Shell Gò Dầu plant in Gò Dầu Industrial Park in Đồng Nai Province. — Photo courtesy of Shell Việt Nam
Việt Nam’s lubricants market has significant potential for long-term growth, according to leading global lubricants supplier Shell.
It is the fourth-largest market in Southeast Asia based on population size, with a young population and a high GDP growth rate, said Mansi Tripathy, Vice President of Shell Lubricants for the Asia-Pacific region and Chair of Shell Group of companies in India.
As one of the fastest-growing economies in Southeast Asia, ranking third in Asia-Pacific with a GDP increase projected at 6-6.5 per cent for 2024, Việt Nam has witnessed strong growth in the service, construction, agriculture, and forestry sectors, Tripathy said.
Along with opportunities from fast economic growth, potential for the finished lubricant business in Việt Nam lies in the two-wheeler market that accounts for 90 per cent of total transportation vehicles with 50 million units in 2023, thanks to the growth of ride-hailing and food delivery services.
Furthermore, the commercial transport sector holds potential, including heavy-duty motor oil (HDMO), gear oil, hydraulic fluid, and grease. This segment is the fastest growing among the three finished goods segments, she said.
Vietnamese Government requirements for all new cars to meet Euro 5 emission standards starting from January 2022 and the move to apply Euro 6 standards by the end of 2024 has spurred growth in the synthetic lubricant market. New vehicles equipped with the latest hardware require higher quality lubricant products.
According to worldwide consulting and research firm Kline, the total finished lubricants market in Việt Nam in 2023 is estimated to reach over 400 million liters and is expected to grow at a compound annual growth rate (CAGR) of 2.7 per cent from 2023 to 2028.
To boost growth and capture development opportunities in Việt Nam’s market, Shell will continue to provide premium, differentiated products, serving a diverse customer portfolio in industrial manufacturing, agriculture, construction, transportation, logistics services, and commerce among others, she said.
“Shell Việt Nam’s ambition is to sustainably grow our business in Việt Nam, maintaining our position as one of the leading suppliers in Việt Nam. We aim to continue developing our brand and distribution network to reach more customers while providing high-quality lubricants to Vietnamese businesses and consumers,” she said.
As the global population is forecast to continue growing, the world will need more food, houses, infrastructure, vehicles, energy, and raw materials. This increasing demand will drive the consumption of more lubricants and related services, she said.
Responsible for managing nine blending plants and more than 1,500 organisations as Vice President of Shell Lubricants for the Asia-Pacific, Tripathy acknowledges that the number of women leading in the energy sector is quite rare, partly because the proportion of women with appropriate educational backgrounds and leadership roles in STEM fields has been scarce.
However, she believes that the situation has seen significant changes over the past decade.
Shell has outlined a Diversity, Equity & Inclusion (DE&I) strategy with a roadmap and detailed instructions, focusing on building a professional and inclusive work environment, combined with the corporate development direction to become one of the most diverse and inclusive organisations in the world, where everyone - from employees, customers, partners, and distributors - feels valued, respected, and has a strong sense of belonging.
One of the prominent efforts in the DE&I strategy is organising support, counseling, and training programmes for women. The global forum Shell Global Allies for Gender Equity was established in 2021, creating a safe space for groups to raise their voices and act together to raise awareness about gender imbalance, while also providing development, mentoring, and networking opportunities.
By the end of 2022, 55 per cent of the members of our Board were women compared to 36 per cent in 2014, Tripathy said.
The rate of women in the senior leadership team reached 30.4 per cent, and across the corporation was 33 per cent. Shell is now aiming to achieve or exceed the level of 40 per cent women in senior leadership by 2030, she said. — VNS