May 30, 2017
Volume 7 Issue 8
United Oil Buys Indonesian Partner
Singapore’s United Oil, a subsidiary of United Global Ltd., will expand its reach in Indonesia with the purchase of 95 percent of lube manufacturer Pacific Lubritama Indonesia.
“The acquisition of Pacific Lubritama Indonesia would allow United Global to expand its current production capacity, increase its presence in Indonesia and establish stronger and closer relationships with customers, distributors and suppliers,” said the company in a May 14 statement to the Singapore Stock Exchange. “It would strengthen United Global’s export capabilities.”
PLI is an independent lubricant manufacturer located in Banten province, around 100 kilometers outside of Jakarta. PLI has an annual blending capacity of 80,000 metric tons and 14 base oil tanks with 17,000 tons of storage capacity, as well as six bulk additive tanks and jetty access.
The firms’ partnership dates back to 2003, when United Global began helping PLI plan, design, and construct its lubricant blending plant, tank farms and jetty. Since then, United Global has been selling base oils, additives and some finished lubricants to PLI, and purchasing lubricants from PLI. “Most of the lubricants the group purchases from PLI are lubricants which can be manufactured at a lower cost by PLI as compared to United Global,” the company explained in an April statement.
United will operate PLI as a 95-percent-owned subsidiary upon completion of the SGD $18.2 million (U.S. $12.6 million) purchase. United will purchase a combined 171,000 shares from Wiranto siblings Ety, Emi and Edy, who respectively own 30, 35 and 35 percent of PLI. Edy Wiranto will retain 9,000 shares to hold the remaining 5 percent of PLI. The Wirantos’ father cofounded United Global with Ety’s spouse, United Global’s CEO and Executive Director Jacky Tan. The sellers’ association with United's cofounders subjects the deal to the exchange’s “interested person transaction” rules.
United Global has been focusing on inorganic growth through joint ventures and acquisitions since its June 2016 listing on the Singapore Exchange’s Catalist board. The firm plans to expand into East Timor, Iraq, Kazakhstan and Mauritius, it said in April.
In January, United Global entered into a joint operation with Lighthouse Enterprise, a lubricant distributor in Myanmar. In December, it set up a joint venture with its Taiwan distributor, Jin Wei Chuang Co., to distribute United Oil’s in-house lube brands and third-party lubricants in Taiwan.
United Global manufactures lubricants through its wholly-owned subsidiary, United Oil Co., at the latter’s 44,000 tons per year blending plant. United Global also trades base oils, additives and lubricants in more than 30 countries. In 2015, more than 88 percent of its sales were made outside Singapore. The company’s brands include United Oil, U Star Lube, Bell1 and Hydropure.