Vietnams Growing Market Draws Motul


French lubricants company Motul has acquired a 30 percent stake in Vietnam Lubricants and Chemicals Joint Stock Corp. (Vilube), which a Motul official said gives the company access to the Vietnams rapidly expanding lube oil market.

Motul has had a set-up in Singapore – a toll blending agreement – for about six years, Motul Executive Vice President Yves Junne told Lube Report. Most markets were covered so far, in one way or another, but not Vietnam, Laos and Cambodia.

Junne said Motul looked at the Vietnam market, and came across Vilube, considered one of the main local players. After considering different ways to work together, he said, they came up with the deal where Motul would acquire the 30 percent stake in Vilube. The deal concluded Dec. 8, he added.

He said other benefits to Motul include having a production facility available as the companys first industrial base in Asia and enhancing its status with suppliers as an industrial player in Asia.

The Motul official said benefits to Vilube will include technical support, greater purchasing power because of bigger combined volumes and additional volumes of production. Motul is growing in Asia, Junne said. More grades will see their production transferred from France or Singapore, and new grades will be introduced, based on local blending.

He said Vilube will also benefit from Motuls marketing support in the growing car market and especially in the two-wheeler market, where Motul is considered one of the international leaders. Motorcycle/scooter sales are about one million units per year with many new technology machines from Japan hitting the road, Junne said. The potential of the market is very similar to what the Thailand market represents nowadays, and this size could be reached within the next 15 years.

Geeta Agashe, director of Kline and Co.s Petroleum and Energy Practice, said, we agree that the growth prospects in Vietnam are very encouraging. Our study predicts 10 percent average annual growth from 2005 to 2010 in the commercial automotive lubes segment, 7 percent average annual growth in the consumer automotive segment, 6 percent average growth in the MCO [motorcycle oils]/two wheel segment and 7 percent in the industrial segment.

According to Kline & Co.s study, Competitive Intelligence for the Global Lubricants Industry, 2005-2015, total demand for finished lubricants in Vietnam was an estimated 184 kilotonnes (202,825 U.S. tons), valued at $153.6 million, in 2005. Commercial automotive lubricants led the demand, with an estimated 85 kilotonnes (93,696 U.S. tons), or 46 percent of the total volume. Kline & Co. said consumer automotive lubricants followed, with an estimated 58 kilotonnes (63,934 U.S. tons) or 32 percent of the total, while industrial accounted for 41 kilotonnes (45,194 U.S. tons) or 22 percent of the total.

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