PETROLIAM Nasional Bhd (Petronas) and Proton Holdings Bhd have taken their two-decade lubricant business ties beyond the buyer-seller arrangement.
The two national companies yesterday sealed an exclusive 10-year deal that leads to a more integrated supply, technical and commercial collaboration.
For two decades, oil firm Petronas only supplied lubricants to car maker Proton's manufacturing facility and various dealership network. Proton previously also used lubricants from a foreign oil major via a third party.
Under the pact, Petronas - through Petronas Lubricants International Sdn Bhd (PLI) - will be the exclusive partner for all Proton's domestic and global lubricants and functional fluids needs.
In return, PLI will get a more direct route-to-market for its lubricants through Proton's extensive sales and service network.
Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said it now uses and sells some 1.4 million litres of lubricants per year. The ties may help boost the volume to 2 million litres per year over the next few years.
Petronas vice-president (oil business) Arif Mahmoof, who is also PLI chairman, said the local market for lubricants is estimated at 260 million litres per year.
Petronas has a 21 per cent share of the market, he added. Globally, it controls two per cent of the market.
PLI is ranked among the top 15 lubricant companies globally. It owns and manages over 30 brands and categories of lubricants and fluids including Syntium, Sprinta, Selenia, Urania, Paraflu and Tutela.
Syed Zainal said: "This collaboration will be very key as we expand overseas. Proton and Petronas can leverage on each other's strengths.
"While we provide test beds and route to market, we can look forward towards reliable supply, technically sound products as well as continuous development for the benefit of our customers.