The lubricants business of Hong Kong-based Yip’s Chemical Holdings Ltd. reported an operating profit for the first half of the year – rebounding from an operating loss – and a 12% increase in sales, citing factors such as growth in the overall automotive lubricants market and more stable prices for raw materials.
The company’s lubricants business posted a profit of $5.7 million Hong Kong dollars (U.S. $728,000) for the first six months of this year, improving from an HK$2.9 million operating loss in the same period last year.
The company said that it cooperated with the operators and original equipment manufacturer of different brands to increase sales volume and share expenses, which led to better improvement in the overall profitability of the lubricants business. The prices of raw materials were relatively stable during the period under review due to weak supply and demand, Yip’s Chemical Chairman Ip Chi Shing noted in his chairman’s statement.
Sales revenue rose to HK$193.8 million for the first half of this year, compared to $172.4 million.
“During the period under review, the lubricants business continued to further explore the automotive lubricants and diesel engine oil business, and the sales network has expanded considerably,” the company stated in its interim earnings report for the first half of this year. “Despite the rapid development of electric vehicles in Mainland China, the overall automotive lubricant market maintained a modest growth due to the large stock of traditional vehicles.”
In 1992 Yip’s Chemical Holdings began production of lubricants now supplies automotive, industrial and specialty lubricants under the Hercules and Pacoil brand names. The group produces and sells petrochemical products, including lubricants. Its nationwide network serves all major provinces and cities across China.