Castrol and Dong Feng Join Hands to Manufacture Lubricants in China
Castrol, the lubricant brand of the BP group, and Dong Feng Group announced today that they are to form a joint venture company to supply lubricants to the growing Chinese market.
The new company, Dong Feng-Castrol Lubricant Co., Ltd, will be based in Wuhan, in Hubei Province, the largest city in central China, and is the first Chinese-based lubricant equity joint venture between a global lubricant major and a leading Chinese automobile manufacturer. Under the joint venture contract, BP, Dong Feng Motor Corporation and Dong Feng Automobile Co Ltd. will have equity stakes of 50:20:30 per cent respectively in the joint venture, which will run for an initial 30 year period.
With a total investment of RMB120 million and total production capacity of 50,000 tons per year, the joint venture will carry out product research and development, manufacturing and the marketing of a range of dual-branded Dong Feng-Castrol automotive lubricant and antifreeze products. In addition, the joint venture's products will be used for both the first-fill and service fills for the full range of Dong Feng automobiles, ensuring all Dong Feng customers benefit from high quality products and service.
Owned by BP, Castrol is a highly regarded global premium lubricant brand with over 100 years of technology leadership and research and development expertise.
"The joint venture will combine Castrol's widely recognized advanced technology, management and marketing expertise with Dong Feng's strengths, which include a highly educated workforce, safety awareness and excellent logistics management," said David Baldry, BP's Group Vice President, Lubricants.
A red and green ribbon was used at the signing ceremony to represent the win-win partnership between Castrol and Dong Feng.
Mr. Ren Shimao, Vice Governor of Hubei Province, indicated that "the co-operation between a world-renowned lubricant specialist and China's leading vehicle manufacturer will, no doubt, bring enormous benefits to the development of the automotive industry in Wuhan and also its neighbouring areas in Central China. It will definitely help to bring lubricant quality and technology development to a new level."
Speaking at the ceremony, Mr. Chen Yan, Chairman of the joint venture company, said: "The Castrol-Dongfeng joint venture will bring us to the forefront of best-in-class partnerships. We firmly believe that such collaboration will make it possible to bring together engine technology development, lubricant technology expertise, international management practices, local market knowledge, an educated workforce and international standard production facilities. All these elements will contribute to the success of this partnership, which in turn will greatly enhance our ability to build our market presence here in China."
"Dong Feng Motor Corporation is known as the world's third largest truck manufacturer and also one of China's top three automotive companies. The partnership with BP represents a strategic move to provide the best products and service offers to our consumers. And we are confident that our collaboration with the leading lubricant specialist will bring us more competitive advantages, through the development of the best product and service offerings, said Mr. Xiang Kaiyong, General Manager of the Joint Venture.
The first Castrol car lubricant was introduced in 1909 and was named after its castor oil ingredient. The company, which has over 150 subsidiaries, operating in some 55 countries, was purchased by BP in 2000.
BP is one of the world's largest oil, gas and petrochemical companies with operations in over 100 countries. Its main activities are exploration and production of crude oil and natural gas; oil refining, marketing and transportation; gas marketing and power generation; and the production and marketing of petrochemicals. The company also manufactures and sells photovoltaic panels for solar power generation and is actively looking at other forms of renewable energy, particularly hydrogen fuel cell technology. The company's current market capitalisation is around $200 billion and it employees around 103,000 people worldwide. BP ranked No.2 on Fortune 500 in 2004.
BP has been operating in China since the early 1970s and has invested over $3 billion in commercial projects. Its activities in China include production and import of natural gas, supply of aviation fuel, import and marketing of LPG, fuels retailing, lubricants blending and sales, petrochemical manufacturing and solar electric facilities. As one of China's largest foreign investors, BP employs over 3,000 staff in China, either directly or through joint ventures.
Established in 1969, Dong Feng Motor Corporation has been one of the key enterprises of Chinese auto industry. And after developments of over three decades, a clear Dong Feng business landscape has been gradually drawn out around key manufacturing bases like Shiyan (specializing in medium/heavy commercial vehicles, spare parts and auto equipment), Xiangfan (specializing in light commercial vehicles and passenger cars), Wuhan and Guangzhou (both specializing in passenger cars), with the business operation headquarters further moved from Shiyan to Wuhan on Sep 28th, 2003. At present, the core business for Dong Feng covers all-range commercial vehicles, passenger cars, spare parts and auto equipment, and takes a 50-50 division between commercial vehicles and passenger cars in terms of finished vehicles. By the end of 2004, Dong Feng has already boasted a total asset of RMB 76.89 billion and a net asset of RMB 33.9 billion, with 106,000 employees registered under the Company.
Further information:
Name: Ms Wendy Silcock
Office: BP, UK
Phone : +44(20) 7496 4358
Name: Mr Jamie Jardine
Office: BP Singapore
Phone : +65 9295 0887
Name: Mr Michael Zhao
Office: BP China
Phone : +86 (10) 6437 6962
Name: Ms Yu Xiaoying
Office: Castrol China
Phone : +86 (21) 3227 4889 - 5218
Name: Mr Yang Xinqiang
Office: Dong Feng
Phone : +86 (27) 8428 5173
