Malaysian conglomerate UMW Group is taking aim at Southeast Asian markets with its new line of lubricants and is targeting total lube sales of 100 million ringgit (U.S. $28 million) in five years time.
The new range of premium lubricants, Grantt Stellar, is a line of passenger car motor oils that meets the American Petroleum Institutes API-SN and ACEA (European Automobile Manufacturers Association) A3/B4 standards. The other new lines are Quadra motorcycle oils and Quasar diesel engine oils.
The [sales] target is expected to be achieved through several phases of penetrating the Southeast Asia and Asia-Pacific markets, said UMW Engineering and Manufacturing Executive Director Megat Shahrul Azmir.
We areplanning to establish relationships withpotential business partnersto sell, market and distribute our Grantt lubricants within the respective target markets, S. Vikneshwaran, UMWs head of investor and media relations told Lube Report Asia. We have identified a potential partner in Myanmar. Indonesia, Laos and Cambodia are next on the list.
After ASEAN countries, UMW will continue to target China. The lubricant business is also experiencing stiff competition in the local market. [However, in China] we recorded improved operating margin contribution from the lubricant business. We are bidding to supply to other major automotive players in China, the company said in its 2014 third quarter results, released in November.
UMW will rely not only on foreign sales to reach the sales growth target, but on increased domestic sales as well, Vikneshwaran said.
UMW also manufactures automotive transmission fluids and industrial oils under the Grantt brand, and may focus more on construction and mining lubricants. Vikneshwaran noted that recently relaxed laws on jade mining in Myanmar and said that could lead to growth in that industry and new opportunities for lubricant sales.
UMW currently operates a 40,000 metric tons per year blending plant in Shah Alam, Malaysia, and a 50,000 t/y plant in Xinhui, Guangdong Province, China.
Apart from manufacturing Grantt lubricants, UMW also toll-blends finished lubricants for Shells Pennzoil segment and Spanish oil company Repsol, at its Malaysia plant. At the Xinhui plant, it blends Repsol lubricants and GEP (Grantt Engineering Products Company, Inc.) products.
The company is planning the construction of its third lubricant blending plant near Port Klang, Malaysia, expected to be completed in 2-3 years.