BUSINESS CASES – RSM

LUONG DUY VU
 Market Situation 1 – Heavy Duty | Commercial
ESTIMATED DEMAND FOR FINISHED LUBRICANTS IN ESTIMATED DEMAND FOR HDMO IN VIETNAM BY
VIETNAM BY MARKET SEGMENT, 2019 FORMULATION TYPE, 2019
MARKET SEGMENT KILOTONNES % OF TOTAL
FORMULATION KILOTONNES % OF TOTAL
Commercial automotive 130.1 37 TYPE
lubricants
Consumer automotive 112.6 32 Conventional 105.4 94
lubricants Synthetic 4.5 4
Industrial Oils and Fluids 110.3 31
Semi-synthetic 2.2 2
TOTAL 353.0 100
TOTAL 112.1 100

ESTIMATED DEMAND FOR FINISHED LUBRICANTS IN ESTIMATED DEMAND FOR TRANSPORT LUBRICANTS
VIETNAM BY MARKET SEGMENT, 2019 IN VIETNAM, BY PRODUCT SEGMENT, 2019
PRODUCT KILOTONNES % OF TOTAL
MARKET SEGMENT KILOTONNES % OF TOTAL SEGMENT
Transport lubricants 242.7 69 HDMO 112.1 46.2

Industrial Oils and Fluids 110.3 31 PCMO 18 7.4

MCO 112.6 46.4
TOTAL 353.0 100
TOTAL 242.7 100
Market Situation 1 – Heavy Duty | Commercial
ESTIMATED DEMAND FOR HDMO IN VIETNAM ESTIMATED SALES OF COMMERCIAL AUTOMOTIVE
BY API SERVICE CATEGORY, 2019 LUBRICANTS IN VIETNAM BY LEADING SUPPLIERS, 2019
API SERVICE KILOTONNES % OF TOTAL SUPPLIERS KILOTONNES % OF TOTAL
CATEGORY BP 40.3 31
CF-2 (obsolete) 26.9 24
Petrolimex 18.3 14
CH-4 23.5 21
Shell 14.3 11
CI-4 15.1 13
Chevron (Caltex) 11.7 9
CI-4 PLUS 15.1 13
Total 10.4 8
CF-4 (obsolete) 14.6 13
CG-4 (obsolete) 14.6 13 Idemitsu Kosan 9.1 7
CJ-4 2.3 2 Mekong Lube 2.6 2
Total 112.1 100 APSP 2.6 2
Nikko (Phúc Thành) 1.3 1
All other-a 19.5 15
TOTAL 130.1 100
a- Includes FUCHS Petrolub SE, Motul (Vilube), PTT,
Valvoline, PV Oil, and ENEOS among others.
 Market Situation 1 – Heavy Duty | Commercial
PCMO development plan

Estimated PCMO demand: 18 KT (Commercial automotive demand – HDMO demand)

PCMO demand account for minor share of total automotive lubricants of Vietnam, reflecting the limited
size of country’s passenger car fleet.

PCMO demand continues to increase rapidly as income level increasing and the cost of vehicle acquisition
and ownership declines due to taxes reduction and registration fee.

PCMO are sold mainly through franchised workshop and car dealership, so securing distribution contracts
with car garages, services centers and dealerships, which sell premium car brands

MOTUL should drive to focus on developing PCMO premium products (semi-synthetic/synthetic lubricants)
 Market Situation 1 – Heavy Duty | Commercial

HDMO development plan

Opportunities:

 Recognition of premium brand in automotive lubricants

 MCO and PCMO are on right target development strategies.

 Conventional type is dominating Vietnam’s market, but semi-synthetic and synthetic engine oils are
increasing rapidly due to product knowledge and higher awareness from consumers

Barriers:

 Pricing gap (local brands and international brands)

 Positioning products

 OEM approvals in HDMO

 Market Situation 1 – Heavy Duty | Commercial

HDMO development plan

Action plan:

 Build strong capabilities distributor network (financial, knowledges, salesforce)

 Lead distributors to seek target customers: medium enterprises with good credit payment term

 Training technical knowledges for salesforces of distributor network

 Build incentive scheme to encourage/support distributors to gain new customers.

 Support directly delivery to key accounts of distributors.

 Support from Technical and Marketing teams to develop HDMO sales toolkit (brochure, leaflet...)

 Cultivating relationship with Key accounts by frequency visiting and providing technical service.
 Market Situation 1 – Heavy Duty | Commercial

HDMO development plan

Proposal RTM:

 Motul VN – Distributors – Dealers – End users

 Estimated margin from Distributors to Dealers: 3% - 5%

 Estimated margin from Dealers to End users: 15% - 25%

 Motul VN – Distributors – End users

 Estimated margin for Distributors: 20% - 30%

 Control sell-out data of Distributors/Dealers by monthly report and strong support for sales
activities
Market Situation 2 – Industry
ESTIMATED SALES OF INDUSTRIAL OILS AND FLUIDS
IN VIETNAM BY LEADING SUPPLIERS, 2019
SUPPLIERS KILOTONNES % OF TOTAL
BP 17.6 16
Shell 15.4 14
Total 11.2 10
Nynas 8.8 8
Petrolimex 7.7 7
Chevron (Caltex) 7.7 7
Idemitsu Kosan 4.4 4
Mekong Lube 4.4 4
APSP 3.3 3
Motul (Vilube) 2.2 2
All other-a 27.6 25
Total 110.3 100
a-Includes ENEOS, PV Oil, Nikko, Nam Viet Oil, and
MIPEC among others.
Market Situation 2 – Industry
 Market Situation 2 – Industry
Focus industries

1. Metalworking Fluids

i. Ratio demand is around 8%-9%

ii. Less barriers to supply due to loss consumption situation, so customers are willing to take trial
test
iii. Automotive industry (Car manufacturing, supporting industries) of Vietnam are strong growth
so demand of MWF/Machine tool lubricants will increase rapidly.

2. Paper 1

i. Packaging paper consumption in Vietnam is estimated increasing at 12% (2021-2025) due to

online business (need for packaging) so this will push pulp industry to develop.
ii. Tissue consumption is increasing due to strong growth of urbanization

1- https://viracresearch.com/dien-bien-nganh-giay-va-bot-giay-o-viet-nam-con-kha-han-che-trong-nam-2022/
Market Situation 2 – Industry

3. Wood (MDF/Wood Pellets)

i. Wood Pellets consumption are increasing huge due to Russia – Ukraine conflict, leading to
shortage of fuel, gas …

ii. Vietnam is No.2 country of exporting wood pellets in the world (USA is No.1) 1

iii. Lubricants are available to develop (greases, gear box lubricants)

iv. HTF (Heat Transfer Fluid) can be competitive product to approach MDF prosects to drive
volume

1 - https://vneconomy.vn/vien-nen-go-se-tro-thanh-nganh-hang-ty-usd-kien-nghi-khong-ap-thue-xuat-khau.htm
 Market Situation 2 – Industry
Route to Market:

 Motul VN – Distributors - End users

 Focus on developing dedicated distributors for Industrial lubricants business

 Strong support from Motul VN for Industrial lubricants distributors (technical, developing
budget, pricing …)

 Apply B2B models for Industrial lubricants business, measured by

o Volume
o GMVC

 Technical Service plays important role in Industrial Lubricants

o Success stories from reference cases for prospects

o TCO (Total Cost Ownership) report for customers
o Providing lubricants test result for current customers/new prospects
 Market Situation 2 – Industry
Roles of Lubricants Sales vs Distributors

 Work independently & jointly with the Distributor team develop sales.
 Identify new Customer Projects in Industrial segments & Coordinate with Distributor to submit
proposals.
 Work closely with Technical Service Dept. to provide necessary service, advice, training … for
Distributors/Customers
 Responsible for developing Key accounts and maintain good contacts & relationship with strategic
accounts of the Distributors.
 Manages sales pipelines, constantly monitoring Distributor sales to avoid loss in customers/Volumes
 Closely liaise with Distributors for proper sales forecasting and follow up on orders to follow the
Sales Plan.
 Have good Market Intelligence to follow Competitor actions – Promotions, Strategies
 Coordinate with Distributors & Technical team to organize Seminars, events for Industrial Customers
Management Capability
I. Suggested KPIs

1. Result criteria (Quarterly payment) This suggested KPIs scheme will encourage
and motivate Sales Supervisor to deliver good
i. Volume weighted 40% result, as below explanation:
ii. GMVC weighted 40%
iii. Premium products volume weighted 20%  Not focus 100% volume, GMVC is
iv. Linear progression 3 above factors accounted equal ratio, final GMVC is
v. Threshold at 80% important
vi. A booster at 100%
vii. Caped at 01 month max when reaching 110% and above  Premium volume ratio will ask Sales
Supervisor to develop premium
2. Effort criteria products with high UGMVC

i. Business development (Number of new accounts)  Effort criteria will support Sales
ii. Inventory monitoring of relevant distributors Supervisor to achieve minimum
incentive, this will encourage Sales
team.
Management Capability

II. How to support Sales Sup to manage distributors/win customers when the market turns
competitive/tough

1. OJT, accompany with Sales Sup/Distributors to field trip new prospects.

2. Provide new approaching ways to win customers through indicators of sales pipelines

3. Well-known market situation to propose suitable countermeasures with BOD

4. Encourage Sales Sup to track wins with Distributors, recognize initiatives …

5. Celebrate small wins to motivate Sales Sup/Distributors

Management Capability
III. Do you have any experience with conflict management between sales staffs/among distributors when
their interest/profits are impacted when working together/working in the same customer pools? How
to solve/the consequences of the solutions

1. Firstly, Conflict management procedures should be noticed to all sales staff/distributors

2. When conflict happens, benefit of company should be prioritized

3. Best solution is solution which provide best satisfy for customer

4. Emphasize collaboration before competition between sales staffs/among distributors

Management Capability
Real experience cases: VIKOHASAN case, conflict between North distributor and South distributor

 North distributor supplied for Head Quarter in Ha Nam province.

 South distributor supplied for Branch in Long An province.
 When branch in Long An calls for big bidding, Head Quarter is PIC to choose supplier.

Proposed Solutions:

 Request distributors to quote same quotation to customer

 Having internal meeting with sales staffs to call for securing company’s benefit

 Customer have final decision to choose supplier

 Propose flexible revision target for South sales staff/South distributor in case that customer choose
North distributor.

 Secure small orders from customer for South distributor