Growth Forecast for Bangladesh Market


Lubricant demand volume in Bangladesh is projected to increase 2.5 percent this year mainly due to a stable political environment and industrial growth, a leading market player said last month.

The nations industrial sector suffered a significant contraction in 2013 due to conflict between the two major political parties – the Awami League and the Bangladesh Nationalist Party – but it is expected to rebound in 2014. Lubricant supplier MJL Bangladesh Ltd., in its 2013 annual report released last month, predicted that the nations demand for industrial lubes will grow 2.5 percent this year.

MJL, which was formerly known as Mobil Jamuna Lubricant Ltd., estimated that Bangladesh consumed 100,000 metric tons of lubricants in 2013. The company, which is headquartered in the capital of Dhaka, pegged the value of those lubricants at 2,400 crore taka (24 billion taka or U.S. $309 million). It estimates that the value of the market has doubled in the past five years.

Automotive lubricants constitute approximately 75 percent of the market, the rest being industrial.

The private sector of the Bangladesh lubricant market is just 14 years old. Until 2000, only state-owned oil companies were allowed to import, blend and distribute lubricants here. At that time, most lube oils (65 percent) contained no additives.

The government liberalized the market and banned unadditized lubricants in 2001, to ensure minimum standards. Since then, more than 70 brands of lubricants, including widely recognized multinationals, have entered the market and 11 privately owned blending plants have been commissioned.

MJL was formed as a joint venture between ExxonMobil and Jumana, but EC Securities Ltd, an investment wing of Bangladeshi conglomerate East Coast Group, later bought ExxonMobils majority stake. MJL still supplies Mobil lubricants, and that brand is the market leader with a 30 percent share of supply. Next is BP at 11 percent, Total at 5 percent and Shell, Castrol and Caltex with 2 percent each. MJL sister company Omera Fuels has a 2 percent share, and the remaining 46 percent is spread over 60 brands.

MJL said the availability of low-priced adulterated lubricants threatens the industry in Bangladesh. Some 46 percent of the lubricant in the country is serviced by small brands, offering low-grade, often adulterated lubricants at low price.

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