Ultrapar Participações S.A. last Thursday announced that its subsidiary Ipiranga Produtos de Petróleo S.A. entered into a joint venture agreement with Chevron Brasil Lubrificantes Ltda. to create a new JV company in the lubricants business. Under this agreement, the JV will be formed by Ipiranga's and Chevron's lubricants operations in Brazil. Ipiranga and Chevron will own 56% and 44%, respectively, of the JV's capital.
The JV will combine two highly complementary and experienced companies in this business, aiming at value creation by sharing best practices and strengthening its position in the competitive Brazilian lubricants market. The combination of the two businesses increases the capillarity of the sales channels in Brazil through Ipiranga's network of 7,241 service stations, 1,473 of which with Jet Oil (Ipiranga's specialized car care services), as well as through Ipiranga's and Chevron's lubricant distributors network. The JV will market lubricants, greases, additives (according to Oronite, this does not include Oronite additives) and coolants under Ipiranga and Chevron brands.
In 2015, Rio de Janeiro, Brazil-headquartered Ipiranga sold 206,000 cubic meters (177 KT) of lubricants, greases and fluids and recorded revenues of R$ 1.1 (US$0.343) billion. In the same period, Chevron sold 145,000 cubic meters of lubricants, greases and coolants in Brazil and recorded estimated revenues of R$ 0.9 billion.
George Morvey, Industry Manager Energy, Kline's Energy Practice, told OEM/Lube News "The 2015 total automotive and industrial oil and fluids demand in Brazil is estimated at 1,290.0 KT with Automotive 64% and Industrial 36%. Petrobras, Ipiranga, and Cosan-Mobil combined account for an estimated 51% of supply".
Ipiranga blends and markets a complete line of automotive, industrial and marine lubricants under its own Ipiranga brand name.
This transaction is subject to approval of the competent regulatory authorities, notably the Brazilian antitrust regulation agency CADE ("Conselho Administrativo de Defesa Econômica").
