Building a joint venture in an emerging market
A Burmah Castrol case study

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Page 5: Stakeholders

Burmah Castrol 4 Image 5Today, Castrol Vietnam works with 7,000 retailers and employs about 160 people in Ho Chi Minh City, Hanoi and Da Nang. The joint venture has worked hard to develop strong relationships with local retailers and distributors by providing detailed technical assistance and support. It has become standard practice to provide funds for upgrading petrol stations as well as arranging trade loans. Marketing campaigns have been particularly successful, with Castrol Vietnam offering gifts such as key rings and pens to encourage sales.

The joint venture has been particularly successful in changing customers’ perceptions about lubrication, whether the customer be a car or motorcycle owner or an industrial customer. Castrol Vietnam has played a major part in changing consumers’ buying habits, from low quality and regenerated lubricants, to oil blended to international standards.

After the lubricant blending plant had been operating successfully for several years, Vietnam’s first transformer oil processing plant was opened by Castrol in Ho Chi Minh City in March 1998. Constructed at a cost of US$1.5 million, the 3,000 tonne per year transformer oil plant utilises modern technology and equipment from the UK and will use raw materials imported from Singapore and other Asian nations for processing. The use of transformer oil produced by Castrol Vietnam will help save Vietnam money as its prices will be around 10% lower than imported oil. At full production, the plant will be able to meet around 80% of the local market’s demand and is part of an ongoing investment programme.

Burmah Castrol | Building a joint venture in an emerging market