BP Wants Bigger Bite of U.S.


Seeing opportunity in the continuing consolidation of the lubes industry, BP Lubricants has announced a campaign to grab a bigger share of the U.S. market.

Officials say the initiative will focus on increasing sales in the general industrial segment but will not involve BPs Castrol brand.

Officials at BP North Americas Baltimore, Md., headquarters acknowledged that the companys business in the United States is not as large as one might expect from the worlds third-largest oil company.

Obviously, the United States is the largest lubes market in the world, so for BP to be successful globally, we have to have a presence here, Vice President of Marketing and Technology Kevin Fitzgerald said. Really, BP has not been around in the U.S. for very long. We kind of reentered the market just before the acquisition of Castrol in 2000.

Fitzgerald declined to disclose BPs current market share or to say how big a share it is aiming for. He did say its business has been strongest in the consumer, commercial and specialized industrial segments and has been relatively contained to Ohio, Indiana, Kentucky and the Southeast.

BP is focusing on general industrial for a simple reason.

As we all know, the industrial sector is a large sector and general industrial is the biggest part of it, Fitzgerald said. In unveiling its campaign, BP announced the launch of nine new products – ranging from spindle and worm gear oils to a synthetic fire-resistant hydraulic fluid, a food-grade grease and a water-soluble cutting fluid. Fitzgerald said the company will continue introducing products to fill in the gaps of the BP product line.

BP believes the time is ripe for expansion in the United States, thanks to the long list of mergers that have transformed the lubricants scene. In the past year, Texaco sold its stake in Equilon to former partner Shell in order to merge with Chevron. Proposals are now pending to combine Conoco with Phillips, and for Shell to buy Pennzoil-Quaker State.

When these acquisitions happen, each company has a network of distributors that they end up rationalizing, Fitzgerald said. Some distributors are happy with the way things turn out and some are not. But there are only a certain number of strong oil companies and lube makers left, and these distributors need partners to help grow their business.

BP has already begun signing up distributors that used to carry other brands. Fitzgerald said it will try to attract more by offering to be a good business partner. He would not say how many distributors BP has in the United States or how many it wants to have.

BPs Castrol will continue to promote its own branded products, but these will not be part of the BP initiative. The parent company wants to maintain different identities for the brands; Castrol will generally be marketed toward customers who want services along with products, BP more to those who want products only.

We want to have both brands in North America, but we dont want to confuse customers by encouraging price [comparison] because they really are different offerings, Fitzgerald said.

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