Idemitsu Expands into Mexico


Japanese petroleum giant Idemitsu Kosan established a new lubricant sales company in Mexico that is slated to begin operations in June.

According to an Idemitsu official release last month, Idemitsu Lubes Mexico will have an initial base of U.S. $1.5 million in capital and start with 12 employees, focused mainly on sales.

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The new branch, which will be Idemitsus first direct venture into the Mexican lube market, has set an initial lubes sales target of 10,000 kiloliters per year. This is projected to generate an annual turnover of $22 million by 2015.

Idemitsus new Mexican branch will focus its sales on a range of products, including automotive and motorcycle engine oils, industrial lubricants and other related products. Mexicos demand for lubricants, especially for automobiles and motorcycles, continues to increase at a dramatic pace. In 2012, Mexicos motor-vehicle production grew by 12.8 percent, and Idemitsu predicts strong growth in demand for high-performance lubricants including automotive oil.

Moreover, Carlos Guzman, the head of Mexicos Investment Promotion agency, noted to Bloomberg media last year Mexico intends to expand production by 40 percent by 2015.

Idemitsu representative Miki Shimizu said that the company also views Mexico as an appealing area due to potential as an export base to the rest of the Americas including the United States. In March, 2013, Idemitsu Kosan announced it intends on increasing its investment in lubricant sales overseas.

The lubricants division is currently housed under Idemitsus functional materials directorate which also controls the companys chemicals and agri-bio products. This directorate generated approximately 10 percent of Idemitsus operating income in 2009. However, under the new strategic plan, the directorate is forecasted to generate 25 percent of the companys operating income by fiscal year 2015.

On Nov. 30 last year, Jorge H. Loya Ramirez, CEO and president of Raloy Lubricantes told the ICIS Pan American Base Oils & Lubricants Conference in Jersey City, N.J., that Mexicos finished lubricants had experienced 2.5 percent annual growth over the previous five years, reaching just under 900,000 metric tons. He said Mexican brands have 60 percent of the Mexican lubricant market, and global brands have 40 percent. Top players were ExxonMobil (16 percent of the market), Shell (15 percent), Mexicana (14 percent), Roshfrans (10 percent), Raloy (6 percent), Lubral (5 percent), Chevron (4 percent), BP Castrol (3 percent), Total (2 percent), and all others holding the remaining 25 percent.

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Asia    Finished Lubricants    North America    Region