Two-tenths of shares in foreign companies' lubricant market get 80% profit

The domestic lubricant consumption is growing at a double-digit rate every year. Therefore, domestic and foreign energy companies are stepping up the market faster and faster. The reporter was informed on August 18, 2011 that the first Lubricant Technical Service Center of the transnational energy giant Shell in China was put into operation in a high-profile manner in Zhuhai, which is part of its investment of RMB 1 billion to establish a lubricant production base in Zhuhai. Mark Gensborough, executive vice president of global business operations downstream of the group, said in an interview with New Express reporter that in the next 3-5 years, the Chinese market will surpass the United States to become Shell's largest lubricant sales market. In fact, not only foreign investors, but also domestic brands are competing in the high-end lubricants market. Recently, CNPC, Lenovo, and other companies have put into production, R&D and other new actions in this area.

Shell doubles production in 5-10 years

According to reports, the above-mentioned Zhuhai Lubricant Production Base, in addition to the Technical Service Center, also includes its largest lubricant blending plant in Asia and the world's largest grease production plant, mainly to meet the needs of the Chinese market. The first phase of the lubricants blending plant has been put into production and the output is 200,000 tons. After completion of the second phase in 2013, the output is expected to increase to 400,000 tons. The world's largest grease production plant was laid at the end of 2010, and its annual output is expected to reach 40,000 tons. Shen Jian, general manager of Shell Lubricants China, said that including the previously acquired three factories under the unified lubricants, Shell currently has seven factories in China, with an annual production capacity of more than 1 million tons. For the past four years, Shell has been the world's No. 1 supplier of international lubricants. Especially in recent years, Shell's sales of lubricants in China have both experienced double-digit growth, making it the fastest-growing market for this business. For such a large-scale investment, Shen Jian said that he is optimistic in the long run. “China’s automobile population is only 30-40 vehicles, which is about ten times that of developed countries. The auto industry still has room for development. Therefore, the company will have a series of expansion plans in the future, striving to double its output within 5-10 years. ”

China is the largest market in the world

Since 2009, the purchase tax for small-displacement vehicles has been halved, old-for-new vehicles, and subsidies for energy-saving vehicles have been introduced. The domestic auto market has expanded rapidly and the market demand for lubricants has risen. Data show that the apparent consumption of lubricants in 2010 was 10.729 million tons, an increase of 16.2% year-on-year; the national output was 8.489 million tons, an increase of 15.4% year-on-year. Zhuo Chuang Lubricant Analyst Gong Li said that the Asia-Pacific region is the world's largest lubricants market, accounting for about 35% of the share, while China accounts for over 40% of the Asia-Pacific region.

Treasure Island Lubricants analyst Fumily also said that China has now surpassed the United States to become the largest lubricants market. Major foreign brands currently have production bases in China. On March 5, 2011, Singapore’s oil giant Rocky Mountain built a high-grade lubricant base in Chongqing; subsequently, on March 23, Total built a lubricant blending plant in Tianjin. ; And on May 10, 2010 SK lubricants were built in Tianjin. When the situation in the high-end market monopolized by international brands was very good, domestic lubricants struggled in the market price war. “Foreign brands such as Meifu and Shell have only accounted for 20% of the market, but they have taken 80% of their profits.” Gong Li pointed out, “In developed countries, there are only a dozen lubricant brands, but in China, there are more than 1,000. There are as many as 4,000 or more manufacturers, and most of them are low-end manufacturers."

Local brands are also eager to try

Gong Li said that the current low-end lubricants are being phased out, the high-end market is still not saturated, and domestic brands have begun to pay attention to the high-end market. In recent years, the Great Wall and Kunlun have sought to enter the high-end market and have achieved certain results. On August 11th, CNPC, which owns the Kunlun lubricants brand, cooperated with Shanghai Jiaotong University to build a joint research laboratory for automotive lubricants. The lab will target new frontier fields such as new energy vehicles (EVs). On August 3, Lenovo Group and Lanzhou Institute of Chemical Physics of Chinese Academy of Sciences invested 300 million yuan to build an industrial base in Laixi, Shandong Province. The base will gradually implement 5,000 tons/year of high-end lubricants, 3,000 tons/year of high-end grease and other projects, and the products will fill gaps in the high-end industrial lubrication field in China. It is said that after the base is put into operation, it can realize an annual sales income of 1 billion yuan.

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