Pertamina Lubricant exclusive distributor Business Auto Solutions Pty Ltd (BAS) signed on Thursday a memorandum of understanding (MoU) valued at AU$6 million with ASV in expanding the state-owned company’s trade in Oceania’s two largest economies.

“The Australian market is a big challenge but it is also a big opportunity for Pertamina Lubricants. We are ready to expand our market reach nationally by collaborating with business partners such as ASV,” said BAS chief executive Christian Liadinata in a statement on Monday.

He said that 50 lubricant brands competed in the Australia market and that BAS’ business strategy was remarketing its products through 300 auto workshops in the Sydney Metro area.

Read also: Pertamina views neighbors as potential lubricant market 

ASV will officially start distributing Pertamina lubricants on April 1. The company claims to be Australia’s leading supplier of auto parts for European-made cars.

“We’ve worked with lubricant producers from many countries but this is our first partnership with Indonesia,” said ASV chief executive Vic Soghomonian in the statement.

The deal comes after the landmark Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) came into effect in July last year. Indonesian officials have been encouraging businesses to take advantage of the agreement since then.

The Trade Ministry's national export development director general, Kasan Muhri, said in the statement that the IA-CEPA lowered the import duties imposed on Indonesian products, including automotive products, that entered Australia.

“The Trade Ministry applauds this partnership, especially in accelerating the utilization of the IA-CEPA for Indonesia’s automotive industry,” said Kasan.

Read also: RI to boost export to Australia as IA-CEPA enters into force 

Indonesia’s non-oil and gas exports to Australia grew 14.52 percent year-on-year to $2.41 billion in 2020, Trade Ministry data show. Top export products include textiles, footwear, electronics, paper, rubber and furniture but not automotives and auto-related parts even though the auto industry is one of Indonesia’s strongest manufacturing industries.

As an economist previously told The Jakarta Post, Indonesia’s export strategy in the IE-CEPA was “still fragmented, unfocused” whereas Australia’s was focused on agriculture.

A case in point, the IA-CEPA eases import requirements for Indonesian-made electric vehicles (EV), a product that Indonesian’s auto industry does not produce in scale at the moment.