Japan’s ENEOS establishes lubricant footprint in Pakistan
Following the signing of a sales license agreement with RTX Lubricants in June, the Middle Eastern & African subsidiary of Japan’s ENEOS Corporation launched ENEOS lubricants in Pakistan in late September.
The ceremony was held at the upscale Dolmen Mall Clifton in Karachi, the largest city in Pakistan.
Pakistan is the world’s fifth-most populous country, with a population of 215.3 million, according to data from the Asian Development Bank (ADB). While it has a relatively low motorization rate, according to the latest data available from the International Organization of Motor Vehicle Manufacturers, the ADB estimates a GDP growth rate of 3.9% and 4% in 2021 and 2022, respectively, for Pakistan. The automotive industry in Pakistan is one of the fastest-growing industries in the country, and is dominated by Japanese manufacturers Honda, Toyota and Suzuki.
Thus, not surprisingly, Japan’s largest energy company, ENEOS Corp., formerly JXTG, wanted to be a player in the Pakistani lubricant market, especially with a shrinking domestic market. Not too long ago, another Japanese lubricant manufacturer, Idemitsu, started operations in Pakistan.
Furqan Muhammad, deputy general manager, ENEOS Middle East & Africa, estimated lubricant demand in Pakistan at 400,000 kiloliters per annum. Muhammad is based in Dubai, United Arab Emirates, which looks after ENEOS’ lubricants business in the Middle East, Africa, and Pakistan. ENEOS has a separate entity in India, which looks after the Indian business, including a lube blending plant. In Pakistan, ENEOS uses a toll blender to manufacture its product. The reason for the delay in the product launch until last month was the delay in local production, said Muhammad.
According to ReportLinker, Shell Pakistan Limited, Total PARCO Pakistan Limited, Chevron Pakistan Limited, MAL Pakistan, and Pakistan State Oil Company Limited, account for more than 90% of the market.
Muhammad explained that ENEOS’ lubricants business has been mostly focused on supplying service fill oils or so-called “genuine oils” for Japanese auto manufacturers.
ENEOS’ new strategy in Pakistan is to supply ENEOS-branded lubricant products to independent filling stations, of which there are an estimated 500 out of a total of 3,000 service stations. These independent filling stations unlike those owned by Shell or Chevron, do not offer their own lubricant brands. Recently, Saad Khalid Swati, CEO of RTX Lubricants, signed an agreement with Ghaus Baksh, chairman of MAX Fuels, to market ENEOS Lubricants throughout their retail network in Baluchistan. Baluchistan is the largest of four provinces in Pakistan, in terms of land area. According to the latest available data, Baluchistan has a population of more than 12 million.