Lukoil, Russia’s largest lubricant manufacturer and marketer, said it plans to enter Mexico’s lubricants market. Maxim Donde, chief executive of LLK-International, the wholly owned subsidiary of Lukoil, said “Our plans are [to boost sales] in China, India, and then in Mexico,” Russia’s news agency TASS reported.
Lukoil is the eleventh largest lubricant company in the world, right behind Malaysia’s Petronas Lubricants International (PLI), according to data from Germany’s Fuchs, the world’s largest independent lubricant manufacturer.
The announcement comes as no surprise. Recently, the company announced similar moves in Europe. Lukoil Lubricants Europe Oy, the European subsidiary of LLK-International, has aggressive plans to substantially increase its market share in Europe by 2020, said Yaroslav Litvintsev, managing director of the European division.
The move also comes as Russia’s domestic market continues to shrink. The market is expected to decline by 5% this year and remain flat next year, as the country’s economic woes continue to worsen, following the economic embargo by the United States and other Western nations. Russia’s lubricants consumption was 1.6 million tonnes in 2014.
Meanwhile, Russian lubricants production continues to grow. Lukoil’s rival, Gazprom Neft, boosted its production of premium lubricants by 26% to 166,000 tonnes during the first nine months of 2015. The two rivals’ strategy is the same: to grow overseas sales to counter declining domestic demand.