According to an industry insider, warranties for Hitachi construction machines require customers to use lubricants from Japan. But after the warranty periods end, many customers tend to switch to cheaper local brands. To retain these customers and to expand its after-sales service market, the companies have priced these new lubricants much lower than those from Japan, though they remain about 10 percent more expensive than similar products in the Indonesian market.

Both lubes are approved under the Japanese Automotive Standards Organizations automotive specifications, allowing Hexindo to sell to customers of other Japanese brands of construction machines, such as Komatsu and Kobelco.

Prices for a 200 liter drum are 5,274,666 rupiah (U.S. $445) for engine oil and 4,764,174 rupiah for hydraulic oil.

We have a promotional discount of about 5 to 10 percent until the end of October, and on the day of launch we have already sold 600 drums of hydraulic and engine oils, Adi Santoso, general manager of Hexindo Parts Department told Lube Report Asia last week.

The original lubricants from Japan cost almost [twice as much as] the recently launched locally blended new products, he added. These are also the only zinc-free lubricant products for the industry in Indonesia.

Zinc is commonly used in lubricants as an additive to help reduce metal wear. However, during operation, zinc can separate and combine with other elements in oil, producing sludge-like residues that are difficult to remove. With a zinc-free lubricant, the amount of the sludge-like material can be reduced significantly, he added.

Both lubricants are produced by P.T. Idemitsu Lube Techno Indonesia, a subsidiary of Idemitsu Kosan, at its blending plant in Karawang International Industrial City in the West Java Province. More than 90 percent of lubricants produced at the blending plant go to the Indonesian market.