Kunlun Shines Forth, Riding the 'East Wind'

Part One: Riding on a Favorable Wind
Epigraph: [In March 1939, in the depths of the Gobi, at Yumen below the Qilian Mountains, oil was struck at the Fang well, opening the prelude to the industrial development of the Yumen oilfield. Yumen thus became the first petroleum industry base of New China.]
In May 1950, China's first drop of lubricant was produced at the Yumen Oilfield. That drop of oil held petrochemicals in one hand and a thousand trades in the other. From the day it was born it bore the historical mission of lubricating China's military, its national defense and indeed its entire economy and people's livelihood, reflecting the myriad aspects of New China striding forward.
On May 12, 1958, that drop of lubricant rode into Zhongnanhai with New China's first Dongfeng car. Chairman Mao said happily: 'Good, we are riding in a sedan car we produced ourselves.' China's automobile industry began to totter forward from here, and the lubricants produced by PetroChina began their happy union with 'Dongfeng' vehicles, opening decades of mutual support and of journeying together through wind and rain.
1. Kunlun Bursts Upon the Scene
'Bursting upon the world, wild Kunlun, you have seen all the spring of the human world.' The towering Kunlun Mountains stand on the Qinghai-Tibet Plateau in their unique majestic posture. The mighty Kunlun is the cradle of Chinese civilization and the symbol of the Chinese national spirit. PetroChina unified its lubricant brands under the name 'Kunlun' precisely to take the meaning of 'majestic and far-reaching'.
When 'Kunlun' had not yet swept through the lubricant market carrying PetroChina's genes, PetroChina's lubricants had in fact already written a glorious chapter in the history of China's lubricant industry. As early as the 1930s China's petroleum industry began to emerge. After the founding of the People's Republic, in order to meet the needs of national defense construction and national economic development, China accelerated independent research and development of lubricants. In May 1950, at the Yumen Oilfield, the birthplace of China's petroleum industry, lubricant was produced for the first time; in October 1954 lubricating grease was successfully trial-produced; in December 1955 gear oil was successfully trial-produced; and in 1956 turbine oil, compressor oil and cylinder oil were successfully trial-produced. Subsequently, in Lanzhou, Dalian, Dushanzi and other places, various types and grades of lubricating oils and greases were produced one after another. These lubricants were successively named Feitian, Qixing, Qilian and Tianshan, and together with the later 'Daqing' brand and others they formed the predecessors of PetroChina's 'Kunlun' lubricant.
Relying on their excellent quality, these brands not only guaranteed oil supplies for national defense but also took it as their duty to develop the national economy, developing urgently needed lubricating oils and greases for the large and advanced equipment introduced in the automobile, metallurgical, coal and building materials industries and meeting the demand of all sectors for mid-range and high-grade lubricants.
Among them was No. 2 Automobile Plant, later Dongfeng Motor Corporation.
In 1969 China's first automobile manufacturing plant designed and built independently by the Chinese, No. 2 Automobile Plant, was born in Shiyan. Premier Zhou Enlai defined its construction plan as a medium-duty truck production base. In 1975 'Dongfeng's' first truck, the 2.5-ton EQ240 off-road vehicle, went into production. In 1978 the 'Dongfeng' 5-ton truck went into production and the 3.5-ton off-road vehicle passed national appraisal. In the years that followed, Dongfeng brand trucks became popular throughout the country with virtually no rival at home. In the self-defensive counterattack against Vietnam, the military vehicles produced by No. 2 Automobile Plant showed outstanding off-road performance and the plant became famous overnight.
While Dongfeng vehicles were dominating the scene, 'Feitian' lubricant, one of the predecessors of Kunlun Lubricant and known as the 'ancestor' of New China's lubricants, had always supported them quietly from behind. 'Feitian' was designated as the factory-fill oil for Dongfeng vehicles.
In 1983, Song Jiulin, now retired and formerly deputy director of the Lanzhou Lubricant Plant, came to the Lanzhou Lubricant Plant, then subordinate to Lanzhou Petrochemical. He recalls: 'In the 1980s Feitian oil sold extremely well. Many customers would be queuing in the plant area late at night waiting to buy it with their approved slips. At that time, in order to support the development of the national automobile industry, we established a strategic cooperative relationship with Dongfeng and gave priority to guaranteeing Dongfeng's oil supply.'
It was also in the early 1980s that Dongfeng Motor, having just begun volume production, generated enormous economic benefits. In the five years from 1980 to 1984, total profit was 1.14 billion yuan and profit handed over was 688 million yuan.
In 1992, No. 2 Automobile Plant was renamed Dongfeng Motor Corporation. A year before that, Lanzhou Petrochemical had set up a technical and economic cooperation committee with it, initiating an annual mechanism of high-level mutual visits and forming a close partnership. It was during this period that Dongfeng Motor Corporation ran into a major crisis. In the 1990s the construction of light vehicle and car projects became a threshold that China's auto industry could not avoid, and Dongfeng had to keep up with the times. But it lacked its own funds, and the state had begun to implement the policy of transferring fiscal allocations into loans, so it had to borrow from banks to carry out construction. Miao Wei, then general manager, admitted that at the beginning of his term the thing he feared most was paying wages: 'With more than 100,000 employees, one round of wages takes over 100 million yuan. In that period the employees looked forward to payday while the boss dreaded it.'
Funds were difficult, and on top of that the truck market was depressed in the late 1990s. Dongfeng vehicles were seriously unsold, and the situation was so severe that it was almost waiting for the last straw to break the camel's back. Song Jiulin says: 'During the period when the chain of debt was rife, Dongfeng at its peak owed Lanzhou Refinery nearly 100 million yuan, one tenth of the refinery's external receivables. Even in such difficult times we did not break off supply to Dongfeng.'
Supporting each other and sharing hardships: in the difficult days of PetroChina Lubricant Company, Dongfeng Motor also gave selfless help.
PetroChina is one of the highest-ranked Asian oil companies among the Fortune Global 500, yet it had no brand with a worldwide reputation. In order to build a world-class brand, in July 2000 PetroChina integrated its lubricant business, straightening out every link from production and R&D to sales and establishing a scientific business model suited to the market development characteristics of the new situation. The Lanzhou Lubricant Plant, together with 13 production plants including Dalian, Karamay, Daqing No. 1 Plant, Daqing No. 2 Plant, Fushun, Liaohe, Dushanzi and Chengdu, and the Lanzhou Lubricant R&D Center and the Dalian Lubricant R&D Center, were merged into the Lubricant Company. Guided by the strategy of 'five unifications and one centralization', the Lubricant Company integrated the brands 'Feitian', 'Qixing' and 'Daqing' under its wing, and the brand 'Kunlun', grand and magnificent, burst upon the world.
When the Kunlun brand was first launched, PetroChina Lubricant Company did not immediately carry out aggressive publicity, yet Dongfeng Motor accepted it very naturally. Song Jiulin says: 'After PetroChina Lubricant Company was established, the cooperative relationship between the former Lanzhou Refinery and Dongfeng Motor continued to be maintained by the Lanzhou Lubricant Plant. The reason the other side could accept us so quickly is that the two sides had cooperated for many years and knew each other thoroughly and had deep feelings. Although our reporting line changed, the people did not change and the quality and service changed even less.'
'You gave me a plum, and I return a fine jade. Not as a repayment, but to be friends forever.'
As one of China's extra-large automobile manufacturing enterprises, Dongfeng Motor Corporation is a pillar enterprise of the national auto industry. Its sales of medium and heavy vehicles and its market share have ranked first in the industry for many years, and it is an outstanding representative of the domestic medium and heavy truck industry. Being accepted by Dongfeng Commercial Vehicle, which firmly holds first place in the domestic truck industry, allowed Kunlun Lubricant to gain a foothold in the medium and heavy vehicle market quickly.
2. Refusing to Believe the East Wind Cannot Be Summoned Back
Before the 1990s, the production and sale of lubricants in China were allocated uniformly by the state. With the advance of energy system reform, the lubricant market became the earliest and most open sector of China's oil industry and also the most fiercely competitive product market. On the one hand famous foreign lubricant brands such as Mobil, Shell, Fuchs and BP rushed to land in the high value-added, high-profit premium lubricant market; on the other, because low-grade lubricant production had low barriers and was easy to process, small workshop oil enterprises swarmed in and hundreds of lubricant brands fought it out.
Although the good and the bad were mixed together, fully competitive lubricants gave industrial enterprises more room for choice. In order to better reduce costs and win benefits, Dongfeng Commercial Vehicle continuously diversified its policies toward oil suppliers.
There were two hurdles during this period.
In 2003 Dongfeng and Nissan set up China's largest automobile joint venture. Afterwards Dongfeng Motor Co., Ltd. established a new organizational system, marketing system, procurement system, financial analysis method, value outlook and new evaluation standards, introduced a large number of international advanced management methods and new concepts, and selected suppliers by means of tendering, inspection and research and analysis of oil products. Song Jiulin says: 'This inevitably affected the cooperation between Kunlun Lubricant and Dongfeng Motor, making our cooperation with Dongfeng Commercial Vehicle increasingly difficult.'
To make matters worse, foreign brands eyeing China's automobile market saw its powerful energy and potential and began to change their marketing strategies in the Chinese market.
In 2005 the BP group and Dongfeng Motor established a joint venture lubricant company, later Dongfeng Castrol Oil Products Co., Ltd. The establishment of the joint venture changed the pattern of cooperation between Dongfeng Motor and other lubricant manufacturers. Castrol lubricant was first used as the factory-fill oil and after-sales service oil for vehicles under the Dongfeng umbrella.
Song Jiulin says: 'In that period the supply relationship between our plant and Dongfeng Commercial Vehicle also changed: from being the main oil supplier we became one of several suppliers, and no longer in the dominant position.' An important factor behind this change was that Dongfeng Motor not only entered into a joint venture but also brought in many suppliers, from large lubricant companies to small and medium private enterprises, all supplying Dongfeng Motor Co., Ltd.; in addition, private enterprises used their flexible marketing methods to capture a share of the automotive oil market of Dongfeng Commercial Vehicle.
Faced with this unfavorable situation, the Lanzhou Lubricant Plant worked hard through products and service to maintain its friendly cooperative relationship with Dongfeng Commercial Vehicle Co., Ltd. while quietly waiting for an opportunity.
The cuckoo weeps blood even at midnight; I refuse to believe the east wind cannot be summoned back.
The turning point began in 2006, when Dongfeng Commercial Vehicle put its factory-fill oil out to tender for the first time and sent a tender letter to the Lanzhou Lubricant Plant. More than a dozen well-known domestic lubricant suppliers and small and medium private enterprises took part in the tender. On receiving the tender letter, the leaders of the Lanzhou Lubricant Plant attached great importance to it, personally chairing meetings and organizing staff from production, quality, finance and operations to make an in-depth study and analysis of the oils tendered for by Dongfeng Commercial Vehicle, and produced a very detailed tender specification centred on the flagship product 85W/90 vehicle gear oil. After fierce competition, Dongfeng Commercial Vehicle finally confirmed only three suppliers, and the Lanzhou Lubricant Plant was honoured to be one of them.
At the end of 2007, Dongfeng Commercial Vehicle and the Lanzhou Lubricant Plant signed a two-year 'Framework Agreement on Factory-Fill Oil' for a total volume of 8,300 tons, taking their cooperation to a new level.
In October 2008, in order to further enhance mutual understanding and expand cooperation, the Lanzhou Lubricant Plant invited leaders of relevant departments of Dongfeng Commercial Vehicle responsible for technology, procurement and finance to visit and exchange views, and held a feasibility discussion on cooperation in after-sales service oil. In the end the two sides agreed to promote a dedicated oil for Dongfeng Commercial Vehicle, jointly build a Dongfeng oil guarantee system, ensure the safety of oil use for Dongfeng Commercial Vehicle, and reached a cooperation concept.
It was also in 2008 that the volume of lubricant sold by the Lanzhou Lubricant Plant to Dongfeng Motor began to surge, opening up a new world for cooperation between the two sides.
3. When the East Wind Comes, Spring Fills the Eye
'Jujubes, goji berries and honey are the three treasures of women and must never be stopped...' When it comes to health preservation, Shi Hui, a middle-aged customer manager at the Lanzhou Lubricant Plant, is quite an expert. Fond of keeping herself in good condition, she brews goji berries and jujubes as soon as she gets to work, though she often has no time to drink it. 'At present our plant sends 6 to 8 batches of lubricant products to Dongfeng every month, five or six railcars each time. I have to verify Dongfeng's procurement plan, follow up on production progress, base oil procurement, dispatch times, arrival and the collection of payment, and so on through every link. For years these have been responsibilities that need no reminding, and in between I keep answering phone calls and replying to QQ messages, so busy that I am spinning round.'
Being busy is one aspect; on the other hand, Shi Hui's mind is on edge every day: 'Has the railcar left? Has it arrived? Is the metering up to standard?' Even so, seeing the growth in sales volume she is delighted. She often takes out the table of growth in the Lanzhou Lubricant Plant's supply to Dongfeng over recent years and looks at it: 'When I see it I feel especially comfortable and especially proud to be a Kunlun person.'
The most notable growth year on that table is 2009. Before 2008 the figure hovered at two or three thousand tons; in 2009 it leapt to 5,029 tons, then exceeded 13,000 tons in 2010, and reached more than 20,000 tons in 2014. The reason for such a large increase is that 'we broke into Dongfeng's after-sales service oil market'.
As if a night of spring wind came, and thousands of pear trees burst into bloom.
Although automobile production cannot bloom everywhere, as China's auto industry develops rapidly, services around automobiles seem to have blossomed overnight across the land. Dongfeng Motor was no exception.
Today Dongfeng Commercial Vehicle has developed 400 dealers and 820 service stations, forming a marketing and service network across the country. But at the beginning of that network building, Dongfeng Motor was not satisfied with its service stations because of backward service concepts, a low degree of specialization, extensive management, chaotic market order and insufficient systematization. Song Jiulin says: 'This dissatisfaction showed in service oil as well. At that time Dongfeng Motor used a very mixed variety of service oils, with all kinds of profiteering genuine products accompanied by counterfeits and shoddy goods, which seriously affected Dongfeng Motor's reputation.'
Even today, recalling how they were able to break into the Dongfeng Commercial Vehicle service oil market, Song Jiulin says: 'What we relied on was decades of PetroChina's leading lubricant technology, stable quality and excellent service. We are the supplier holding Dongfeng's material technology approval certificate No. 001 over the years.'
This was a win-win cooperation. Dongfeng used the opportunity of unifying service oil to standardize its hundreds of service stations and dealers; after Kunlun lubricant products entered the service stations, their colour and brightness gradually became the standard by which customers procured and used service oil, and later entrants could not shake it.
In 2008, after the first batch of after-sales service oil was admitted to Dongfeng Commercial Vehicle, benefiting from the rapid development of Dongfeng Commercial Vehicle Company, the volume of Kunlun Lubricant supplied to Dongfeng Commercial Vehicle kept growing. At the end of 2011 Dongfeng Commercial Vehicle and PetroChina Lubricant Company signed a close strategic cooperation agreement. This marked a new stage in all-round cooperation between the two sides in product supply, technical cooperation and brand win-win.
As one of the first strategic cooperative suppliers of raw materials for Dongfeng Commercial Vehicle, the Lanzhou Lubricant Plant kept improving in order docking, production guarantee, dispatch guarantee and service support, building a fairly competitive rapid guarantee system that continuously met Dongfeng's requirements for accuracy, quality, resources and timeliness.
Shi Hui says: 'For the oil plans submitted by Dongfeng Commercial Vehicle, our plant gives them top priority: priority blending, priority use of scarce base oil and priority scheduling, and we have formed an OEM green channel that guarantees supply in good time.' Because Dongfeng Motor Corporation has limits on inventory and unloading, the logistics operations department requested balanced monthly dispatch, with dispatch intervals of 3 to 5 days and 6 to 8 batches shipped each month. Shi Hui and her colleagues in the department planned ahead every time for dispatch, carried it through in every detail and guaranteed the accuracy of delivery times in good time.
Dongfeng Commercial Vehicle's procurement system rotates its procurement section chief every three years, and a colleague in Dongfeng Commercial Vehicle's procurement department once joked: 'Shi Hui has managed three of our leaders.' Yet each of those leaders has had a harmonious relationship with Shi Hui and with the Lanzhou Lubricant Plant, and behind that harmony lie her warm working attitude, her selfless work spirit and her love for Kunlun.
Climbing Kunlun and gazing in all directions, the heart soars and swells.
With the joint efforts of production, R&D, sales and service working as one, the cooperation between PetroChina Lubricant Company and Dongfeng Commercial Vehicle Company has risen to a higher level every year.
From 2009 to 2012, PetroChina Lubricant Company supplied a cumulative 37,935 tons of factory-fill and service oil to Dongfeng Commercial Vehicle Company, with an annual growth rate of more than 45 percent.
In 2013, through the efforts and friendly cooperation of both sides, the total volume dispatched in the year exceeded 20,000 tons, reaching the highest level in history. Of this, sales of the CH-4 premium oil series reached 13,307 tons, 85W/90 heavy-duty vehicle gear oil 4,076 tons, 85W/140 heavy-duty vehicle gear oil 1,255 tons, manual transmission fluid MT-1 85W/90 1,618 tons, and other packaged oils (including long-life gas engine oil) 120 tons.
In 2014 a total of 23,972 tons of various oil products were sold to Dongfeng Commercial Vehicle Company, an increase of 17.6 percent over 2013. Of this, the CH-4 series accounted for 17,068 tons, more than 70 percent of the total, reaching the highest sales volume in history.
Part Two: Kindred Spirits as Great as Kunlun
Epigraph: [Kunlun is the ancestor of all mountains and the forefather of the dragon vein. With its majestic momentum it runs across the middle of Asia and is praised as the 'backbone of Asia'. The east wind enters where there is the finest crack and fills wherever there is the greatest expanse; a gentle breeze brings a spring of a thousand colours.]
Kunlun and Dongfeng, both well-known brands of large state-owned enterprises, one majestic and one nimble, one providing support and one forging ahead with speed, are a match made in heaven. Wang Mingji, deputy head of the materials procurement department of Dongfeng Commercial Vehicle Co., Ltd., says: 'Although Kunlun and Dongfeng are in two different industries, both are at the forefront of their industries in technology. The two sides carry out matching research and development and jointly promote product upgrading. The cooperation model between the two sides is one of leadership and demonstration.'
'Leadership' and 'demonstration': two simple words sum up the cooperation model by which Dongfeng and Kunlun have, over decades, worked together as smoothly as a fish in water and brought out the best in each other.
1. Synchronized Research and Development
'One mountain has four seasons, and ten miles have different weather.'
Baoshan is located in western Yunnan Province, where the highest altitude in the area is 3,780 meters and the lowest 535 meters. Because of the great difference in altitude, the local roads have long and steep gradients, and about 60 percent of the vehicles travelling there are driving on slopes, where speed cannot exceed 32 kilometers per hour and the engine works under heavy load at all times; it is the region with the most demanding requirements for vehicle gear oil in China.
In 2007, PetroChina Lubricant Company and Dongfeng Commercial Vehicle conducted a road test of 85W/90 MTF18 manual transmission fluid in Baoshan, Yunnan. The test covered essentially all of Dongfeng's vehicle models at that time. The test showed that Tianhong MTF-18 withstood the high-intensity road test, achieving an oil change interval of 100,000 kilometers, four times the oil change interval then specified for Dongfeng vehicle transmissions, and saving about 357.5 yuan in oil change costs over the same period. At the same time, Tianhong MTF18 protected the normal use of the gears and met the conditions of the transmission working at high temperature, extending the inspection and repair cycle from twice a year to once a year or even once every 18 months. And replacing the welded gear teeth and reduction gears once costs more than 2,400 yuan in labour and materials alone...
The outstanding performance of Tianhong MTF18 captured the heart of this number one truck maker in China.
When the news came, Hua Xiuling was very calm. The excitement of this participant in the development of MTF18 commercial vehicle manual transmission fluid had long since passed.
In 1997 the American Petroleum Institute (API) published the new MT-1 specification. Only by following the standard could one win the market. So beginning in 1999, the Lanzhou Lubricant R&D Center began to cooperate with Dongfeng Commercial Vehicle in developing MTF18 manual transmission fluid. Hua Xiuling says: 'During the joint development the personnel of both sides visited each other frequently. Although there were occasional disagreements, we were all working for one common development goal, so the cooperation was pleasant.'
The process was pleasant and the result even more gratifying. MTF18 can not only replace GL-4 but also meets the latest API MT-1 specification, which not only greatly promoted the upgrading of Kunlun lubricant products but also laid the foundation for a comprehensive upgrading of vehicle gear oils. The product won two national patents and one US patent.
The strong cooperation between Kunlun and Dongfeng did not begin with the development of MTF18 manual transmission fluid. Fu Xisheng, director of the Lanzhou Lubricant R&D Center, says: 'We began synchronized development with Dongfeng Commercial Vehicle in the 1980s. Each time it developed a new model or a new engine, we began at the same time to develop a new lubricant suitable for that model.'
Lubricant is a value-added service for a vehicle. If the lubricant performs well, if research and development keep pace with those of the vehicle, and if the lubricant producer and the automaker form a partnership, then sales of the lubricant as an end-consumer product are assured and the result is bound to be a win-win.
Most international automobile companies cooperate with well-known lubricant makers during vehicle development, having them develop lubricants suited to that engine and that model, as Afton and General Motors do. But in China this cooperation model exists only between Dongfeng Commercial Vehicle and Kunlun Lubricant. Fu Xisheng says: 'After our oil was successfully developed it naturally became the factory-fill oil and designated oil for that model. The parameters of our oil are set according to the parameters of that model, so complete matching is guaranteed.'
Mi Liping is director of the Industrial Oil Institute of the Lanzhou Lubricant R&D Center. Explaining why Dongfeng Commercial Vehicle is willing to cooperate with the Lanzhou Lubricant R&D Center rather than choosing universities or foreign brands, she recounts something Chang Kaixiao, former director of the Dongfeng Motor fuel research institute, said to her: 'Universities are strong on theory but do not have the supporting production capacity and cannot deliver a concrete product; some foreign brands do not understand China's specific national conditions and special road conditions, and their prices are too high as well. Kunlun Lubricant is a product that suits Dongfeng's market conditions and China's national conditions and offers high cost performance. It is our best choice.'
Precisely because of synchronized research and development, Kunlun Lubricant has continuously extended lubricant service life, upgrading from 30,000 kilometers to more than 100,000 kilometers, while Dongfeng Commercial Vehicle has continuously raised the level of its engines. He Dali, chief engineer of the technology department of Dongfeng Commercial Vehicle Co., Ltd., says: 'At present, models meeting the China IV emission standard went into volume production and reached the market on January 1, 2014, and models meeting the China V emission standard are undergoing road tests. The two sides have now launched projects for preliminary research on models and oils adapted to the China VI emission standard.'
Precisely because of synchronized research and development, cooperation between PetroChina Lubricant Company and Dongfeng Commercial Vehicle Co., Ltd. has continuously strengthened and a close strategic partnership has been established. Driven jointly by both sides, all after-sales service engine oil for Dongfeng Commercial Vehicle uses the CH-4 series, promoting the upgrading of oil for medium and heavy trucks as a whole. High-horsepower engine oils and gas engine oils have been promoted and applied.
2. Mutual Promotion
Wang Mingji says: 'PetroChina fuels and oils Dongfeng Commercial Vehicle with high-quality lubricants, and at the same time the rapid development of Dongfeng Commercial Vehicle has promoted the upgrading of lubricants and the sale of products. The cooperation between the two sides has realized complementary advantages and a powerful alliance.'
Before 1995, the transmission oil and the rear axle oil of an automobile were universal. This caused corrosive wear of the transmission gears and was not conducive to the normal operation of the transmission. In view of this situation, Dongfeng Commercial Vehicle proposed for the first time in China the concept of an oil dedicated to manual transmissions, hoping that a lubricant made specifically for manual transmissions would appear on the market.
The market raised the demand, and the Lanzhou Lubricant R&D Center took on this task for Dongfeng as its bounden duty. Fu Xisheng says: 'Whenever Dongfeng has a need, our R&D center always meets it first. We treat their needs as our own business.'
Developing a new type of lubricant product is very difficult, and developing an independent formulation is particularly so. Tang Zhongping, deputy director of the Lanzhou Lubricant R&D Center, says: 'It is like preparing Chinese herbal medicine: a prescription needs many single ingredients, and the slightest deviation in the dosage of any one of them produces a different effect.' The Lanzhou Lubricant R&D Center pooled the strength of the whole center to overcome this problem. Throughout the development process, the vehicle models of Dongfeng Motor and the formulations of the Lanzhou Lubricant R&D Center adapted to and finalized each other. In the end, in 1996, the first truck manual transmission fluid in China came into being.
The road of research and development is endless. In the second year after the first domestic truck manual transmission fluid appeared, because of the introduction of the international API standard, the Lanzhou Lubricant R&D Center began to develop MTF18 manual transmission fluid.
'It can be said that the development of the automobile industry has driven progress in China's lubricant research and development,' Fu Xisheng says. 'Conversely, the development of automotive lubricants has also promoted the upgrading of automobiles.'
Such examples are also fully reflected in the cooperation between Dongfeng Commercial Vehicle and Kunlun Lubricant.
Starting in 2000, in order to meet the implementation of the China III emission standard, the Lanzhou R&D Center began to develop CH-4 diesel engine oil and obtained Dongfeng certification in 2003. Tang Zhongping says: 'Our development of CH-4 diesel engine oil also met Dongfeng Motor's development of China III diesel engines.'
Development succeeded in 2003, yet it was ten years later before sales of Kunlun CH-4 diesel engine oil took off. Tang Zhongping therefore says: 'Scientific research must take the long view. We are all preparing for market demand ten years from now.'
The same is true of Dongfeng Commercial Vehicle. In order to have its own dedicated automotive oil for the models the market will demand in ten years, Dongfeng Commercial Vehicle opened its five-year and ten-year plans to Kunlun Lubricant without reservation. Asked why, the company's leaders said: 'In decades of technical cooperation, Kunlun has never let us down.'
This commendation became a weather vane for medium and heavy vehicle lubricants and, to a certain extent, was equivalent to obtaining a pass for Kunlun Lubricant in developing other automobile customers.
3. Treating Each Other with All One's Heart
On December 11, 2010 Lanzhou was freezing cold. Shi Hui had just returned from attending the '2010 Supplier Conference' that Dongfeng Commercial Vehicle held for the first time with both parts and materials suppliers taking part, and she told her colleagues beaming: 'Dongfeng has awarded us a car.'
'You are easily pleased. Is it worth being so happy about a model car?' her colleague asked, puzzled.
'It is not a model car. It is a Dongfeng Aeolus S30 sedan, a real car!'
That a customer would award the lubricant company a real car is a rare thing even today. Shi Hui is still very happy whenever she mentions it. 'It is not just a car. It shows that the products and service of the Lanzhou Lubricant Plant have won the high recognition and full trust of Dongfeng Commercial Vehicle, and it is the most valuable encouragement and spur to every employee of the Lanzhou Lubricant Plant.'
Not only did they receive a car; at this conference, attended by more than 400 people from more than 200 units across the country, the Lanzhou Lubricant Plant was also awarded the honorary title of Dongfeng Commercial Vehicle's 2009 'Best Supplier' on the strength of its good cooperative relationship of more than 20 years with Dongfeng Commercial Vehicle.
This was only the beginning.
In 2011, 2012, 2013 and 2014, the Lanzhou Lubricant Plant won the title of Dongfeng Commercial Vehicle's 'Best Supplier' for four consecutive years, and received four cars in succession.
Winning this title is not easy. According to Geng Xianzhou, head of the oil and chemical section of the procurement department of Dongfeng Commercial Vehicle Co., Ltd., the selection of Dongfeng's outstanding suppliers follows a strict process and standards, with five departments - quality, R&D, procurement, marketing and production - giving comprehensive scores respectively for quality, price, R&D, delivery and service. A score of 85 counts as outstanding. Geng Xianzhou says: 'We have 157 large raw material suppliers in all, and in recent years Kunlun's comprehensive score has been far ahead.'
Besides winning the titles of best supplier and outstanding supplier of Dongfeng Commercial Vehicle for four consecutive years, in 2015 the Lanzhou Lubricant Plant won the honorary title of 'Outstanding After-Sales Award' from Dongfeng Commercial Vehicle.
If titles such as 'best supplier' and 'outstanding after-sales award' seem somewhat abstract, then the fact that in decades of cooperation between Kunlun Lubricant and Dongfeng Commercial Vehicle the latter has never once lodged a complaint about product quality or service says it best: 'zero product defects' and 'zero quality complaints' are the best interpretation of Kunlun's products.
Speaking of zero complaints and zero defects, plant director Song Jiulin told this story.
In 1995, Dongfeng trucks in coal-hauling fleets in Shaanxi and in the Yunnan-Guizhou region developed problems such as gear tooth breakage and burned gear bearings. The Lanzhou Lubricant Plant and Dongfeng Motor jointly organized staff to investigate. They found that Dongfeng vehicles rated for a load of 8 tons were being used by their owners to haul at least 20 tons, and some even 30 or 40 tons, far exceeding the rated load by as much as five times, which precisely showed how good the performance of Dongfeng vehicles and of the GL-5 and CD oils they used at the time was.
Wang Mingji says: 'Recognition of Kunlun's quality comes from PetroChina's strong state-owned enterprise background, and also from the rigorous and conscientious working attitude of Kunlun people over decades of cooperation and from the quality of the oils.'
In order to maintain Kunlun Lubricant's best position in the eyes of Dongfeng Commercial Vehicle, the Lanzhou Lubricant Plant takes its work to the utmost in order communication, quality control, supply guarantee and delivery guarantee.
In terms of order management, Shi Hui communicates in good time each month with the Dongfeng supply chain management department and the sales department about the varieties and quantities of the following month's orders, so that resources are allocated promptly and the order execution rate reaches 100 percent. At the same time, she urges strict formulation management in production process control, with the laboratory giving full cooperation and whole-process analysis and monitoring; before dispatch the tanker leaving the plant undergoes a tanker analysis to ensure that the oil quality meets the indicators agreed by both sides.
In terms of supply, the Lanzhou Lubricant Plant dispatched promptly to Dongfeng Motor Co., Ltd. Dongfeng Motor Co., Ltd. in turn paid for the goods in good time.
Speaking of all this, Shi Hui has always been grateful. She says: 'Whether it is best supplier or outstanding after-sales award, winning these honours would have been impossible without Dongfeng Commercial Vehicle's understanding and help. Cooperation between the two sides has been so smooth, with mutual trust and mutual help, truly treating each other with all one's heart.'
4. Cultural Integration
Money, equipment and technology: before Dongfeng Motor was built, China had none of these visible, tangible material things. What we had then were invisible, intangible spiritual things, namely the firm belief of the people of the whole country in the industrial construction policy of 'independence and self-reliance' put forward by Chairman Mao.
Faith is the source of spiritual strength. Guided by this spirit, countless engineers and technicians responded to the call of the state, vying with one another to come from the big cities to the remote mountains of northwestern Hubei, casting their youth, their sweat and even their lives into the tide of the country's automobile construction without regret.
This spirit is in the same line as the PetroChina spirit of 'rather lose twenty years of life than fail to win the big oilfield'. 'Kunlun Lubricant comes from PetroChina.' The Kunlun brand, a newly born brand from an old enterprise, is precisely a new branch put out by an old tree: tender, yet full of vigorous vitality, growing tenaciously with long accumulation. It is precisely this innate cultural kinship that formed the basis for cooperation between Dongfeng and Kunlun. Wang Mingji says: 'In decades of cooperation, both sides, as large state-owned enterprises, have been loyal and devoted to the enterprise and conscientious and responsible in their work. At the same time, both sides share the mission of fulfilling social responsibility. This makes us sympathize with and appreciate each other.'
Decades of technical exchange and product service have brought about mutual cultural influence.
In the course of decades of cooperation, Dongfeng was deeply impressed by the steadiness and integrity of Kunlun people, while Kunlun people were deeply impressed by the rigour and professionalism of Dongfeng people. Song Jiulin says: 'Whether in the tendering process, the procurement process or the supply standards, Dongfeng has a set of strict rules. This required us to be equally strict, and we specially formulated product standards higher than the industry quality standard for our supply.'
Today Dongfeng Motor proposes to transform itself from 'China's Dongfeng' into 'the world's Dongfeng', committed to developing products of internationally leading standard and leading the upgrading of commercial vehicle products with leading technology and an ever pioneering and enterprising spirit. As Dongfeng's strategic partner, Kunlun Lubricant keeps thinking about how to create value for the customer Dongfeng and how to strengthen its ability to create value for customers.
Only by giving value does one have value. In the final analysis, when an enterprise is eliminated from the market it is certainly not eliminated by its competitors but abandoned by its own customers. Only when lubricant products and services bring customers real value is one's own value realized.
Difficulties exist to be challenged. As one of the most representative national brands in China's lubricant industry, Kunlun has the calm of one who sits securely on the fishing terrace and the boldness to reach up to the blue sky and grasp the bright moon; it will surely ride the wind and cleave the waves, steering the ship of enterprise development further.
Part Three: One Plus One Is More Than Two
Epigraph: [A long history of cooperation, advanced scientific research advantages, high-quality resource alignment and a positive desire for win-win cooperation are all positive factors in the cooperation between Kunlun Lubricant and Dongfeng. The sky is high for birds to fly; however the market changes, with its solid strategic partnership with Dongfeng and its strong research and development strength, Kunlun Lubricant's automotive oil market is bound to grow ever wider.]
Oreo biscuits are eaten with milk, Nescafe coffee is drunk with Carnation milk, and Gillette razors are sold together with Eveready batteries... The era of going it alone has passed. This era does not worship the lone hero but the finding of the most suitable dance partner in the value chain to dance with. Whether from the angle of expanding the functional space of a product or from that of making it easier for customers to operate and use, such dancing together greatly raises the added value of the product itself, produces the effect of one plus one being more than two, and ultimately achieves win-win or even multi-win cooperation.
In the automotive lubricant industry this model of cooperative dancing is especially important.
Lubricant is a typical product whose consumption is guided by brand. Unlike ordinary daily necessities, because the product itself sits upstream in the industry chain, its quality and performance are not easily perceived directly, and it is very hard for consumers to form a rational or even an emotional impression of automotive lubricant. This makes the marketing and promotion of automotive lubricant like a fist striking cotton, entirely without force.
There is almost no way forward without building a brand. Every famous oil company in the world chooses lubricant product brands first for market promotion. A brand is not merely the mark of a product but a symbol and a belief. How should a brand be built? The effective solution is to keep close to the technological development of automakers, maximize the benefits realized from automotive technology through one's own outstanding performance, and let automakers and consumers genuinely feel the value of the lubricant's existence.
On this point, PetroChina Lubricant Company (Kunlun Lubricant), which has always focused on discovering value in the industry chain, deserves praise. Its decades of cooperation with Dongfeng Commercial Vehicle have played an immeasurable role in raising both sides' technological research and development and market share, and can be called a classic of cross-industry cooperation.
The foundation of this cooperation is, of course, technology.
When PetroChina Lubricant Company was first established and its total revenue was only 2 billion yuan, Kunlun's investment in scientific research was as high as 120 million yuan. Among the company's R&D centers, the Lanzhou Lubricant R&D Center has been committed to independent research and development of lubricant product technology and the formulation of industry standards, and is outstanding among them. Since 2009 it has not only solved a series of major topics in lubricants and lubricant additives, fuel additives and analysis and evaluation, but has also brought dozens of developed products to the world advanced or leading level, filling many gaps in the domestic lubricant field.
It is precisely because of Kunlun Lubricant's strong research and development strength that it won the heart of Dongfeng Commercial Vehicle.
Today the era of high growth in the Chinese economy has passed, and the extensive model of development is destined to be eliminated. In the coming years China's lubricant industry may face important changes; this is a critical period that will determine the position of each lubricant brand in the industry, and also a great opportunity for the Kunlun Lubricant brand to seize the chance and leap toward the high end of the value chain. The sky is high for birds to fly; however the market changes, with its solid strategic partnership with Dongfeng and its strong research and development strength, Kunlun Lubricant's automotive oil market is bound to grow ever wider.