Lubricant Market Shrinks Shell Unification Breaks Out

Affected by the sluggish economic situation, the lube oil market experienced the same decline in demand as gasoline and diesel.

China Lubricants Information Network believes that in the lube market in 2009, the likelihood of a price war and a brand war will start at the same time will reach 70%, while the gasoline engine oil market will become the main battlefield of “soaring”.

After being incorporated by Shell for two years, the lubricant manufacturers must do the same under the current situation of the Great Wall, Kunlun, and even Shell's other lubricant brands.

Market shrinks

According to a statistic, the Asia Pacific region surpassed North America last year to become the world’s largest lubricant consumption area. Among them, the annual growth rate of China's lubricants market before 2012 can reach 7.3%, which is the highest in the world.

For Shell, the world’s leading lubricants supplier, China has become its fastest growing market.

Klein's survey data show that in 2007, Shell accounted for 13% of global lubricant sales. The annual growth of this business in China is 20%, 14% in Indonesia and 8% in India.

However, after the outbreak of the financial crisis, due to the deterioration of the economic situation, the demand for the entire refined oil market has apparently declined.

According to the China Lubricants Information Network, some markets have already experienced the phenomenon that the retail price of the third-tier brands is lower than the ex-factory price of second-tier brands. The same brand of products has even doubled the price difference in different markets. The price is now so chaotic that it can't be messed up again."

Chen Jialu said that after Shell acquired the unified 75% stake, the competition of several major brands did not actually change much. The competition between the domestically produced two brands, the Great Wall and Kunlun, and the international competitions of Shell, Mobil, and Unity is fierce.

For competition with other brands under Shell, such as Heineken, Chen Jialu emphasized that “these brands develop their own markets according to their own strategic perspectives, and there are differences in how they serve the market.” We still follow the original 5-year strategic plan. . ”

Li Jia said, “The things that the current unity can do can be summarized as follows: the same vision, open source, cost-cutting, active change, survival of the fittest and rapid implementation. Among them, throttling includes the control of operating costs and financing costs.”

Increasing marketing efforts is still the main weapon of Shell's unification.

“In the past, reunification was a big investment from the outside, but it is now starting to work hard. However, the marketing efforts are still very large. We have done 300 road shows this year. We have invested heavily in market networks and terminals, and we plan to have more than 3,000 retail stores ( That is, a thousand shop plan." Chen Jialu said.

According to statistics from the China Petroleum and Chemical Industry Association, in November, the daily sales of refined oil dropped 34% from the peak of supply this year.

The lubricant market also witnessed a synchronous atrophy. According to Chen Jiajun, Shell's unified sales director of lubricants, the current decline in demand for the lubricant market “is basically the same as the overall decline in the refined oil market”.

According to the comment of Electromechanical Business Network, after September, the impact of the world financial crisis on the domestic economy has become increasingly apparent, which has brought severe impact on China's real economy. With the slowdown of domestic economic development, the demand for lube oil is sluggish; coupled with the continuous decline in international crude oil, the wait-and-see attitude of customers who are eager to cut prices, and the lack of incentives for dealers at all levels to consume stocks to purchase stocks, the national lubricants Sales fell sharply. The signs of improvement in sales volume in December 2008 have not yet appeared, and the possibility of resolving operational difficulties has waned.

In fact, before the financial crisis, the lube market has been fluctuating.

General Li Jia, general manager of Shell Lubricants, pointed out that in the first half of 2008, the entire industrial chain of the automotive and automotive aftermarket faces the potential problem of soaring inventory, laying the seeds for the development of the market in the second half of the year.

Li Jia believes that “from the fourth quarter of 2008 to February 2009 will be the inventory consolidation period, because this year, all companies did not expect the market will go downhill, so the market appeared a free fall phenomenon - the oil price fell, and then the market Stopped."

“There are many reasons for the current situation. One of them is the panic caused by oil price fluctuations, which has caused inventory reduction in all parts of the country. On the other hand, due to the economic situation, the demand for the truck industry in the second half of 2008 has declined. The business has also caused a great impact." Li Jia said. Before the Olympics, this piece of sales was very high.

Need to break through

Market fluctuations have affected Shell's unification of sales in the second half of 2008.

“We set the figure at the beginning of 2008, and then we will make adjustments every month. If the market goes down for a long time, then we will adjust the target.” Chen Jialu said, “Our fourth quarter's goal has been lowered, but due to the first half of our Overfulfill the mission so it will not adjust the year's goals."

The reporter learned that Shell's unified 2008 sales target for the entire year was 3.6 billion yuan.

However, for the future lube oil market, Li Jia still maintains some optimism: “From the 4th quarter of 2008 to the 1st quarter of 2009, everyone is adjusting their own stocks and adjusting their own psychological expectations. By the second quarter and the 3rd Quarterly, it should enter a more normal state."

However, under the circumstances that the market is shrinking, the Shell unity must break from the encirclement of the Great Wall, Kunlun, Mobil, and even other lubricant brands under Shell, and the current lubricant market has already fallen into the quagmire of price war.

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