Fuchs already has a foothold in Japan, with a 50-percent stake in Makoto-Fuchs K.K., a joint venture that produces metalworking fluids, corrosion preventives, industrial oils and greases. Still, the company, which is based in Mannheim, Germany, was eager to expand its involvement in the lubricant industrys third-largest nation market.

According to Fuchs, Japan accounted for 5.3 percent of global lubricant demand by volume in 2002, to rank behind the United States and China, which had 21.7 percent and 9.8 percent, respectively.

The Japanese market ishighly dominated by local suppliers, so its always difficult for foreign companies to enter, said Klaus Hartig, Fuchs executive vice president for the Far East. But it is a large lubricant market, and along with Germanyis the largest machinery manufacturer on the planet, so it is advanced technology-wise.

Officials said Fuchs and Makoto-Fuchs will cooperate closely with Nippon Koyu on technology, supplies, production and marketing. Nippon Koyu operates two grease plants, employs 125 people and had sales of Yen 4.1 billion (U.S. $34.6 million) last year. Makoto-Fuchs also runs two plants, employs 66 and had sales of Yen 2.2 billion last year.

Express Oils, the Western Australia distributor, is a small firm, with sales of just 7 million Australian dollars (U.S. $4.7 million) in 2002. Nevertheless, officials said it offered an important vehicle for geographic expansion for Fuchs Lubricants (Australasia) Pty., which operates blending plants in Perth, Melbourne and Newcastle. Fuchs subsidiary for Australia and New Zealand employs 131 people and has sales of 60.4 Australian dollars so far in 2003.