Pertamina to acquire Thailand?s Amaco

Pertamina Lubricants, the downstream unit of state owned oil and gas company Pertamina, is currently in the final stage of acquiring Amaco, a mid-size lubricants company in Thailand, The Jakarta Globe reported on Tuesday.

?We will complete the process by the end of the year,? said Andria Nusa, Yogyakarta?s director of operations for Pertamina Lubricants on Monday.

Bangkok-based Amaco Production is one of the leading lubricants producers in Thailand under the ?AMCO? brand. It owns a blending plant with the capacity to produce 45,000 metric tons of lubricants products per annum.

?It would be the first for Pertamina Lubricants,? Andria said, adding that the company is pursuing inorganic growth.

?The acquisition will give us access to market opportunities in Thailand. We also plan to use Thailand as a base for expansion in Indochina.? Andria declined to disclose the value of the transaction.

Looking ahead, Andria said Pertamina Lubricants will continue to seek acquisition opportunities overseas, particularly in China.

?We have been looking and sizing up several mid-sized lubricant producers in China,? said Andria, explaining that acquisitions helped Pertamina Lubricants to quickly establish a local presence.

Domestically, Pertamina Lubricants intends to maintain its dominance. ?Our market share is 60 percent and we don?t want to fall below that level,? said Andria, adding that the company has benefited greatly from Indonesian consumer loyalty to domestic-made products.

?In Indonesia, if there?s a domestic-made product of similar price and quality to that of a foreign-made product, consumers will choose the former,? he said.

Pertamina Lubricants is targeting 10 percent growth in revenue, Andria said. ?Last year, our revenue was around Rp 10 trillion [$853 million]. This year, the forecast was Rp 11 trillion.?

Pertamina Lubricants intends to market and sell more premium products, which have a higher profitability. ?Indonesian consumers are getting more sophisticated,? Andria said. ?They want better, higher quality products.?

This acquisition marks the latest expansion in the downstream, or retail and distribution, business. (*)