Launching Operations
in Czech Republic

GS Caltex sets up subsidiary in East European country
to expand multiple resin production

GS Caltex has taken action to diversify its oil business by setting up a multiple resin production company in Karvina, Czech Republic, for the first time for a Korean oil refiner, the company said recently.
The oil refiner said on July 12 that it has secured a four-hectare site inside the Karvina Industrial Complex and set up GS Caltex Czech, s.r.o.
The oil company, which is the first Korean refiner to advance into Europe, plans to produce multiple resin valued at 100 billion won beginning in 2014 when the projected plant goes online. The company will start construction of the plant by the end of this year with a completion target of 2012.
The multiple resin product goes into automobiles and home electric and electronic appliances as a kind of functional plastic. Europe is one of the largest markets for the product with demand rising to 1.2 million tons annually.
GS Caltex has been widely recognized for its abundance of technology from extensive experience in running an oil refinery and making petrochemical products. Its operation in China began in 2006 and in 2010 the oil refinery set up a multiple resin production company in Suzhou, China.
An official of GS Caltex said setting up a multiple resin production company in the Czech Republic means that the oil company plans to globalize its multiple resin production from China to Europe as its new growth engine and become a major producer of multiple resin.
GS Caltex signed an MOU with Dongfeng Lubricant Co., an affiliate of one of the three largest carmakers in China, Dongfeng Motor Co., to expand its lubricant sales in China.
Managing Director Kim Ung-shik, in charge of GS Caltex's lubricant business headquarters, signed the MOU for a co-branding tie-up in lubricant production and marketing at the Chinese lubricant company's Shichang lubricant plant in Henan Province in the presence of Chairman Liang Bing of Dongfeng Lubricant Co. The Korean oil refiner will now be able to expand the sale of its lubricants in China since it can now produce them under an OEM arrangement at Dongfeng's plants and supply them to Chinese carmakers.
The two lubricant makers will combine their major advantages in lubricant production and marketing ― GS Caltex's technologies and the marketing network and operational know-how of the Chinese partner ― to jointly attack the lucrative Chinese lubricant market.
Dongfeng Lubricant, set up in 1998, sold $120 million worth of lube oil last year. The company was spun off from Dongfeng Auto in 2003.
Managing Director Kim said China's lubricant market is worth about 12 trillion won, second globally to that of the United States, with lubricants for cars taking up 64 percent of the total, industrial lubricants accounting for 34 percent and other uses making up the remaining 2 percent. Demand has been growing at about 6 percent annually in recent years.
He went on to say that the MOU with Dongfeng is proof that GS Caltex has earned global recognition for the superior quality of its lubricants and lube oil production technologies and know-how. Before its entry into China in the lubricant market, the company set up a wholly-owned subsidiary in India last year.
The company has been exploring the Chinese lubricant market in partnership with such Korean traders as Samsung C&T and Hankook Tire and plans to increase its export of its lube oils to 50 percent of production from the current 20 percent.
The lube oil business for GS Caltex began with the operational launch of GS Caltex in 1969 and its sales revenue for lubricants came to 430 billion won last year, including 170 billion won in exports, which breaks down to selling 4,800 barrels of lube oil per day.
GS Caltex has a vision to create a better world, providing your energy needs. The energy market is poised for significant change due to diverse and complex variables such as changing demand, increased fluctuation in price, climate change and globalization. In addition to satisfying diverse customer needs through tailored services, a company that provides energy has to adopt a broad and long-term perspective while taking into consideration the future of the global environment and society, to deliver the optimal combination of energy and fulfill its mission, the company says in its Vision. nw

Chairman & CEO Hur Dong-soo of GS Caltex Corp.

Kim Ung-shik, right, managing director of the lubricant business dep't of GS Caltex, holds the copy of an MOU signed on May 15 this year with an official of Dongfeng Lubricant Co. at the company's Shichang lubricant plant in Henan Province in China for co-branding tie-up.

Photo on Courtesy of GS Caltex Corp