Sinopec to complete restructuring of lubricant distribution business

Sinopec Group, parent of China Petroleum and Chemical Corp. (Sinopec Corp.), is going to complete the restructuring of its lubricant distribution channels in China, which was started in April, very soon. Sinopec said it will take back relevant clients and the distribution responsibilities of its lubricating oil business from its provincial branches and transfer these to Sinopec Lubricant Company. So far, five provincial branches of Sinopec have already transferred their lubricating oil business to Sinopec Lubricant, according to a report by China Business News (CBN). Sinopec Lubricant Company, which was founded in May 2002, has a one-third share of China’s domestic middle- and high-end lubricating oil market. However, before the restructuring, product distribution mainly relied on traditional product oil distributors. According to market reports, Sinopec Chairman Fu Chengyu has already approved plans for the spin-off and the public offering of Sinopec Lubricant Company. If true, centralizing lubricant distribution does make sense. Song Yunchang, the president of Sinopec Lubricant Company, said that restructuring its distribution channel is being made in response to market demands and paves the way for the company’s future plans.