Kline News

LITTLE FALLS, NJ, January 17, 2007 – While many of the world’s lubricant marketers focus on opportunities in India, Pakistan should not be overlooked as an alternate source of growth and a key player in the region’s future economic success, according to a recently published study by Kline & Company.

Data from the study, BUSINESS OPPORTUNITIES IN THE EMERGING LUBRICANT MARKETS OF SOUTH ASIA, THE MIDDLE EAST, AND NORTHERN AFRICA, 2005-2015, shows that Pakistan will exhibit the highest growth rates for lubricant consumption in the region over the next decade, albeit from a smaller base than the Indian market.

“Lubes marketers shouldn’t write off Pakistan just because it’s not on the scale of India,” says Geeta Agashe, director of Kline’s Petroleum and Energy Practice. “Pakistan is still a sizable market, has less competition and fewer barriers to entry than India, and has the best projected growth rates for lubricant consumption in the region.”

In South Asia, a region that includes India, Pakistan, Nepal, Bangladesh, and Sri Lanka, Pakistan accounts for less than 20% of total lubricant consumption and is a distant runner-up to India, which accounts for 75%. However, Kline predicts that lubricant consumption in Pakistan will advance by more than 5% annually over the next ten years, exceeding 550 kilotonnes a year by 2015.

Despite Pakistan’s past conflicts with India and the political instability in Afghanistan that has entangled Pakistan’s government, its economic growth potential, open markets, and less crowded playing field should warrant serious consideration from lubricant marketers looking for another growth arena. While Pakistan State Oil Company controls a significant market share, Shell, Caltex, and Total all have a significant presence.

These multinationals are servicing the needs of Pakistan’s growing population of foreign-made vehicles that require sophisticated, higher-quality oils. Kline’s study indicates that there is currently a large unorganized market segment for reclaimed, adulterated, and counterfeit oil, but as the country’s vehicular base moves further toward motorcycles, cars, and trucks that use higher-quality lubricants, a prime opportunity exists for grabbing significant new market share as the unorganized market is unable to serve those vehicles.

Overall, Pakistan’s consumption of lubricants is largely for products made from Group I basestocks, and this is expected to remain the case through 2015, making the country an all-around good target for marketers of base oils, additives, and finished lubricants.

“If you’re a supplier that is new to the region, Pakistan has lower barriers to entry than India or China in many respects and could be a better entry point. And if you’re a major lubes company that’s already doing business in the region, it’s important that you don’t let the bright light of India obscure the opportunities for growth in Pakistan,” says Bill Downey, vice president and head of Kline’s Petroleum & Energy consulting practice.

BUSINESS OPPORTUNITIES IN THE EMERGING LUBRICANT MARKETS OF SOUTH ASIA, THE MIDDLE EAST, AND NORTHERN AFRICA, 2005-2015 is a series of country and supplier profiles for these developing regions, including information on market segments, trends, developments, forecasts, supplier market shares, distribution channels, leading end-use segments, promotional techniques, and other topics. The report includes 10 country profiles and 8 profiles of leading multinational lubricant suppliers to these regions.

For more information on this study, go to www.klinegroup.com/reports/y608.asp or contact Geeta Agashe at +1-973-435-3484. In Europe, contact Erin Durham at +39-0331-976969.

To learn more about Kline’s customized consulting capabilities in the petroleum and energy fields, contact Bill Downey at +1-973-435-3388.

Established in 1959, Kline & Company (www.klinegroup.com) is an international management consulting and market research firm serving the petroleum and energy, specialty chemicals, life sciences, and consumer products industries.