Kunlun Marine Oil Goes Global with Head Held High - A Record of PetroChina Kunlun Marine Oil's Market Expansion

2003: COSCO designated Kunlun marine lubricant as its only domestic oil brand.
2007: Kunlun marine oil joined the ranks of ExxonMobil and BP to become one of the three marine oil suppliers to Maersk, the world's largest container shipping company. Kunlun marine oil achieved a historic breakthrough in overseas markets.
2009: In March, a contract was signed with COSCO to supply lubricants for the whole ship of a newly built VLOC (300,000 dwt). This ship type is currently the world's largest bulk carrier, and its machinery adopts the most advanced international technology, so only a few international oil companies were able to complete the supply and service work. One contract demonstrated the true strength of Kunlun marine oil.
In June, a long-term agreement was signed with a Greek oil company to supply oil annually to its serviced vessels in the Asia-Pacific region.
In September, Kunlun marine oil beat five internationally renowned oil company brands to win the contract to supply oil for COSCO's newly built 5,100 TEU container ships, filling the gap for Kunlun marine oil in newly built large container ships. PetroChina Lubricant Company became the only domestic oil company able to supply the newest and largest tonnage vessels, and the first domestic oil company to truly provide a complete, independent and systematic service package for new ships.
In September, Kunlun marine oil was successfully pumped into a container ship served by Rosneft, a globally renowned oil and gas company, at Shanghai Waigaoqiao. This marked the formation of a global marine oil cooperation alliance between PetroChina Lubricant Company and Lukoil and a brand-new step toward the global supply of Kunlun marine oil.
Joining hands with Maersk and becoming COSCO's only domestic oil brand - the Kunlun marine oil brand is demonstrating the charm of made-in-China in the international lubricant market.
Within a few years, the product mix of Kunlun marine lubricants was rapidly optimized: from more than 50 percent system oil in 2002 to 35 percent cylinder oil and 38 percent medium-speed engine oil in 2008, with system oil falling to 22 percent, truly forming a structure that matches the oil consumption of large shipping companies and the marine oil sales of major international oil companies.
Kunlun marine oil's market development path has undergone a transformation from start-up to steady progress and from the domestic market to the international one.
Because ships are highly mobile, technical service levels are demanding and supplies must be timely and convenient, international oil companies provide one-to-one service to vessels. To professionalize and unify the management of its marine oil marketing business, PetroChina Lubricant Company established the East China Lubricant Sales Branch in December 2001. In early 2002, the PetroChina Lubricant Company Marine Oil Customer Service Center, which consolidated the marine oil business, was established in Shanghai.
Before the founding of PetroChina Lubricant Company, 90 percent of the domestic marine oil market was held by five internationally renowned oil companies. To develop the market, the Marine Oil Customer Service Center started with large domestic shipping enterprises such as COSCO and China Shipping Group. With the aim of promoting national brands and increasing the replacement of imported oil with domestic oil, its sales staff carried out a series of promotional and sales activities. In 2003, COSCO designated Kunlun marine lubricant as its only domestic oil brand. At present, more than 90 percent of COSCO's domestic trade vessels use Kunlun marine oil, and Kunlun marine oil accounts for more than 70 percent of the domestic oil used by China Shipping Group and China Yangtze River Shipping Group.
After establishing a firm foothold in the domestic market, the Marine Oil Customer Service Center entered international markets in accordance with the group company's requirement that Kunlun lubricant achieve domestic fame and international standing.
To do a good job, one must first sharpen one's tools. Moving from inland and coastal waters to ocean-going and overseas trade is a big leap. How could they break through the bottleneck and achieve greater development? After careful consideration, they decided to start with international product certification.
To obtain international certification, one must first be excellent in oneself and possess a series of high-quality products. Kunlun's marine cylinder oils, marine system oils and marine medium and high speed trunk piston diesel engine oils, the full range of products needed for complete ship lubrication, are of outstanding quality. The DCC3008 marine system oil and DCA5070H marine cylinder oil completed sea-trial certification tests with MAN and WARTSILA and obtained certification, making Kunlun the earliest and only domestic marine oil brand certified by the world's two major marine diesel engine manufacturers, MAN and WARTSILA.
With this impressive calling card in hand, the door to overseas markets swung open.
At present, the Marine Oil Customer Service Center supplies several thousand tons of marine oil each year to Maersk and other overseas users, including the world's largest and most technologically advanced 11,000 TEU container ships, raising the profile of the Kunlun brand.
Having opened the market door, how could they grow stronger and bigger? The Marine Oil Customer Service Center realized that only by continuously improving its network and its oil supply service level could it succeed. They concentrated supply advantages from across the country to build a unified oil supply service network covering coastal and Yangtze River ports, with unified deployment and shared access for all users, making it convenient for users to purchase in other locations, removing their worries about off-site supply, strengthening their trust in Kunlun marine oil and stabilizing the market.
In October 2005, the Marine Oil Customer Service Center successfully selected a plant and set up a supply point in Singapore. Kunlun became the first domestic lubricant brand to establish an overseas supply point. In 2007, another supply point was set up in Hong Kong, laying the foundation for developing ocean-going markets.
By improving service at the Singapore and Hong Kong supply points and building a professional technical service team overseas, the Marine Oil Customer Service Center integrated its domestic and international oil supply networks.
Ocean-going users such as Maersk and COSCO began to use Kunlun marine lubricants in large quantities.
At present, Kunlun marine oil holds three domestic firsts: the most complete and most high-end ship certifications, the most complete and widest network, and the largest number of top-quality mega customers.
Complete international certifications, high-quality products and premium services have drawn more and more large international shipping companies to the Kunlun brand. At present, seven or eight internationally renowned companies have proactively expressed intentions to cooperate. Facing a vast overseas shipping market, they have an even bigger dream: to have Kunlun lubricant travel the world with ships and become a first-tier brand in the international marine oil market.
With the right tool, one can take on the finest work
Marine lubricant is the blood of a ship. If a car runs out of lubricant it breaks down, and once it breaks down, refueling and repair are very easy. But if a ship's lubricant fails during a voyage, the consequences are catastrophic. That is why the requirements for marine lubricants are very high in production, sales and technical service alike. This market is also one that is hard to enter but hard to exit once entered.
How can a company secure a place in such a fiercely competitive market? The path taken by PetroChina Lubricant Company is worth exploring.
First, they chose the right path of certification. International certification is an important route to internationalization and standardization. In international market competition, products without certification find it hard to compete with certified products. The more difficult the certification, the more it helps differentiate one's products from uncertified, low-end products.
Second, they continuously improved their service level and service network and seized the opportunities within the challenge. The financial crisis prompted large domestic and international shipping companies to consider costs. At this point, foreign companies turned their attention to Kunlun lubricant, which offered a relative price advantage together with high-quality products and services. Kunlun marine oil also took the opportunity to vigorously develop overseas markets.
The two factors complement each other. With opportunity alone, but without international certification qualifications and high-quality service and networks, foreign shipping companies would not choose Kunlun. In this sense, Kunlun marine oil has moved ahead of the curve, and its experience is worth learning from.