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From: Lance (World Markets in Oil and Lubricants)
Date: 28 Feb 2003
Time: 02:50:09
Technology and economic growth create demand for the oils and greases that make economies run By Thomas L. Torget --- (ARA) - Change has come to China in a big way, and it has come quickly. ---- “Unless you have traveled to China in the past six months, the image you have is probably out of date," declares Jim Hennessy, Asia Pacific regional director for ExxonMobil Lubricants & Specialties. “The country is modernizing its industrial capacity across the entire geography, from Shanghai to Harbin, from Beijing to Urumqi." Old industrial facilities using outmoded equipment to turn out products of limited quality are rapidly disappearing. "They are being replaced with plants using the world's most advanced technology to manufacture a vast array of high-quality products," says Hennessy. While other economies are struggling to grow at even modest rates, China is expanding at nearly 10 percent a year. Investment in new productive capacity grew 9.3 percent in 2000, and foreign investment is up 14.9 percent. Foreign direct investment is expected to reach $50 billion in 2002. Obviously our team is interested on winning some of that market share on the service side of things; http://www.carwashguys.com/0100802_5.shtml Both Mainland China and Twain have advantageous situations for American companies and our oil and lubricant knowledge. --- Infrastructure expansion -- Meanwhile, the government is aggressively modernizing and expanding China’s transportation and energy infrastructure. For example, more than 120,000 miles of paved roads will be constructed in China between 2001 and 2005, for a total of 900,000 miles -- second only to the total in the United States. An additional 9,500 miles of expressways will provide a network that will join major cities across the entire country. Railway and seaport networks are also being expanded. More than 1,300 miles of railway track were added last year as part of a program to bring total track length to around 50,000 miles by 2005. Over the same period, some 140 deepwater berths will be built, including 50 container berths. Airport construction is on the rise as well. Some 20 projects to either expand or build new airports are under way to handle the growing demand for air traffic. In the energy sector, China has more than 1,000 dam projects under construction to add 78,000 megawatts of power, including the world's largest hydroelectric dam. "All of this construction means there is a mammoth need for modern machinery and the high-quality lubricants that keep it moving,” says Hennessy. Competition and cooperation “There are more than 200 brands of lubricants in the market across China," notes Hennessy. "So our challenge has been to demonstrate the benefits of the technology and reliability of our products over those of our competitors." That approach won ExxonMobil an important contract as a supplier to Sunwin City Bus Ltd. in Shanghai -- China’s commercial center. A joint venture of the Volvo Bus Company and Shanghai Automobile Industry Corporation, Sunwin produces buses that are replacing Shanghai’s aging fleet. “In Sunwin, we recognized a local company that embraced high-end technology through its partnership with Volvo and that valued the technical support and customer service we could offer," says Terry Neal, Shanghai-based China lubricants manager for ExxonMobil Lubricants and Specialties. --- http://www.oilchangeguys.com Oil Changing Guys will be there. --- From cars to steel mills ---- The growth in lubricant demand is occurring across all sectors of the lubricant market -- passenger vehicles, commercial vehicles and industrial machinery. Personal-vehicle ownership is increasing at more than 12 percent a year due to rising incomes and the expanding network of new highways. In addition, the motorcycle population has more than doubled in the past five years and is expected to reach 70 million by 2005. The new highways have in turn strengthened demand for commercial trucks and buses to carry more people and goods across the country. And the government’s focus on rapid infrastructure development is feeding demand for off-road vehicles needed for excavation, mining and road-building. In addition, a growing and modernizing agricultural industry is boosting orders for farm machinery. And growth in the industrial sector, including steel mills, pulp and paper mills, cement mills, power plants and general manufacturing, is very strong. As all these businesses participate in China’s robust economic growth, buoyed by its recent entry into the World Trade Organization, demand for high-quality lubricants continues to climb. While ExxonMobil is enjoying success across all customer segments, one key focus is on products that appeal to performance buyers in the industrial sector. “That area plays to our strength because technologically sophisticated equipment requires the highest-performance lubrication,” notes Hennessy. "Chinese companies want to be sure that the expensive high-quality machines or vehicles they've purchased will run at peak performance for a long time. That provides great opportunities for companies with high quality products that are backed by efficient logistics and responsive service capabilities." Efficient logistics required Because of China’s large size -- stretching more than 3,100 miles from east to west and some 3,400 miles from north to south -- product distribution can be a challenge. ExxonMobil chose to build its presence through a local distributor network. The vast majority of its accounts are served through a network of more than 400 distributors based throughout the country. "In particular, the training of staff and distributors is essential to maintaining our leadership position," says Neal. "We maintain a multimillion-dollar center in Shanghai, where we offer established classroom-style training. We also conduct a wide range of on-the-job seminars and workshops associated with the launch of sales campaigns and to hone selling and technical-support skills. "This combination of well-trained independent distributors and our own internal staff gives us the geographic coverage and the technical expertise that are helping us to expand our market reach." “This is a dynamic business in a dynamic country," adds Hennessy in describing today's business opportunities in China. "Today’s China is technologically sophisticated. We are excited about being involved in a country that has so much development ahead of it." ---- Courtesy of ARA Content ### EDITOR’S NOTE: Freelance writer Tom Torget lives in Kerrville, Texas.
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