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Pertamina to build lubricant plant overseas to boost sales

State oil and gas firm PT Pertamina announced Thursday that it plans to set up a lubricant plant in an Asian country with a total investment of around US$35 million (Rp 308 billion)

The Jakarta Post
Jakarta
Fri, March 4, 2011 Published on Mar. 4, 2011 Published on 2011-03-04T10:00:00+07:00

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S

tate oil and gas firm PT Pertamina announced Thursday that it plans to set up a lubricant plant in an Asian country with a total investment of around US$35 million (Rp 308 billion).

The company’s product and business development manager, Andria Nusa, said Pertamina was currently conducting feasibility studies in Japan and China to determine the best place to construct the plant.

“Japan and China have recently become the sexiest markets in Asia. The people in the two countries have high purchasing power, demand high quality of service and are quality oriented,” he told reporters after a seminar at the company’s office in Jakarta.

This year, Pertamina planned to boost lubricant sales to 546,000 kiloliters, an increase of 20 percent from 458 kiloliters in 2010, he said. The company also planned to penetrate markets in Saudi Arabia and Germany, among others, in 2011.

“We’re now studying the possibility of entering the markets of Saudi Arabia and European
countries, such as Germany,” Andria reported.

He added that currently, Pertamina’s lubricants had been sold in 10 countries, including Belgium, Pakistan, United Arab Emirates, Myanmar, Singapore, Taiwan, Philippines and Australia.

“We hope that in the near future Pertamina can be a world-class lubricant producer,” Andria said.

There are three categories of the world’s lubricant producers — major players with total sales of between 3 and 6 million kiloliters per year, second major players with total sales of between 1 and 3 million kiloliters, and medium players with total sale of between 600,000 and 1 million kiloliters.

“With our target this year, we’re getting closer to becoming one of the world-class lubricant producers in the world,” he claimed.

Pertamina produces about 500,000 kiloliters, or one-third of the country’s total production of 1.5 million kiloliters, of lubricant per year. The country’s lubricant consumption is around 750,000 kiloliters per year.

Indonesia, the largest economy in Southeast Asia, has recently emerged as one of the most attractive target markets for lubricant makers due to the remarkable growth of its automotive industry.

The country’s automobile sales reached 764,710 units in 2010, while motorcycle sales exceeded 7 million. The Indonesian Automotive Industry Association (Gaikindo) forecast that car sales may top 850,000 this year.

Anglo-Dutch Royal Dutch Shell announced in mid February that the company would construct a US$100 million lubricant plant in the western part of Java with a total capacity of 100,000 tons per year.

Andria revealed that Pertamina would not build a new lubricant plant in the country this year, and would instead renovate and maintain existing plants, including one in Gresik, East Java, whose production capacity was 110,000 kiloliters.

The company announced earlier that it had set a profit target of Rp 17.7 trillion, a 10 percent increase from Rp 16 trillion in 2010.

—JP/ Rangga D. Fadillah

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