TOTAL announced on October 1 that it has signed a deal to buy 100% of the shares in ExxonMobil Vietnam Holding Co. Ltd. for its lubricants and specialties business in Vietnam. The purchase includes a lubricant blending plant in the southern Vietnamese province of Dong Nai and Exxon’s base oil distribution network throughout the country. (source OEM/Lube News)
According to Kline & Company estimates, ExxonMobil has roughly 9- 10% market share of the Vietnamese lubes market which was estimated at 225 KT in 2008. ExxonMobil is constantly working towards optimizing its product portfolio and service offerings. Similarly, they are always looking at their return on investment in each of the country markets that they are active in. If a country does not give it the kind of returns it expects, ExxonMobil has chosen to get out of those markets. Recent examples are Brazil and Portugal. TOTAL on the other hand is looking to grow – they are primarily focused on Western Europe as well as the French speaking nations of Africa.
Vietnam was a French colony until 1954. There are a lot of cultural and language similarities that makes Vietnam an attractive growth market for TOTAL. TOTAL did not have a significant presence in Vietnam prior to this acquisition but this move would help them immensely in growing their market share.
Total has explored and produced oil and gas as well as distributed liquefied petroleum gas and lubricants in the Southeast Asian country since 1980. Currently it has seven subsidiaries, with more than 400 employees in Vietnam.
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