The lubricants business posted an operating loss of 2.1 million Hong Kong dollars (U.S. $268,000) in 2022, compared to an HK$19.7 million operating profit in 2021.

The past year was the most difficult in the group’s 51-year history, Yip’s Chemical Chairman Ip Chi Shing said in its earnings news release. “The Russia-Ukraine War, global supply chain disruptions and multiple considerable interest rate hikes have dealt a severe blow to the already sluggish global economy,” he said. “Moreover , the COVID-19 outbreaks in mainland China and stringent pandemic control measures implemented by the Chinese government, have posed significant challenges to economic activities, affecting the group’s core businesses.”

Sales revenue for its lubricants business – despite an expansion of it – declined to HK$299 million last year, compared to HK$333.2 million, “as a result of the weakened demand from the lubricants market due to the significant decrease in commuting during the pandemic.”

The company expressed optimism its lubricants business could turn from loss to profit this year with rising sales revenue, believing lubricants demand will be driven by a significant increase in commuting by car owners.

Yip’s Chemical supplies automotive lubricants under the Hercules brand, and industrial and specialty lubricants under the Pacoil brand. It also produces and sells petrochemical products such as solvents, coatings, inks and lubricants, with its nationwide sales network covering all major provinces and cities across China. The company also provides aftermarket services to car owners through an automotive lubricant and maintenance services chain covering several major provinces in China.