EVER THE WELL-LUBRICATED OYSTER

Iran 2017 | ENERGY | INTERVIEW

TBY talks to Asad Azizi, Member of the Board & Managing Director of Behran Oil Co., on how to manage huge market shares, focusing on higher-end finished products, and the upshot of industrial growth on the lubricants market.

Asad Azizi
BIOGRAPHY
Asad Azizi was born in 1961 in Baneh, Iran. He received his bachelor’s degree in electrical engineering from Khajeh Nasir University in Tehran, and during his studies worked as a researcher at the communication research center. After his studies, he worked as an Analysis Manager and later as Software Manager at Mostazafan Foundation. In 1996 he received his master’s degree in industrial engineering from Amirkabir University, and continued his job as Deputy of Planning & Economic Expansion until 2007. Then he became Managing Director of Sina Paya Sanat and, subsequently, he became Managing Director of Sina Energy Development Company (SEDCO) in 2011. In 2015 he assumed his current position as Managing Director of Behran Oil Co.

How do you assess your current market share in different divisions, and how do you plan to develop it?

We are the market leader in the lubricants industry, with a 50% market share for passenger cars, motor oil, and especially heavy-duty oils. In the industrial sector we occupy 33% of the total market. We are in a situation where we can define the price and manage the market. We have a strong portfolio that covers nearly all the needs of the market. Car manufacturers have also approved all our oils. Lately, we have reached certain limitations in the market, and for that reason we have placed our focus on several top-tier products, a future trend with which we need to keep up. We want to compete in terms of quality rather than price and capture the premium parts of the market. On top of this, we aim to launch brand campaigns for our top-tier products and reorganize our distribution channels based on that strategy. In the industrial oils division, we have offices in eight provinces in Iran and offer technical and consulting services through our sales engineers. We want to increase their knowledge of lubricants and additive monitoring, and, thus, become even more powerful in the market.

Your current base oils output is around 250,000 tons per year. Do you plan to further increase your capacity?

We want to focus on finished products rather than base oils. Base oils are an intermediary product for us, and we prefer to focus on marketed products. We want to be pioneers in the technology realm, which is why we want to find a qualified partner that has a license and advanced technology. Also, we are interested in a partner that can finance our projects and grant us market access.

What is the outline of your growth strategy?

We see some internal and external drivers for growth. Internally, we have brilliant human capital. Behran's credit also allows us to invest, which is another strength. Externally, industrial growth in Iran allows us to enhance the market. The share of the industrial sector here may not be that great in comparison to other sectors, but we expect to see a boom in the economy as sanctions are lifted, and this will positively affect the sector. Industrial growth, in turn, will provide a good base for our lubricants. The car producers in Iran are also sparking growth and innovation. The sector is moving from the low to the high end, another positive trend for us. There is also an increase in public work; the infrastructure and megaprojects that the Iranian government is carrying out are another good driving force for our business.

Behran Oil already exports to over 40 countries. Are you looking to enter new markets?

Our grand strategy is to have a direct presence in our target markets. In the past, we would just export commodity to overseas markets. Now, we aim to export our brand-oriented products and have a direct presence in target markets. Setting up blending and packaging facilities in our target markets and building a distribution system through a local partner is part of this strategy. Our target markets are East Africa, West Asia, neighboring countries, and CIS countries to the north.

What is your outlook for the year ahead?

Our human capital, know-how, and software form the soft part of our business. This part may be hidden, but it is our secret to success. It helps us stay in the market as a leader and further expand our position. For the lubricant business we need good relationships with additive suppliers and OEMs all over the world. With the lifting of sanctions, we are now able to strengthen our partnerships with additive producers and sign agreements with them.