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Our Bureau

Hyderabad , April 20

GULF Oil Corporation Ltd (GOCL) is set to acquire 51 per cent holding in the China-based Gulf Oil Yantai (Co) Ltd. A decision to this effect was taken at the GOCL board meeting on Wednesday.

Announcing this, the company said this was its third overseas foray in the last two years, after Gulf Oil Bangladesh and PT Gulf Oil Indonesia and takes forward the company's policy of expanding into neighbouring growth markets.

With the commissioning of the Chinese plant, GOCL and its associate companies will have a total manufacturing capacity of more than two lakh tonnes in the region.

China, with a lubricant market potential of 4.3 million tonnes per annum (tpa), approximately 3.3 times India's market, is considered among the world's top five lubricant markets and is expected to grow at a rate of 5-5.5 million tpa by 2010 and to 6.3 million tpa by 2013, the company said.

GOCL expects that Gulf Oil Yantai, currently catering to some provincial markets, would be marketing all over China to corner at least 5 per cent of the market in the next three-four years.

Gulf Oil Yantai Co Ltd was started in l996 and has manufacturing and marketing operations in Yantai city in Shandong province.

The new capital infusion would be used to build up a new manufacturing facility in Yantai with a capacity of 30,000 tpa.

In a communiqué to stock exchanges, the company said that the new factory would be located in an economic zone with tax benefits.

The new factory would have large base oil storage capacity and the company proposes to use the plant to supply to Taiwan, South Korea, Vietnam, and Japan, as well as aggressively trade in base oils in China.

Commenting on the new venture, the GOCL Managing Director, Mr Subhas Pramanik, said that the acquisition was in line with the company's policy of aggressively expanding into the growing Asia-Pacific market, using Indian technical and managerial expertise and the world-famous Gulf brand.

According to him, the plan was to have strategically located manufacturing plants across the Asia-Pacific region to cater to the growing lubricant market. The company is also looking into the possibility of further forays into the regional markets to consolidate the position of the Gulf brand in the Asia-Pacific region with India as the hub, he added.

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