Peru has been one of the fastest-growing economies in Latin America, with an average annual growth rate of 6.1% over a decade. Since 2014, however, Peru has entered a more challenging period as a result of a host of adverse external conditions, including the decline in commodity prices due to the economic slowdown in China, one of Peru’s main trading partners. Nonetheless, Peru’s GDP growth rate last year remained above the region’s average, according to the World Bank, at 2.4%. Its inflation rate was also a manageable 3.2%, just slightly above its target. The World Bank expects Peru’s GDP growth in 2015 to be similar to that of 2014. However, the lubricants market is expected to decline this year due to a slowdown in vehicle sales.
Despite this less optimistic forecast, Isopetrol Lubricants del Peru plans to grow its lubricants business by 5-7% in 2015. The company has also announced its plan to double its storage capacity in Callao and invest in a new distribution centre. Further, Isopetrol is investing USD 1 million in a new enterprise resource planning (ERP) system, according to Roger Lescano, Isopetrol’s general manager.
The company sells three major brands of lubricant products: Chevron, Gulf and CAM2. To grow its lubricants business, the company, will expand direct selling, and at the same time its distributor operations, primarily using its CAM2 brand of products.In the industrial lubricants segment, however, it will focus on premium products through the Chevron brand.
The firm also wants to boost its market presence in Bolivia, Colombia and Ecuador, with its CAM2 brand of lubricants.
Isopetrol SA initially began as a joint venture (JV) with then Pennzoil Products Co. (now part of Shell). In 2005, Isopetrol SA acquired Pennzoil’s share in the JV. In 2008, the company acquired the rights to produce and market lubricants under the Gulf brand from Chevron. In 2009, Isopetrol acquired the lube blending plant and marketing rights of the Chevron Lubricants brand in Peru. In 2010, Isopetrol SA and Chevron Lubricants del Peru SAC merged to become Isopetrol Lubricants Del Peru SAC.
Currently, Isopetrol Lubricants Del Peru SAC has a lube blending plant located in Callao. Its facilities, which include the lube blending and packaging plant, a quality control laboratory and the main distribution warehouse, occupy an area of approximately 33,000 sq.m. The company also has four distribution warehouses located in the cities of Arequipa, Cusco, Chiclayo and Salaverry.