Nippon Plots Growth in U.S., Asia


Nippon Oil Corp. is ramping up its motor oil business on opposite sides of the globe. Japans largest oil company announced late last month that it plans to quadruple its motor oil sales in the United States from 2001 to 2005. Separately the company said it plans to more than double its sales volume in China and other parts of Asia during the same period.

In the United States Nippon sold 10,000 kiloliters (2.6 million gallons) of motor oil during 2001 and wants to raise that level to 40,000 kiloliters (10.4 million gallons) within three years. The company plans to open a Chicago office dedicated to motor oil sales in January 2003 and recently contracted with Petro-Canada to blend its products. Nippon currently consigns production to ChevronTexaco.

Most of the additional sales are expected to be for factory fill in vehicles built by Japanese manufacturers.

Japanese automakers are increasing production in the U.S. and they are requesting our engine oil, said a spokesman. We feel that we have an advantage because they use our motor oil in the Japanese market, so they know our specs and we know theirs. If we are competitively priced, we believe they will prefer our products. Economics is the most important factor.

The announcement concerning Asia said Nippon sold 4,000 kiloliters in Vietnam, Indonesia, South Korea, Thailand, Malaysia, India, Taiwan and China during 2001. By 2005, the company plans to increase that volume to 10,000 kiloliters. It focused particularly on China, whose burgeoning economy has been growing at annual rates approaching 10 percent. Nippon sold 400 kiloliters there last year but expects the number to grow to 1,000 kiloliters in three years.

A spokesman said the growth in China should be fueled by growing demand for higher quality lubricants.”It is possible that our market share will increase, he said. But we are basing our projections on rapid growth in car sales and the growing demand for better engine oils. In the past, most of the products in the market have been poor quality.

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