Citing a desire to carve out its share of Indias steadily growing lubricant market, Japanese refiner Idemitsu Kosan announced last week that it has formed a wholly owned subsidiary on the sub-continent.
For more than a decade, Idemitsu Kosan has sold lubes in India through a partnership with Mumbai-based Savita Chemicals. The companies will keep that alliance intact to serve domestic companies, but Idemitsu officials said they wanted their own subsidiary to supply factory-fill needs of Japanese original equipment manufacturers.
Our subsidiary will focus on Japanese global OEMs, such as Toyota, Honda and Suzuki, Toru Abe, assistant general manager of Idemitsu Lube India, told Lube Report yesterday. Their sales in India are skyrocketing. It may not sound like a big deal to set up a marketing company, but the potential market in India is a big deal. We believe Indias lubricant market is going to be comparable to Chinas.
Based in Tokyo, Idemitsu Kosan is the third-largest refiner in Japan. The company sells 862,000 metric tons of lubricants per year, 554,000 of them in Japan.
Savita makes specialty products such as paraffins, white oils, petroleum jellies, transformer oils and sulfonates. Through its partnership with Idemitsu Kosan, it has also blended automotive and industrial lubricants at its plant in Mumbai, which it then markets under Idemitsus brand names. Savita will continue to manufacture the full line of Idemitsu lubricants in India, includingfactory fill volumes for Japanese OEMs, which Idemitsus subsidiary will procure. Savita will continue to market after-marketvolumes for customers of those OEMs.
Abe said the partnership sold approximately 24,500 tons of Idemitsu-branded lubes in India last year and expects that number to grow to approximately 27,000 tons in 2007. Sales are currently split about evenly between domestic and Japanese companies, Abe said, adding that Idemitsu Kosan expects both parts of the business to grow.