Idemitsu Lube advancing into Middle East and African markets

Idemitsu Kosan Co., Ltd. (Head Office: Chiyoda-ku, Tokyo; President: Akihiko Tembo) established its wholly owned subsidiary Idemitsu Lube Middle East & Africa FZE in Dubai, the United Arab Emirates, on June 7, 2009.

With respect to the lubricant business in the Middle East region, Sharjah National Lube Oil Company (Head Office: Sharjah, the United Arab Emirates; President: M.Jeanbart)("Sharlu") and Alhamrani United Co. (Head Office: Jeddah, Saudi Arabia; President: M.H.Basrawi) ("AUC") have been manufacturers and distributors of lubricants so far, and Idemitsu Kosan’s wholly owned subsidiary Idemitsu Lube Europe GmbH (Head Office: Düsseldorf, Germany; President: Koichi Sawa) ("Idemitsu Lube Europe") has carried out technical support for them, based on the license agreement on manufacturing and sales of lubricants made between Idemitsu Lube Europe and the two companies mentioned above.

Demand for lubricating oils in the Middle East region has sharply increased, particularly since 2002, and the Company’s yearly transaction volume in the Middle East markets doubled to about 16,000 Kℓ during the seven years from 2002 to 2008. In addition, lube demand in the markets is expected to grow in 2009 too, despite adverse effects from the financial crisis since 2008. Furthermore, demand for lubricants is expected to increase in Africa, and the Western Asian countries including Pakistan.

Under these conditions, Idemitsu Kosan has established its wholly owned subsidiary Idemitsu Lube Middle East & Africa FZE in the free zone within Dubai International Airport, accessible via air transportation, in order to enhance the sales structure of lubricants in the Middle East and its neighboring countries, including Africa. The newly established company will start its business in July 2009, and deploy its operations targeting annual sales of 20,000 Kℓ in 2012.

Idemitsu Kosan will maintain the license agreement with Sharlu and AUC, and both companies will continue to manufacture and sell lubricants for the time being. The manufacturing structure will not be changed. However, sales of lubricants will be shifted gradually to direct sales by Idemitsu Lube Middle East & Africa FZE to customers. In addition, Idemitsu Lube Middle East & Africa FZE will succeed the technical support carried out by Idemitsu Lube Europe in the past.

Idemitsu Kosan ranks South American countries and Russia as an important market having high potential for growth, in addition to Chinese and Indian markets where domestic demand is expanding, and strengthen the supply systems of high performance lubricants for automobiles and industrial lubes.

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For inquiries regarding this press release, please contact

Mr. Sato
PR Section IR&PR Office
Idemitsu Kosan, Co., Ltd.
Tel: +81-3-3213-3115