United Global, a newly-listed manufacturer and trader of lubricants, is working on a breakthrough in its business in China. Its partner is CNOOC, the largest producer of offshore crude oil and natural gas in Chinaa.
This partnership looks to be a key catalyst for growth but the timeline is undisclosed.
CNOOC had sought out Singapore-based United Global in 2014.
At an investor briefing recently, United Global's CEO, Jacky Tan, was asked: How did CNOOC get to know of United Global?
He recounted that CNOOC, which has oil exploration vessels deployed in Indonesia, has long used the shipyard services provided by a related party of United Global.
That's how word got around to the relevant bosses in CNOOC regarding United Global.
On why United Gobal is attractive to CNOOC, Mr Tan said his company, among other things, has the Singapore brand name and a network of distributors in more than 30 countries.
The two will co-own a new brand of lubricants called HydroPure (海特宝) produced by United Global's plant in Tuas, Singapore.
CNOOC will distribute it in China while United Global, outside of China.
The first step they seek to achieve is to switch CNOOC's internal usage -- which is sizeable -- to HydroPure after it has been tried out within CNOOC.
Mr Tan acknowledged a challenge: CNOOC's on-the-ground staff are familiar with other lubricant brands. And they have good relationships with distributors of those brands.
To effect a switch is not as simple as the management giving orders for it to happen.
United Global gets minimal revenue from CNOOC currently but the potential is certainly vast.
In addition, there are plans to deepen the partnership.
The two parties will market HydroPure to CNOOC’s customers, and to the international consumer market.
Meanwhile, United Global derived 19% of its US$99.9 million revenue in FY15 from China.
United Global sells 3 other brands of lubricants in the premium range and mid-range and for tender projects.
|Klang --> S'pore --> Australia --> Indonesia --> S'pore|
|Jacky Tan grew up in Klang, Malaysia. He came to Singapore at 16 and went to a polytechnic. Next, he headed to Australia where he took up a Bachelor of Applied Science in Building degree course in the University of Canberra.
After graduating in 1991, and marrying Ety, also a University of Canberra alumnus, he moved to Indonesia to join his father-in-law's quarry and mining business.
He also gained some experience in the oil industry through procuring lubricants for the family business.
In 1998, he relocated with his family to Singapore where he and his father-in-law, Wiranto (now aged 76 and is the non-executive chairman of United Global), established United Oil (which became a subsidiary of the listco).
They bought an idle lubricant blending facility in 14, Tuas Drive 2 from an international oil company.
Today, after being upgraded with new tanks, pipelines and filling lines, the plant has an annual production capacity of 44,000 tonnes.
Its lubricants and specialty fluids for automotive, industrial and marine applications as well as metal working fluids, are sold in over 30 countries and territories.