China’s Copton Approved for IPO


Chinese lubricant blender Copton Technology Co. last week gained final approval to launch an initial public offering on the Shanghai Stock Exchange, which will aim to raise 320 million (U.S. $49 million).

The Qingdao, Shandong province-based company aims to fund four major projects: a new 40,000 metric tons per year blending facility, a research and development center, a storage center and a regional sales network.

Copton has not said when it will conduct the IPO, but it should be within the following six months, according to the China Securities Regulatory Commission.

Engine oil is Coptons major business. By the end of 2014, it had 602 distributors to sell a variety of engine oils across the country. We have a rich product line for vehicles in different uses, a Copton spokesman told Lube Report Asia. For example, its Nano line of synthetic oils are for new high-end vehicles, he said, while its RS series, which meets the American Petroleum Institutes SL specification, are for older gasoline-powered cars.

Emission standards are only mandatory in big cities, therefore a large amount of vehicles with old-model engines, especially trucks and vans, are still in use in small cities, towns and villages. Its important for us to serve them, he said.

Chinas latest National V emission standards for light-duty vehicles, equivalent to the European Unions Euro V standards, are set to roll out as early as in 2017, but big cities like Guangzhou, Shanghai and Beijing have already imposed it on local vehicles.

The spokesman acknowledged that the growth rate of automobile sales in China has decelerated in recent years, but said the trend will not hurt Coptons business.

Chinese are still buying cars, even though the sales are not growing as significantly as before, he said, noting that government subsidies will encourage people to buy new cars to comply with new emission standards.

According to a government report released at the ongoing National Peoples Congress, China plans this year to wipe out 3.8 million yellow label vehicles, which do not meet even the National I emission standards, through measures including subsidies.

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