The Philippines Bureau of Customs implemented a second tranche of its Tax Reform for Acceleration and Inclusion Law, taxing a number of products, including lubricating oils and greases, along with base stocks and lubricant additives.
With Southeast Asian countries attempting to open their doors more to regional trade, many lubricant suppliers are keen to expand into neighboring countries. But observers suggest that brand building and local partnerships are still key to a winning expansion strategy.
Led by double-digit growth in Singapore, the Philippines and Vietnam, automobile sales in Southeast Asia increased 3 percent last year while the regions two-wheeler sales marginally declined, according to ASEAN Automotive Federation data released last week.
Southeast Asia should see healthy demand growth for both industrial and automotive lubricants in coming years, according to a recent report by Ipsos Business Consulting. The industrial market is less competitive, but product distribution is key for all parts of the market, the firm concluded.
Shell recently inaugurated a bulk storage terminal for lubricants in Guiguinto, the Philippines - its first new lubricants facility in the country since the obligatory demolition of its oil depot in Manilas Pandacan neighborhood last November.
Filipino oil giant Petron said its lubes sales in Malaysia grew by double digits last year thanks to marketing at its service stations and increased brand recognition, which it hopes to continue developing as it expands more this year.
Most marketers would agree its not easy to expose a lubricants brand to 4.7 billion people, but Gulf Oil says it can potentially accomplish that by sponsoring the worlds most popular sports team, Manchester United.
Despite a 4 percent drop in Southeast Asias sales of four-wheel vehicles in 2015 and a 12 percent slide in motorcycle and scooter sales, industry analysts still predict growth in regional lubricants demand.
German lubricant marketer Lubricant Consult GmbH opened a blending plant in Binan, the Philippines, saying the facility will serve as its springboard for growth in the surrounding region.
Manila officials toured the Pandacan depot recently to check the progress of three oil firms under a Philippines Supreme Court order to vacate it.
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