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June 21, 2016

Volume 7 Issue 3

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Singapore’s United Global Applies for IPO

Singaporean lubricant manufacturer and trader United Global filed a preliminary offer document for an initial public offering on Catalist, a secondary board of the Singapore Exchange, to raise funds for overseas expansion.

United Global manufactures lubricants through its wholly-owned subsidiary, United Oil Co., at its 44,000 metric tons per year blending plant in Tuas, western Singapore. The company makes passenger car motor oils, specialty fluids for automotive, industrial and marine applications, and more under its own brands, including United Oil. It also toll-blends for other marketers. “We are a specialist in automatic transmission fluids, with a wide range of [high- or low-viscosity] products catering to specific transmission needs,” United Global noted in the document.

Photo: United Global

United Global plans to use funds from its stock offering to upgrade its lubricant blending plant in Singapore.

United Global also trades base oils, additives and lubricants across a distribution network that includes more than 30 countries. In 2015, more than 88 percent of its sales were made outside Singapore.

“The IPO proceeding will be for the expansion of business through investments, acquisitions and strategic alliances and general working capital, including expanding into new and existing geographical markets,” Jacky Tan, executive director and CEO of United Global, told Lube Report Asia. “We are exploring possible collaboration opportunities in Myanmar and Bangladesh,” the company said.

United Global plans to enter new markets and expand its presence in existing ones through distributorship agreements, in which the company’s local partners will purchase base oils from United Global and toll-blend the company’s lubricants. “This allows us to increase our sale of base oils, while at the same time increases our market share and brand awareness in these countries in a cost-efficient manner,” the company said.

United will also use its internal resources or government funding to redesign its blending plant to reduce operating and labor costs. “Upon completion, [United Global] expects to achieve an increase in the number of batches that we can blend per day by approximately 40 percent,” Tan said. The redesign, which is expected to cost approximately SG$400,000 Singapore dollars (U.S. $298,000), will start in the third quarter this year and end in the first quarter of 2017.

The company’s profit almost doubled in its fiscal year 2015, to U.S. $6.2 million. The company’s brands are also toll-blended by several of its partners, including Malaysia’s Petronas Lubricants International. United Global also markets brands such as China National Offshore Oil Corp.’s HydroPure.

The IPO is pending Singapore Exchange approval. The company did not disclose how much funds it expects to raise.