Pertamina to split and move into Europe

Pertamina plans to separate its shipping and lubricants business units as it makes its first shipment of auto lubes to Switzerland and South Africa.

A planned corporate revamp will see Indonesian oil producer, Pertamina, split its Lubricants and Pertamina divisions as part of the company’s long-term strategy to become a world-class energy company by 2023. With a 60% percent share of a highly competitive domestic market, which includes some 1,000 brands, the state-owned company has seen lubricant sales grow by 10%.  It expects to maintain domestic market dominance and increase annual sales to 7000,000 kilolitres.

However, the company is setting its sights on increasing its global presence, as its lubricants exports for the first half of 2012 topped 110,000 kilolitres.  Pertamina is setting a target of 180,000 kilolitres to the end of the year.

The decision to form a shipping subsidiary reflects the growing demand for energy, as annual oil market is predicted to rise by 3-5%. It also exploits the potential commercial advantage created by last year’s extension of the 2005 Cabotage Law to the oil and gas industry, allowing only Indonesian-flagged vessels to operate in Indonesian waters.  A company spokesman commented: “Pertamina Shipping will focus on the development of business of shipping natural gas, like liquefied natural gas and liquefied petroleum gas. We will start by exploring opportunities from within Pertamina."

Meanwhile, two Pertamina shipments to Switzerland and South Africa marked the start of the company’s push into the lubricants market in Europe and Africa. An alliance with Lugano-based Indonaldini Group will see the company begin to promote its products in Switzerland, with its beneficial tax and customs duties.

Extending brand promotion to other European countries will be facilitated by a multilingual marketing staff who are likely to target their message towards customers driving Italian scooters.

In reaching the capital and western parts of South Africa, Pertamina has teamed up with Cape Town-based National Plasterer Group to promote its products. With a potential South African demand for lubricants of as much as 300 to 400 kilolitres per year for its 2.1 million vehicles, it is hoped that the recent shipment to Cape Town will help Pertamina achieve its ambitions to promote its products in Nigeria, Morocco and Egypt.