KUALA LUMPUR: Petronas Lubricants International (PLI) has boosted its stake to 50% in its joint venture (JV) in China, the group’s fastest growing lubricants market.
PLI said in a statement that it had recently acquired an additional 12% share in Yuchai Petronas Lubricants Co Ltd (YPLC), making it an equal partnership between PLI and Yuchai Lube Company.
The statement did not mention the purchase price.
PLI said the increase in share ownership would allow it to achieve sustainable growth and profitability in China’s lubricants market by 2020 and introduce new technologies, diversify its product portfolio and strengthen regional teams.
“China is Petronas’ fastest growing lubricants market where in 2015 alone,” said PLI managing director and group chief executive officer Giuseppe D’Arrigo.
“PLI sold more than 100 million litres of motor oil. We believe China has great potential and opportunities to be the worldwide leader in automotive engineering, manufacturing and technology in the future,”
He said PLI’s partnership with the Yuchai group would bring end-to-end value not just to the lubricants industry, but also to its network of distributors and the end customers.
“We are confident that through this JV, we can contribute progressively and greatly advance the development of diesel engine technology in China,” he added.
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Petronas began its collaboration with the Yuchai group in 2013, when PLI entered into a JV agreement to form the YPLC with an initial share of 38%.
PLI said the company recorded healthy and steady growth at an average rate of 10% within two years. Additionally in 2015, the JV entity established the Guangxi Nanning Yuchai Petronas Lube Co Ltd Research & Development (R&D) Centre.
The centre, located in Guangxi province’s Nanning Science and Technology Industrial Park, also serves as PLI’s global satellite Research and Technology (R&T) centre, particularly for commercial diesel engine lubricants. It was conceptualised and built to complement Yuchai Group’s R&D centre for diesel engine in Nanning, leveraging on PLI’s strong legacy in lubricants technology and its technical expertise as a technology partner in diesel engine and diesel engine lubricant design and development.
The centre covers more than 1,000 sq metres with 30 test installations, capable of carrying out 40 kinds of physicochemical and tribological tests.
“PLI has been a valuable partner to us,” said YPLC chairman Xie Yuqiang. “The new R&D centre, Yuchai’s advanced engine research and technology capabilities, as well as Petronas’ expertise in lubricants development is a winning combination for us to sustain growth, attain profitability and grow customer confidence in our products and services.”
In addition, PLI’s international reach and experience in working with worldwide leading original equipment manufacturers (OEM) have also helped YPLC renew its technological approach to co-designing engines and engine oil for markets worldwide.
“We are looking forward to more successes and breakthroughs in 2016 and beyond. We are confident that together with PLI, we will attain even greater profitability and achieve market leadership soon,” Xie added.
PLI chief of commercial Giuseppe Pedretti said the JV firm’s focus for this year was to further expand its product offering with a robust portfolio that catered to the unique demands of China’s industrial oil sector.
“Our efforts in research and development will also be ramped up to deliver better quality diesel engine oil (level CJ4 and above),” he said.
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