In the afternoon of December 16th, informed sources revealed that Royal Dutch Shell Group will sell the entire equity of China Uniform Lubricant China Co., Ltd., a joint venture in China, and is seeking buyers to take over. The estimated bid price is 350 million US dollars to 500 million US dollars. Shell’s purchase price for this is 1.5 billion yuan.
Currently, Shell holds a 75% stake in Uniform Lubricants. After eight years of experience, after the high-level exchange of blood and the loss of sales channels, the operating performance of the unified lubricants did not meet expectations. In the context of a sharp drop in oil prices, Shell is in the process of selling its assets across the globe.
Previously, a person in charge of a petrochemical exploration company in China had revealed that the company was responsible for the drilling business of Shell in the Sichuan shale gas project. However, the project has not progressed since last year and the relevant investment has not been put in place. "It may be to quit," the source said. Analysts say that oil prices have put pressure on Shell's performance, and Shell's management is trying to raise the return on investment by raising funds and divesting assets.
Uniform lubricants were created in 1994. In 2002, its sales exceeded 600 million yuan, and it was the first time among private lubricant manufacturers. In the past 20 years, Huo Zhenxiang, a vegetable farmer, has worked hard from a small specialty store specializing in lubricants to a nationally renowned company. At the peak of the company, Uni-President had 2,000 dealers and 90,000 retailers nationwide, which once accounted for 10% of the national lubricant market. However, the monopoly of domestic petroleum smelting limits the rapid growth of unified lubricants. Therefore, the management of the company headed by founder Huo Zhenxiang hopes to achieve a curve expansion through foreign-funded enterprises.
In September 2006, Shell purchased all the shares of “Xiangjia International Investment Holding Co., Ltd.†with “Shell China Holdings Pte. Ltd.â€, which owns “Beijing Uniform Petrochemical Co., Ltd.†and “Unified Petrochemical (Xianyang) Co., Ltd.†75% of the shares. Shell entered Beijing Uniform Petrochemical Co., Ltd. and established a joint venture, Shell Uniform (Beijing) Petrochemical Co., Ltd.
However, Shell's unified performance is much lower than expected and may be the main reason for Shell's sale of the asset. Due to the differences in cultural background and management style, this joint venture was not pleasant, and the unified management was largely resigned. The leadership team of Shell Airborne was unable to perform because of different management methods. When Shell was established in 2006, the annual sales volume of unified lubricants was about 300,000 tons, about 30% higher than the sales of Shell lubricants in China. After eight years, the sales volume of unified lubricants remained at 300,000. About ton, about 65% of Shell Lubricant sales in China.
The Royal Dutch Shell Group is currently one of the world's largest oil companies, headquartered in The Hague, The Netherlands and London, England, and is a combination of Royal Dutch Petroleum and British Shell. It is the world's leading producer of oil, gas and petrochemicals and the world's largest retailer of automotive fuels and lubricants.
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