally written in the engines users manual.
PRODUCTS USE AND USERS
Lube Base Oil is a mineral oil mainly used in the Lube Blending Plants in the combination with different
chemical additives for manufacturing different types of lubricants widely used in the transport, power,
industrial & marine sectors as engine oils, hydraulic & gear lubricants.
The by-products have also their definite application in the domestic & industrial sectors. These are
Sl.
Item of Products
No.
1. Hydro Finished Lube Base Oil Grade-1
2.
3.
Light Oil Equivalent to HSD

Wire Rope
Users Particulars
The Lube Blending Plants Grease Making Plants Industrial
Lubricant Making Plants.
Fuel Oil Dealers in the Country Automotive Sector.
Marine Application Industrial application in metal made rope
& hoisting cables.
DEMAND ANALYSIS
In Bangladesh, lube demand and quality are rising, and local blenders are taking the lead. The Countrys
economic position is below India but well ahead of Pakistan and Sri Lanka and equivalent to other
emerging nations in Asia, such as Philippines, Indonesia and Vietnam. Natural gas and coal are the main
sources of energy. The Country has a long 50-year-old refinery with no base oil plant, and is largely
dependent on imports of petroleum products.
After independence in 1972 until 2000, only the state owned oil companies were allowed to import,
blend or distribute lubricants in Bangladesh, and during that period 65 percent of all lubricants
contained no additives. But in 2001 lubricant marketing was liberalized, distribution of non-additives
engine oil was banned, and minimum standards of API SC/CC were established. Since then more than 52
brands of lubricants have entered the Bangladesh market, but apart from Mobil, Shell, BP, Castrol, BNO,
Fuchs, Total, Conoco, Gulf, SK and Caltex, most of the brands have no real brand value in the market.
The Countrys annual lubricant demand has grown steadily from 58,300 tons in 2007 to a projected
62,600 tons (about 18.4 million gallons) in 2010. MJLs Mobil brand has 26 percent of the market,
followed by BP (11 percent), Total (6 percent), Shell and Castrol (each with 2 percent), and others, the
lower, with the remaining 53 percent.
Out of total per year of base oils are imported by the 11 blenders; MJL alone imports major quantity of
the total. Apart from MJL, the blending capacity of the other blenders is small, ranging from 500 to 1,500
tons per year. Importing base stocks in flexi bags also makes their business operations expensive.
MJL Bangladesh inaugurated its inline lube oil blending plant in 2003, where it blends and markets
Mobil lubricants under license. MJL is now exporting Mobil lubes to Nepal and Bhutan, the first entry of
Bangladesh in lubricant exports. Companies producing Mobil, BP, BNO, Fuchs and Total brands fully
comply with the governments ban on the marketing of non-additive straight mineral oil as engine oil,
and demand for premium and competitive grades of Mobil-brand lubricants continues to increase.
Government-owned oil companies continue to lose market share to private blenders and importers.
Government policies and import duties have reduced imports of finished lubricants in Bangladesh.
Import duties on base oils and lubricant additives are less than half the level of duties on finished lubes,
so local blenders will take the opportunity of blending more products locally, for better margins and
long term sustainability.
Currently the demand for the product-mix in review is being met entirely through import. Previously,
Lube Base Oil, the major component of Lube Blending Plants was to be imported absolutely by
Bangladesh Petroleum Corporation (BPC) for using in its own Lube Blending Plants namely Eastern
Lubricating Blenders Ltd. (ELBL) within the premises of east while Burma Shell Oil Company &
presently the Padma Oil Company Limited as well as the Standard Asiatic Oil Company Limited (SAOCL)
formally attached with Standard Vacuum Oil Company. But currently a private sector enterprise Asiatic
Oil Company, it operates with BPC.
With further opening of private sector enterprises like Mobil - Jamuna Lube Blending Plants, Chittagong,
Lub-rref (Bangladesh) Limited, Chittagong, FUCHS Lubricants (BD.) Limited, Chittagong & Pacific Oil Co.
Limited, Chittagong, Lub House Limited, Narshingdi are some of the units worth maintaining come into
being. More private sectors Lube Blending Plants are also in the pipeline for commissioning. None of
them equipped with Base Oil.
Consequently, Bangladesh spent huge quantity of hard earns foreign exchanges every year to import
these industrial raw materials. The import figures of Lube Base Oil by BPC during the period 2003-2004
to 2010-2011 shown at the following table would reflect the Countrys import scenario
QUANTITY OF IMPORTED PRODUCTS & ITS VALUE

SINCE 2003-2004 TO 2012-13
Refined products (HSD,
SKO, Jet & Mogas)
Crude oil
Year
Qty in
MT
Value
(Core
Tk)
HSFO
Total
Value
(Core
Tk)
Qty in
MT
Value (C
ore Tk)
2003-04
1252424
1848.43
2262348
4015.81
6516
18.38
3521288
2004-05
1063208
2261.98
2691750
7213.88
10189
38.14
39859
61.53
3805006
9575.53
2005-06
1253285
3750.69
2380533
9382.77
5137
35.53
3638955
13168.99
2006-07
1211037
3985.02
2536535
10446.2
4287
25.13
3751859
14456.35
2007-08
1040084
5093.69
2273263
14343.04
5006
29.94
3318353
19466.67
2008-09
860877
3431.4
2507819
10945.24
4828
23.63
29920
60.38
3403444
14460.65
16781.75
Qty in MT
Value
(Core Tk)
Lube Base Oil
Qty in MT
Qty in MT
Value
(Core Tk)
5882.62
2009-10
1136567
4701.54
2634212
12028.18
7262
52.03
3778041
2010-11
1409302
7037
3259344
20280.52
4745
43.75
230431
1123.17
4903822
28484.44
2011-12
1083467
7053.51
3409934
27111.24
4980
53.11
680982
3819.07
5179363
38036.93
8536.70
2827160.29
219493.10
4852.87
38.56
803603.36
4367.26
4927718.52
34891.62
47699.96
26782898.29
137715.98
57802.87
358.20
1784795.36
9431.41
40227849.52
195205.55
2012-13
Total =
1292102
11602353
AVERAGE IMPORT PRICE OF PETROLEUM PRODUCTS FROM 2003-04 TO 2012-13

Financial Year
Crude US$/bbl
Refined US$/bbl
Lube Oil US$/bbl
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
33.41
45.85
59.04
63.59
95.70
76.87
75.66
93.13
112.95
109.22
39.32
56.96
75.92
78.31
119.07
83.04
86.17
113.69
128.30
127.70
67.47
86.22
140.43
119.03
122.16
99.73
142.38
179.85
178.63
142.04
PROJECTION OF DEMAND OF THE LUBRICANT MARKET

Engine oil consumption could easily grow by 5.0% to 6.0% annually, if there was a constant supply of
gas and electricity. Engine oil, also known as motor oil, is a liquid product used to lubricate various types
of internal combustion engines, such as automobile and industrial engines. It is also used in marine,
agricultural, train and aero plane engines. The key function of the oil is to lubricate and clean the moving
parts of machines or engines. It also prevents corrosion and rust and keeps the engines cool by carrying
away the heat from the sliding parts.
The market for engine oils, known as lubricants, is growing rapidly, driven by an increasing number of
motor vehicles in Bangladesh. Of the BDT 1,500 Crore lubricant retail market in 2011, the automobile
industry consumed 79 percent, while the manufacturing sector consumed the rest. A study in engine oil
blending and sales in Bangladesh was projected lubricant consumption at 86,000 tones for 2013. Such
consumption was around 75,000 tons in 2011, 64,000 tons in 2010 and over 60,000 tons in 2009 and
58,300 tons in 2008.
The following table shows the engine oil market, which grows at 4.0% to 5.0% a year, has more
potential to grow as thousands of new motor vehicles are plying the roads every year. World demand
for lubricants is forecasted to advance 2.30 percent a year to 41.70 million tons in 2010.
The new motor vehicles are plying the roads every year is as follows:
ANALYSIS OF SUPPLY
The present supply of Lube Base Oil comes through the Public & Private sector Lube-Blending plants as
mentioned above that of the importers of finished products by the NOCs as well as large number of
private sector imports from Saudi Arabia, Dubai, Europe, Thailand, Singapore, and India. The major
public sector Oil Companies are Padma, Meghna and Jamuna. These companies are marketing lubricants
under the Brand name of Total, BP and Mobil respectively. The private sector enterprises involved in
Blending & Marketing of finished products by importing Base Oil & products at finished stages are
FUCHS, Mobil-Jamuna, BNO, Castrol, and Conoco to mention same of them. So, the total supply of LubeBase Oil in Bangladesh is entirely dependent on import both for raw materials and finished products.
Therefore, the entire imported quantity may be considered as supply gap.
MARKET SHARE
The present annual turn-over is around 80,000 tons worth US$200 million (on ex-company price basis).
With the pace of gradual urbanization & industrialization, the consumption of lube oil is increasing at
least around 5% per year in Bangladesh. The market is 100% import based. Even the blenders also
import their 100% base oil, additives, viscosity improvers & other chemicals etc. from different sources
abroad. Out of the total demand of 100 thousand MT of lubricant in Bangladesh annually, the
approximate market share of the local blending plant may be distributed as follows:
Sl. No.
1.
2.
3.
4.
5.
6.
Name of the Company
MJL Bangladesh Limited

National Oil Company Limited
Private Sector Finished Product Import
Smaller Private Sector Blending Plant
Multinational Brand
Total
Market Share (%)
25%
20%
20%
15%
15%
5%
100%
APPLICATION SECTOR WISE MARKET SHARE

Sl. No.
1.
2.
3.
Application Sector
Automotive
Industrial & Power Generator
Marine, Corporate & Other
Market Share (%)

75%
20%
5%
THE PROJECT
Section-IV
INTRODUCTION
Lub-rref has a current installed capacity of 12,500 MT of Lube Oil (Single Shift) for Blending Plant,
13,125 Re-refining Oil (Three shifts) for Re-refining Plant. The Companys current capacity utilization is
only 14.16% and thus produces about 6916 MT annually because the blending capacity is only for single
shift (8 Hrs per day).
However, for three or three shifts four cycle in 24 Hours/ per day the capacity would be 30,000 MT and
40,000 MT per Year. The Company is planning on an expansion project that would raise its production
capacity by another 2000 MT VM and 3000 MT Transformer Oil per year in single shift.
Lub-rref has already started to implementation of the project. All such works are being carried out
through the Companys own working capital. The Project is to be completed in a year. The total working
capital requirement is about BDT 60.65 Crore of which the debt requirement is BDT 54.40 Crore and the
remaining would come from private equity placement.
As a part of expansion plan, the Company is going to introduce NAS System (National Aerospace
Standard, USA) in order to manufacture Turbine and Hydraulic Oils having zero particles. With the
introduction of this system, the market share of the Company will increase in this segment, which, is
otherwise imported only by the national oil companies. Furthermore, the Company has also planned to
set up a Modified (VM) plant and a transformer oil plant. Details of the expansion plan -
NAS SYSTEM
Lub-rref introduced National Aerospace Standard (NAS) micro-level clean oil specially, hydraulic Oils,
turbine Oils, compressor oils and so on. Micro-clean oil is necessary for servo valves which extends the
life of machinery. It is a membrane filtration system to remove humanly invisible particles available in
any fluid.
VM PLANT (VISCOSITY MODIFIER PLANT)

This is one of the additive component, the Company regularly import from abroad. With the
introduction of this unit, companys dependents on import will be reduced. Over and above, this product
can be marketed to the similar blending plants both home & abroad. As a result, projects revenue
earning shall increase substantially.
TRANSFORMER OIL PLANT

The Company is also aimed at setting up of a Transformer Oil manufacturing plant, the demand for
which is now met through imports only. With the setting up of this plant the countrys depends on
import for the power sector will be substituted and revenue earning of the project will increase to a
great extent.
OEMS APPROVALS
OEMs refers to Original Equipments Manufacturers. The product of Lub-rref should be accepted or
certified by the Engine or Machine Manufacture(s) which is called OEMs Approvals. Major OEMs
approvals are Waukesha Engine, Wartsila Engine and Volvo Engines etc. These approvals would help
capturing 20% of market share.
PRODUCTION CAPACITY
If the proposed expansion as well as OEM,s Approvals are achieved the combination of products or
market share would be increased by around 20%. The capacity would be increased by a further 5000
MT per year per 8 (eight) hrs shift.
PROJECT LOCATION
The expansion project will be situated nearby to the existing plant at Chittagong. The site has got good
transportation facilities and is well connected with Chittagong. All required utility connections are
available. The factory address is Plot No. B-6 (part), 9-10, 23-24 BSCIC Industrial Estate, Sagarika Road,
Chittagong. The total land area is around of 43313 SFT and it is in the name of the Company.
RAW MATERIALS
The project requires raw materials such as Base Oils, Additives, Used Lube Oils, Process Chemicals and
Laboratory Reagents, which would mostly be procured from foreign suppliers and a part would be
sourced from local sources.
PROJECT COST AND MEANS OF FINANCING

SUMMARY
a. Working Capital Finance
b. Long Term Finance for SEBL Liabilities Pay-off
Tk. 58.37 Crore

Tk. 89.10 Crore
TOTAL FUND REQUIREMENTS
TK. 147.47 CRORE

To implement the business plan, the Company has estimated working capital requirement for BDT
583,706,688.
Information Sheets for One Cycle of Working Capital required against Budgeted Sales of 20162017.
Item
Amount (BDT)
Raw Material (Base Oil )

4,064,203
Raw Material (Additives)
562,276
Packing Materials
491,806
Finished Goods
5,118,286
Receivables
8,541,297
Stores & Spares
55,000
Required Working Capital (Gross)
18,832,868
Less: Credit Purchase
546,806
Working Capital Required (Net)
Tied up
period in
Days
45
60
30
30
25
30
30
Actual Amount
Required (BDT)
182,889,147
33,736,559
14,754,191
153,548,568
213,532,413
1,650,000
600,110,878
16,404,191
583,706,688
HISTORICAL FINANCIAL PERFORMANCE
Section-V
SUMMARY OF FINANCIAL POSITION, FINANCIAL PERFORMANCE & CASH FLOW

THE SUMMARY OF THE AUDITED STATEMENT OF FINANCIAL POSITION OF THE COMPANY FOR
THE LAST FOUR (4) YEARS Amount in Tk.
Particulars
Year
31-Dec -15*
ASSETS
Non-Current Assets
Current Assets
Total Assets
EQUITY AND LIABILITIES
Shareholders' Equity
Non-Current Liabilities
Current Liabilities
Total
Shareholders'
Equity and Liabilities
Net Asset Value Per
Share (NAV)
31-Dec -14
31-Dec -13
31-Dec -12
2,076,573,022
785,771,877
2,862,344,899
1,882,391,452
647,260,847
2,529,652,300
1,608,376,145
477,546,519
2,085,922,664
1,240,052,131
353,375,638
1,593,427,769
1,172,881,196
915,684,576
773,779,127
2,862,344,899
1,077,698,461
843,453,519
608,500,320
2,529,652,300
844,440,393
671,706,542
569,775,729
2,085,922,664
428,988,022
691,170,308
473,269,439
1,593,427,769
41.11
37.77
54.13
27.50
The summary of the Audited Statement of Comprehensive Income of the Company for the
last Four (4) years Amount in Tk.
Year
Particulars
31-Dec -15*
830,038,537
(587,750,288)
31-Dec -14
704,374,146
(494,323,878)
31-Dec -13
512,771,340
(370,472,624)
31-Dec -12
336,357,114
(250,460,591)
Gross Profit
Less: Administrative Expenses
242,288,249
(24,702,910)
209,950,268
(25,336,160)
142,298,716
(18,958,477)
85,896,523
(19,407,165)
Less: Selling and Distribution

Exp.
Less: Financial Expense
Total Operating Expenses
Trading Profit/Operating Profit
(19,507,204)
(18,129,560)
(12,050,124)
(13,230,636)
(108,995,505)
(153,205,619)
89,082,630
(90,296,448)
(133,762,168)
76,188,101
(57,517,509)
(88,526,110)
53,772,606
(36,072,672)
(68,710,473)
17,186,050
Financial Income
Other Income
Profit before Income Tax
Less: Current Tax
368,002
18,683,628
108,134,260
(2,547,271)
277,853
5,892,520
82,358,474
(2,131,334)
266,815
17,400,152
71,439,572
(1,591,315)
44,903
511,466
17,742,419
(1,684,567)
Less: Deferred Tax

Profit after Income Tax
(10,404,254)
95,182,735
(6,326,401)
73,900,739
(29,544,397)
40,303,861
2,522,123
18,579,975
Net Turnover
Less: Cost of Goods Sold
Non-operating Income
THE SUMMARY OF THE AUDITED STATEMENT OF CASH FLOWS OF THE COMPANY FOR THE LAST
FOUR (4) YEARS
Amount in Tk.
Particulars
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Net (increase/ (decrease) in cash &
cash equivalents
Cash and cash equivalents at the
beginning
Cash and Cash equivalents at the end
31-Dec -15*
Year
31-Dec -14
31-Dec -13
145,593,836
(265,482,446)
120,446,333
557,723
88,329,222
(359,572,257)
271,968,590
725,555
56,287,787
(99,724,490)
43,079,836
(356,867)
33,248,149
(199,953,849)
170,198,814
3,493,114
13,531,438
12,805,883
13,162,750
96,69,637
14,089,162
13,531,438
12,805,883
13,162,751
31-Dec -12
ANALYSIS OF HISTORICAL FINANCIAL PERFORMANCE

Particulars
Revenue Growth
Gross Profit Margin
Net Profit Margin
Current Ratio
Quick Ratio
ROE
ROA
Debt/Equity Ratio
Fixed Asset Turnover Ratio
Interest Coverage Ratio
31-Dec -15
Year
31-Dec -14
31-Dec -13
17.86%
29.19%
11.47%
1.02
0.75
8.12%
3.53%
1.44
0.40
37.35%
29.81%
10.49%
1.06
0.83
6.90%
3.20%
1.35
0.37
52.45%
27.75%
7.86%
0.84
0.65
4.77%
2.19%
1.47
0.32
0.99
0.91
1.24
THE OFFERING
Section-VI
Lub-rref (Bangladesh) Limited is in a business with immense potential and growth prospect. The
primary concern of Lub-rref is working capital requirement to go forward and to back Lub-rrefs
extensive plans for business expansion in near future. Therefore, the company has decided to go for
private equity placement with the approval of Securities and Exchange Commission (SEC) to raise
capital in the form of common shares, instead of any debt financing since the company already has a
considerable amount of debt.
OBJECTIVES OF THE PLACEMENT

The main objective of the private equity placement is to meet the requirement of working capital.
DETERMINATION OF OFFERING PRICE

The offer price of Lub-rref (Bangladesh) Limited has been determined by the Net Assets Value (NAV)
per share and Projected Earnings based value per share. Net Asset Value (NAV) gives asset-backing to
the shares of the Company. Earnings per Share (EPS) indicates profitability against shares of the
Company.
Method
Particulars
Amount
Method-1
Net Tangible Asset Value Per Share
26.51
Method-2
Historical Earning Based Value Per Share
20.55
Method-1:
Net Tangible Assets Value Per Share
Shareholder's Equity
Note
Amount
Share capital (Existing)
285,313,480
Share capital(proposed)
157,118,582
Revaluation Reserve
241,611,843
Retained Earnings(Adjusted)
488,837,291
E=A+B+C+D
F
G=E/F
1,172,881,196
44,243,206
26.51
Total Share Holder's Equity

No. of Shares Outstanding (Proposed + Existing)
Net Tangible Assets Value Per Share
Method-2:
Earning Based Value Per Share Based on Average Market P/E

As per Draft Financial Statement 2015
Year
December 31,2015 (Draft)
December 31,2014
December 31,2013
No. of Share
28,531,348
28,531,348
15,600,000
Net Profit After

Tax
95,182,735
73,900,739
40,303,861
December 31,2012
15,600,000
18,579,975
December 31,2011
15,600,000
5,312,446
Total
103,862,696
233,279,756
Total Number of Share (Proposed + Existing)
EPS Based On Weighted Average net Profit After Tax
Average Market P/E (February ,March & April 2016)**
Historical Earning Based Value Per Share (WEPS X Market PE)
Weighted Average Weighted Average

No. of Share
Net profit after tax
0.27
26,146,941
0.27
20,300,722
0.15
6,053,571
0.15
0.15
1.00
2,790,681
797,920
56,089,835
44,243,206
1.27
16.21
20.55
Information collected from DSE Monthly Review (February, March and April 2016)
Month
February.16
March.16
April.16
Total
Average P/E Ratio
Sector P/E
12.39
12.26
12.39
37.04
12.35
Average Market P/E

16.65
18.13
13.86
48.64
16.21
Average of Earning Based Value & Net Tangible Assets Value per Share is Tk. 23.53 (26.51+20.55/2)
RISK FACTIONS & MANAGEMENT PERCEPTION
Section-VII
INTEREST RATE RISK

Interest rate risk is concerned with borrowed funds of short term and long term maturity. Volatility in money
market and increased demand for loans/investment funds raise the rate of interest. High rate of interest
increases the cost of fund of a company and could adversely affect the business and future financial
performance.
MANAGEMENT PERCEPTION
However, necessary provision is always made while exercising costing as to contain the fluctuation in the
rate of borrowed fund. The price of goods are calculated as to absorb such fluctuation & revalued
periodically. The Company Management is therefore, stipulating to raise equity to reduce dependence on
borrowed fund in the near future.
EXCHANGE RATE RISK
Exchange rate risk would be relevant to Lub-rref since the company often requires making large payment to
suppliers through foreign currency for its import of raw materials. The price of raw material in the
international market is relatively volatile. Unfavorable volatility or currency fluctuation may affect the
profitability of the Company. Due to volatility in foreign currency transactions, Lub-rref may face challenges
to honor commitments with counterparties. Moreover, adverse exchange rate movements may cause foreign
exchange losses to the company.
The rate of Bangladesh Taka being floating against Dollar there is always foreign currency exposure. To meet
the threat the Company recently took pragmatics steps for strategic purchases along with other importers
through Co-loading facilities there by reducing the inventory. They also envisage keeping provision for
foreign exchange rate fluctuation absorption scheme through hedge fund from Banks & Financial institutions.
INDUSTRY RISK
Industry risk refers to the risk of increased competition from foreign and domestic sources leading to lower
prices, revenues, profit margins, market share etc. which could have an adverse impact the business, financial
condition and results of operation. In Bangladesh, lube oil blending and marketing industry is fully
dependent on imported raw materials as no backward linkage is yet to be developed in the country. This is
significantly considered as Industry risk because, the raw material price may fluctuate to a great extent.
The Lubricants Blending Plants of Bangladesh is surviving through stiff completion for a long time with the
major international brands & has come to a some sort of matured stage to meet both internal & external
threat. Lub-rref (Bangladesh) Limited is also fully equipped in this regard.
Import of finished goods is free. However, the local Lub-Blending Plants enjoy a preferential tariff for import
of raw materials & chemicals. Similarly, restriction of export has been relaxed. All the competitors collect raw
material & chemicals almost from the same market place enjoying a common footing except the volume &
distance
MARKET RISK
Market risk refers to the risk of adverse market conditions affecting the sales and profitability of the
company. Mostly, the risk arises from falling demand for the product or service which would harm the
performance of the company. On the other hand, strong marketing and brand management would help the
company increase their customer base. Lubricating oil market in Bangladesh is very competitive due to
presence of many global giants. Large number of international lubricating oil companies has marketed their
products directly or through local agencies.
BNO is steadily building a brand equity of its own. Almost all the Blending Plants & local agents uses
Multinational Brand while marketing their products. BNO enjoys an unique position in this regard. They have
entered into technical collaboration with Multinational Formulators, working for obtaining major OEMs
approval but using absolutely own brand giving a special feeling to the end users. Through strong quality
control measures & price competitiveness BNO is steadily expanded its market shares with the growth of the
economy.
TECHNOLOGY RELATED RISK
Technology always plays an essential role in any business concern that ensures better services to the
customers and reduces the cost in various aspects. Any invention of new and more cost effective technology
may cause technological obsolescence and negative operational efficiency. Besides, any severe defects in the
plant and machinery may have an effect on productivity and profitability due to additional investment for
replacement or maintenance.
Lub-rref (Bangladesh) Ltd has set up a highly sophisticated computerized system for both blending and rerefining plant wherein pre-quantification of base oils, additives, temperature etc. are digitally controlled and
cross verified by external and internal regulatory bodies. Lub-rref has also set up a state of the art
laboratory, with the latest laboratory equipment procured from the worlds most reputed testing and
measuring equipment makers. While more lab equipments are in the pipe-line. Besides, Lub-rref has its own
R&D facilities and technical know-how agreement with US based company able to provide any new invention
with moderate investment.
RISK RELATED TO POTENTIAL OR EXISTING GOVERNMENT REGULATIONS
The Company operates under Companies Act, 1994, Income Tax Ordinance, 1984, Income Tax Rules, 1984,
Value Added Tax (VAT) Act, 1991, Value Added Tax (VAT) Rules, 1991, Customs Act, 1969 and other related
regulations. Any abrupt changes of the policies made by the regulatory authorities may unfavorably affect the
business of the Company.
Unless any policy change that may negatively and materially affect the industry as a whole, the business of
the Company is expected not to be affected significantly. Lubricating Oil industry in Bangladesh is a sector
with considerable local demand for differentiated product lines. Therefore, it is highly unlikely that the
Government will initiate any fiscal measure having adverse effect on the growth of the industry.
RISK RELATED TO POTENTIAL CHANGES IN GLOBAL OR NATIONAL POLICIES
The Company is dependent on imported raw materials. Any scarcity due to changes in policy in the
international market might dent the production level and profitability. The performance of the company may
be affected due to unavoidable circumstances both in Bangladesh and worldwide, as such political turmoil
and disturbance in the country may adversely affect the economy in general.
The management of Lub-rref is always concerned about the prevailing and unforeseen future changes in the
global or national policy and equipped them to response appropriately and timely to safeguard its interest.
Due to the strong brand equity of the company in the local market and with long and profound track
experience, the company will always endeavor to withstand the unexpected changes or any such potential
threats. Nevertheless, political stability and a congenial business environment is definitely the best situation
in which BNO is destined to achieve its maximum potential. Political turmoil and the disturbance are not
good for any economy so also for any company.
HISTORY OF NON-OPERATION
The company does not have any history of non-operation since its inception.
OPERATIONAL RISK
The operational risk is defined by the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events i.e. shortage of power supply, labour unrest, unavailability or
price increase of raw material, natural calamities like flood, cyclone, earthquake and so on may disrupt the
production of the company and can adversely impact the profitability of the Company.
To minimize the operational risk, BNO has adopted an in dependent operational strategy based on its limited
resources. The company is committed to safety, security, health and environment maintained through
regular audits by international agencies like ISO-Singapore, ASTM-USA, Germanischer Lloyd (GL), BSTI &
Bangladesh Accreditation Board besides the companys in house compliance audit on regular basis.
FUTURE PLAN
Section - VIII
OEMS APPROVAL
The Company is going to get OEMs Approval for better marketing of its quality products. OEMs means
Original Equipment Manufacturers Recommendation, i.e., the Product of Lub-rref should be approved
by the respective Engine or Equipment Manufacturers use in their engines. Therefore, the Company
needs at least the major OEMs approvals like Waukesha Engine Approval, Wartsila Engine Approval
and Volvo Engine Approval very soon.
GREASE PLANT
This is one of the most important lubricants for industrial or automotive uses. At present, Lub-rref
(Bangladesh) Limited is importing grease as finished products. But for competitive prices and brand
achievement we have to produce grease under the brand name of BNO Grease.
TRANSFORMER OIL PLANT
The Company is also aimed at setting up of a Transformer Oil manufacturing plant, the demand for
which is now met through imports only. With the setting up of this plant the countrys depends on
import for the power sector will be substituted and revenue earning of the project will increase to a
great extent.
Moreover, the export of lubricants from Bangladesh remains banned for a long time. The Company
applied for export permission, which has duly approved by tariff commission, which is now awaiting a
gadget notification from Ministry of Commerce. With the availability of the permission, the Companys
export potential will increase to a great extent to the neighboring countries including African market.
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 (2012-2015)

The company changed the financial year from September ending to December ending. The
audited financial statements are as follows
LUB -RREF (BANGLADESH) LIMITED

Statement of Financial Position
As at December 31, (2012-2015)
ASSETS
Non Current Assets
Property, Plant and Equipment
Intangible Assets
Capital Work-in-Progress
Current Assets
Inventories
Accounts Receivables
Advances, Deposits and Other receivables
Current Account with Associate Companies
Cash and Cash Equivalents
TOTAL ASSETS
EQUITY AND LIABILITIES
Shareholders' Equity
Share Capital
Share Money Deposit
Revaluation Reserve
Retained Earnings
Total Equity
LIABILTIES
Non-Current Liabilities
Long Term Loan-noncurrent portion
Lease Liabilities-noncurrent portion
Deferred Tax Liability
Total Non-Current liabilities
Current Liabilities
Long Term Loan-Current Portion
Lease Liabilities- Current portion
Short Term Bank Loan
Accounts and other Payables
Provision for Income Tax
Liability for Expenses and Other Finance
Total Current Liabilities
Total Liabilities
TOTAL EQUITY & LIABILITIES
NET ASSET VALUE PER SHARE
As on
31.12.2015*
As on
31.12.2014
As on
31.12.2013
As on
31.12.2012
1,477,750,029
598,822,993
2,076,573,022
1,508,377,188
374,014,264
1,882,391,452
1,547,010,681
61,365,463
1,608,376,145
814,408,264
385,170
425,258,697
1,240,052,131
205,859,895
332,183,764
143,179,955
90,459,102
14,089,162
785,771,877
2,862,344,899
143,911,108
254,115,103
158,137,884
77,565,313
13,531,438
647,260,847
2,529,652,299
105,221,507
122,319,178
183,447,136
53,752,816
12,805,883
477,546,519
2,085,922,664
91,110,461
114,264,856
107,518,951
27,318,619
13,162,751
353,375,638
1,593,427,769
285,313,480
157,118,582
241,611,843
488,837,291
1,172,881,196
285,313,480
157,118,582
247,968,655
387,297,743
1,077,698,461
156,000,000
129,313,481
252,739,034
306,387,876
1,000,385,077
156,000,000
6,923,481
266,064,541
487,579,470
744,747,984
170,936,592
915,684,576
682,921,181
160,532,338
843,453,519
514,120,306
1,141,551
156,444,685
671,706,542
629,692,093
2,886,768
58,591,447
691,170,308
146,268,000
33,819
604,592,644
9,401,596
7,954,486
5,528,583
773,779,127
1,689,463,704
2,862,344,899
41.11
285,972,000
1,569,832
295,737,596
12,129,919
5,407,215
7,683,757
608,500,320
1,451,953,839
2,529,652,299
37.77
98,664,000
1,512,456
445,615,839
8,897,748
3,275,882
11,809,805
569,775,730
1,241,482,272
2,085,922,664
54.13
943,809
449,324,136
10,303,788
1,684,567
11,013,139
473,269,439
1,164,439,747
1,593,427,769
27.50

Statement of Comprehensive Income
For the year Ended December 31, (2012-2015)
Revenues
Cost of Goods Sold
Gross Profit
Operating Expenses
General and
Administrative Expenses
Selling and Distribution
Expenses
Financial Expenses
Operating Profit
Non-Operating Income
Financial Income
Other Income
Profit Before Tax
Provision for Income Tax
Current Tax
Deferred Tax
Net Profit After Tax
Total Comprehensive
Income
Earnings Per Share (EPS)
01 January to 31
December 2015*
830,038,537
(587,750,288)
242,288,249
01 January to 31
December 2014
704,274,146
(494,323,878)
209,950,268
01 January to 31
December 2013
512,771,340
(370,472,625)
142,298,715
01 January to 31
December 2012
336,357,114
(250,460,591)
85,896,523
(24,702,910)
(25,336,160)
(18,958,477)
(19,407,165)
(19,507,204)
(18,129,560)
(12,050,124)
(13,230,636)
(108,995,505)
(153,205,619)
89,082,630
(90,296,448)
(133,762,168)
76,188,101
(57,517,509)
(88,526,110)
53,772,605
(36,072,672)
(68,710,473)
17,186,050
368,002
18,683,628
19,051,630
108,134,260
277,853
5,892,520
6,170,373
82,358,474
266,815
17,400,152
17,666,967
71,439,572
44,903
511,466
556,369
17,742,419
(2,547,271)
(10,404,254)
(12,951,525)
95,182,735
(2,131,334)
(6,326,401)
(8,457,735)
73,900,739
(1,591,315)
(29,544,396)
(31,135,711)
40,303,861
(1,684,567)
2,522,123
837,556
18,579,975
95,182,735
73,900,739
40,303,861
18,579,975
3.34
3.36
2.58
1.19
Statement of Changes in Equity

For the year ended December 31, 2015*
Amount in Taka
Particulars
Balance as at January 01, 2015
Share Capital
Share Money
Deposit
285,313,480
157,118,582
Revaluation
Reserve
Retained
Earnings
247,968,655
Total Equity
387,319,744
1,077,720,461
Addition during the year
Adjustment for Deferred

Tax for revaluation
Less: During the year

Net profit/ ( Loss) after tax for the
year
(6,356,812)
6,356,812
Balance as at December 31, 2015
285,313,480
157,118,582
241,611,843
95,182,735
95,182,735
488,859,292
1,172,903,196
For the year ended December 31, 2014

Amount in Taka
Balance as at January 01, 2014
Adjustment for Deferred
Tax for revaluation
Adjustment for Depreciation on
revaluation assets
156,000,000
129,313,481
252,739,034
306,387,878
844,440,393
129,313,480
157,118,581
286,432,061
2,238,748
2,238,748
Addition during the year
(129,313,480)
(7,009,127)
7,009,127
(129,313,480)
Net profit/ ( Loss) after tax for the

year
73,922,739
73,922,739
Balance as at December 31, 2014
285,313,480
157,118,582
247,968,655
387,319,744
1,077,720,461

Statement of Cash Flows
For the year ended December 31, (2012-2015)
Jan-Dec.,
2015*
Taka
A.
B.
C.
D.
E.
F.
CASH FLOW FROM OPERATING ACTIVITIES:

Receipts from customers
751,969,876
Payments to suppliers ,employees &
(625,427,670)
others
Receipts from non-operating income
19,051,630
Net cash (used in) / generated by
145,593,836
operating activities
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property, plant & equipment
(27,779,928)
Capital Work-In-Progress
(224,808,729)
(Increase)/Decrease in intangible assets
(Increase)/Decrease in investment
(12,893,789)
Net cash (used in) / generated by investing
(265,482,446)
activities
CASH FLOW FROM FINANCING ACTIVITIES:
Interest Paid
(108,995,505)
Increase/(Decrease) in short term loan
308,855,048
Increase/(Decrease) in long term loan
(79,413,210)
Increase in share money deposit /
(withdraw)
Net cash (used in) / generated by financing
120,446,333
activities
INCREASE/(DECREASE) IN CASH AND
557,723
CASH EQUIVALENTS (A+B+C)
OPENING CASH AND CASH
13,531,438
EQUIVALENTS
CLOSING CASH AND CASH
14,089,162
EQUIVALENTS
Net operating cash flow per share
0.49
Jan-Dec.,
2014
Taka
Jan-Dec.,
2013
Taka
Jan-Dec.,
2012
Taka
572,552,220
504,717,019
317,319,827
(490,393,371)
(466,096,201)
(284,628,047)
6,170,373
17,666,967
556,369
88,329,222
56,287,786
(23,110,960)
(312,648,800)
33,248,149
(23,812,497)
(12,310,000)
(61,365,464)
385,170
(26,434,197)
(99,696,743)
(78,795,177)
(21,461,929)
(359,572,257)
(99,724,491)
(199,953,849)
(90,296,448)
(149,878,243)
355,024,699
(57,517,509)
(3,708,298)
(18,084,356)
155,923,114
(36,072,672)
50,348,372
157,118,582
122,390,000
271,968,590
43,079,838
170,198,814
725,555
(356,867)
3,493,114
12,805,883
13,162,751
9,669,637
13,531,438
12,805,883
13,162,7501
3.61
2.13
0.47

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INFORMATION MEMORANDUM

LUB-RREF (BANGLADESH) LIMITED

Lub-rref (Bangladesh) Limited

SECTION-I: COMPANY PROFILE OF LUB-RREF (BANGLADESH) LIMITED

SECTION II: BUSINESS PROFILE OF LUB-RREF (BANGLADESH) LIMITED

SECTION III: LUB-OIL RE-REFINERY AND BLENDING INDUSTRY

SECTION IV: THE PROJECT

SECTION V: HISTORICAL FINANCIAL PERFORMANCE

Lub-rref (Bangladesh) Limited

SECTION VI: THE OFFERING

Lub-rref (Bangladesh) Limited

Lub-rref (Bangladesh) Limited

EXECUTIVE SUMMARY &

Face value of share

Bankers / Financial Institutions

Lawyer to the Company

Lub-rref (Bangladesh) Limited

Lub-rref (Bangladesh) Limited

COMPANY PROFILE OF LUB-RREF (BANGLADESH) LIMITED

ASSOCIATES, SUBSIDIARY/RELATED HOLDING COMPANY AND THEIR CORE AREAS OF

Name of the Associate

Juldha Ship Yard Limited

Lub-rref is associate of Juldha

Ship building and dry

FINANCIAL INFORMATION (AS PER AUDITED FINANCIAL STATEMENT):

Lub-rref (Bangladesh) Limited

Certificate/ License No.

2nd December 2017

30th June 2016

19th October 2016

30th June, 2016

19th May, 2016

15th June, 2016

8th November, 2015

Bangladesh Accreditation Board(BAB)

3rd March 2018

THE NAMES OF THE SHAREHOLDERS ARE GIVEN BELOW:

MRS. RUBAIYA NAHAR

Lub-rref (Bangladesh) Limited

MR. MOHAMMED YOUSUF

Lub-rref (Bangladesh) Limited

Sales & Marketing

SENIOR MANAGEMENT PROFILE

MR. A.H.M MIZANUL GAFFAR

Lub-rref (Bangladesh) Limited

MR. SAJID AFTAB

MR. NAIM SIDDIQUI

MR. RASHEDUL ISLAM

MR. MD. MOZAMMEL HOSSAIN

Lub-rref (Bangladesh) Limited

BUSINESS PROFILE OF LUB-RREF (BANGLADESH) LIMITED

PRINCIPAL PRODUCTS OF THE COMPANY

BNO Heavy Duty Series BNO HD 40 API

BNO CNG Special 20W-50 API SL/CF

(II) GENERATOR OIL

BNO Gear Oil-80, API GL-4/GL-5

4. BNO Marine- 40, TBN 15

Multi-grade Gear Oil Series:

B.INDUSTRIAL PRODUCT CATEGORY

BNO Hydraulic AW 100

BNO HVI Hydraulic AW-100

BNO Compressor Oil 100