Kunlun Lubricant Oil, a subsidiary of PetroChina, aims to increase its market share in China to 60 percent by 2010 from the current 50 percent. It wants to do this through an investment of 2 billion yuan (US$246.6 million), focused on branding integration and improving its sales network.

"That is part of our long-term plan along with the country's 11th Five-Year Plan (2006-10)," Liao Guoqin, general manager of Kunlun Lubricant, told a press briefing yesterday at the company's Beijing headquarters.

Liao also said her company wants to increase its share of the high-end lubricant oil products market from the current position of less than 10 percent to 45 percent in the next five years.

China, the world's second largest energy consumer, last year used a total of 4 million tons of lubricant oil, the high-end market of which is currently dominated by foreign brands such as BP and Shell. These controlled 76 percent of the market in 2004, the Kunlun manager said.

"To reach that goal, we will concentrate our investment in two areas, which include branding integration as well as the expansion in our already-strong domestic sales network," she said.

Liao said the firm hopes the lubricant sector will be PetroChina's most profitable business in the petrochemical segment by 2010, a sector which also includes the production of bitumen and paraffin.

The company currently has total capital of 3 billion yuan (US$370 million), and fixed assets of 1.4 billion yuan (US$172.6 million).

For branding, Liao added, the company's efforts would not only include advertising, but also include spending millions on the research and development of new technologies, expanding its production facilities as well as logistics systems.

"Our current presence in China is obviously not enough to reach our goal," she said.

And on the sales front, it hopes to see a significant improvement next year, as the Beijing-based PetroChina subsidiary will introduce a new sales network targeting end-users. This will be different from that of its competitors, including Sinopec's Great Wall Lubricant Oil and the independent Tongyi Lubricant Oil Co, Liao told the briefing.

(China Daily November 2, 2005)