For many lubricant companies, the Chinese market is attractive for its size and growth potential but intimidating because of its intense competition. In the automotive engine oil segment, for example, there are hundreds of brands from domestic and multinational companies competing for the attention of increasingly sophisticated passenger car owners.
That is why Amer Lubricant Technology Co., a medium-sized private lube supplier based in Dongguan, Guangdong province, is dedicated to producing industrial lubes, specifically metalworking fluids. In the past decade, it claims to have achieved sales growth of approximately 20 percent per year and expanded from the local Guangdong market to East China with a plant in Suzhou, Jiangsu province. Now it is building a third plant in Tianjin to serve clients in the north.
For small and medium-sized enterprises its really hard to invest a lot of resources to compete in the market, so my suggestion is to focus on one specific product or region and be sure to be always outstanding, Amer President Wang Xiaolong told Lube Report Asia during an interview on the sidelines of the Enmore Lubricant Market Focus conference in Shanghai last month.
Wang makes it clear that even though the company supplies automotive engine oils, industrial lubes are always our priority. Bearing this in mind, it is no surprise that the new Tianjin plant, which is scheduled to start operation sometime by June 2016, will mainly produce Amers industrial products, including synthetic water-based metal cutting oils, copper and aluminum wire drawing oils, rust removers and metal rolling oils. Wang said the Tianjin plant will have capacity to make between 100,000 and 200,000 metric tons per year of lubricants and other products.
We have to develop more eco-friendly and energy-efficient products because China is increasingly tightening its environmental protection regulations, which serve as a guidance for our R&D, Wang said.
However, while insisting products will always be the key to attract clients, Wang also admits products are not enough to keep them.
Lets face the reality. A new product that costs you lots of time and money to develop might be copied in months [by another product with] a much cheaper price tag. In this case you are bound to lose clients, he said.
That is why he urges SMEs to build a strong defensive wall to keep their clients. This wall, he explains, should be a combination of solid customer services, sound client relationships and a diversified sales network.
Wang said Amer is not selling zero-discharge metalworking fluids, but providing our clients a solution to help them comply with the regulations.
In a country with millions of smartphone users, it is hard to imagine any company would neglect mobile avenues of reaching customers, and Amer is not doing that. Not only did it build an online shopping site to sell all of its products, it also has an official account on Wechat to help with marketing. But Wang noted that unlike most consumer goods, industrial lubes require long-term customer services.
The online store allows us to reach potential clients nationwide instantly, therefore it also poses bigger challenges to customer services. You cant do this business without providing timely, quality, consistent customer services, he said.
Amer has 66 offices across China.
While the company sees China as its primary market, it also is seeking opportunities to sell its products overseas.
Honestly we are not very interested in introducing foreign brands to China. Rather, we want to compete outside China, Wang said.