October 18, 2016
Volume 7 Issue 4
FKT, MJL Record Half-year Gains
MJL Bangladesh Ltd. and Indonesia’s PT Federal Karyatama recorded significant gains in profit and revenue, respectively, in the first six months of this year, according to reports released last week.
MJL Bangladesh Ltd. recorded half-year profit of around 1 billion taka (U.S. $12.7 million), or a 54 percent increase over the same period last year, according to an earnings statement released last week.
The Dhaka-based company’s revenue for the six-month period ending June 30 was 4.7 billion taka, up marginally from around 4.5 billion taka recorded in 2015. MJL’s profit for the full year through June was up around 25 percent from the year before despite revenue dropping around 7 percent.
Listed on the Dhaka Stock Exchange, MJL Bangladesh Ltd. is the joint venture between state-owned Jamuna Oil Co. and EC Securities Ltd. It supplies ExxonMobil’s Mobil brand of lubricants and its own Omera Lubricants.
MJL's assistant company secretary, Rokilel Kabir, told a Lube Report Asia reporter that MJL’s profit increased as a result of a decline in raw materials costs and that its sales increased due to an uptick in automobile sales. The company also benefited from a decrease in bank interest rates which allowed it to pay off some of its loans.
Bangladesh instituted national change in fiscal year periods for listed companies this year, Kabir explained. Previously, MJL’s first quarter ran from January to March, and it now runs from July to September. Its fiscal year now runs from July 1 to June 30.
Indonesian lubricant producer PT Federal Karyatama posted a 12 percent increase in sales revenue for the first six months of 2016, compared to the same period of 2015. The company also reported that its sales volume rose 14 percent in the first half despite a contraction in the domestic market.
In a financial report filed last week, Federal Karyatama said it has strengthened its supply chain and brand position ahead of the start of its new plant commencement slated for the first quarter of next year.
For the first six months of 2016, Federal Karyatama, which manufactures lubricants under Federal Oil and Federal Mobil brands, reported sales volume of 32 million liters. The company’s revenue grew 12 percent compared to the same period last year, to 845 billion rupiah (U.S. $64.8 million). “FKT saw an exceptional growth,” said the statement.
Beginning in 2015, FKT’s focus has been on building market share in what it said is a “slower market” by strengthening Federal Lubricants’ brand presence and recognition through social media and competitive racing sponsorships.
FKT continued its sponsorship of the European MotoGP2 racing team, Gresini, for a fourth year in 2016. “[It] remains very popular with customers, invoking a sense of pride as interest in motor sports is rising. Competitions to win trips to International MotoGP2 races and to meet the FKT Gresini MotoGP2 team have proved very popular and a solid means to build business,” said the report.
“Our efforts to raise the profile of the Federal Oil brand have been fruitful, with a number of awards and media coverage,” said the report. According to the company, despite an 18 percent slump in motorcycle sales in Indonesia and a slowdown in the lubricant market in the first half of 2015, FKT was able to increase revenue by 2.4 percent to 1,631 billion rupiah compared to the previous financial year.
To support its new blending plant, “FKT added warehouse and supply chain capacity, alongside brand promotions and advertising.” The company strengthened its entire supply chain through improvements in infrastructure, enhancements in its warehouse management system and the introduction of a distributor management system to improve logistics and responsiveness to market changes. To support markets in East Indonesia, it set up a new warehouse and branch office in Surabaya.
“The switch to new production premises in Cilegon, western Java, offers FKT a considerable boost for the future, placing the company closer to key supply sources and the attractions of excellent toll, rail and port facilities that will improve logistics, cutting time and cost to serve our markets,” said the report.
By 2017, FKT will consolidate and relocate its two blending plants in East Jakarta to the new plant located on a site of about two hectares of land with blending, bottling and warehousing systems to produce 100 million liters of lubricants.
FKT is a member of the PT Mitra Pinasthika Mustika Tbk group, a consumer automotive company marketing Honda motorcycles in East Java and East Nusa Tenggara and four-wheel motor vehicles for Nissan and Datsun throughout Indonesia. The group also operates car rental services and financial business for the automotive retail market.