BP 2006 Annual Report Download - page 34

operations with 151 sites in Ningbo in 2005, with a further 72 sites in
Shaoxing being transferred into the joint venture in 2006. The joint
venture plans to build, operate and manage a network of 500 sites in
Hangzhou, Ningbo and Shaoxing within Zhejiang province.
Lubricants
We manufacture and market lubricants products and also supply related
products and services to business customers and end-consumers in over
60 countries directly and to the rest of the world through local distributors.
Our business is concentrated on the higher-margin sectors of automotive
lubricants, especially in the consumer sector, and also has a strong
presence in business markets such as commercial vehicle fleets, aviation,
marine and specialized industrial segments. Customer focus, distinctive
brands and superior technology remain the cornerstones of our long-term
strategy. BP markets through its two major brands, Castrol and BP, and
several secondary brands, including Duckhams, Veedol and Aral.
In the consumer sector of the automotive segment, we supply
lubricants, other products and related business services to intermediate
customers such as retailers and workshops, who in turn serve end-
consumers (e.g. car, motorcycle and leisure craft owners) in the mature
markets of western Europe and North America and also in the fast-
growing markets of the developing world such as Russia, China,
India, the Middle East, South America and Africa. The Castrol brand is
recognized worldwide and we believe it provides us with a significant
competitive advantage.
In commercial vehicle and general industrial markets, we supply
lubricants and lubricant-related services to the transportation industry
and to automotive manufacturers.
Business-to-business marketing
Business Marketing markets a comprehensive range of refinery and
lubricants products focused on business customers in the aviation
fuel, marine fuel, marine and industrial lubricants, LPG and the ground
fuels sectors.
Air BP is one of the world’s largest aviation businesses, supplying
aviation fuel and lubricants to the airline, military and general aviation
sectors. It supplies customers in approximately 100 countries, has
annual marketing sales of around 26,854 million litres (approximately
463 thousand barrels per day) and has relationships with many of the
major commercial airlines. Air BP’s strategic aim is to strengthen its
position in existing markets (Europe/US/Asia Pacific), while creating
opportunities in emerging economies such as South America and China.
The LPG business sells bulk, bottled, automotive and wholesale
products to a wide range of customers in 14 countries. During the past
few years, our LPG business has consolidated its position in established
markets and pursued opportunities in new and emerging markets. BP is
one of the leading importers of LPG into the Chinese market, where we
continued to grow our retail LPG business. LPG Marketing Product sales
in 2006 were approximately 71 thousand barrels per day.
Marine comprises three global businesses: Marine Fuels, Marine
Lubricants, and Power Generation and Offshore, which supplies specialist
lubricants to the power generation and offshore industry. Under the BP
and Castrol brands, the business is the marine lubricants market leader
and has a strong presence in the marine fuels sector. The business has
offices in 90 countries and operates in more than 1,150 ports.
The Commercial Fuels business has activities in approximately 14
European countries and marketing sales of approximately 596 thousand
barrels per day. The business markets fuels and heating oil, mostly as
pick-up business at refineries, terminals and depots.
Our Business Marketing activities also include Industrial Lubricants,
selling industrial lubricants and services to manufacturing companies in
approximately 40 countries, and the supply of bitumen to the road and
roofing industries. The businesses seek to increase value by building from
the technology, marketing and sales capabilities of a business to business
operation.
BP supports its businesses through a dedicated Strategic Accounts
organization. Strategic Accounts develops strategic relationships with
carefully selected leading organizations in targeted markets, where mutual
strategic and financial value can be created. Its operating model manages
each relationship in a disciplined manner to achieve growth and efficiency
for BP and its partners through focused offer development and capability
building. Relationships are held across organizations and involve many
senior leaders in the partners’ organizations.
Aromatics and acetyls
The Aromatics and Acetyls business is managed along three main
products lines: PTA, PX and acetic acid. PTA is a raw material for the
manufacture of polyesters used in textiles, plastic bottles, fibres and
films. PX is feedstock for the production of PTA. Acetic acid is a versatile
intermediate chemical used in a variety of products such as paints,
adhesives and solvents. It is also used in the production of PTA. In
addition to these three main products, we are involved in a number
of other petrochemicals products, namely Dimethyl 2, 6 Naphthalene
dicarboxylate (NDC), which is used for optical film and specialized
packaging, and acetic anhydride, ethyl acetate and vinyl acetate
monomer (VAM), which are used in cellulose acetate, paints, adhesives
and solvents.
Our Aromatics and Acetyls strategy is to invest to maintain our
advantaged manufacturing positions globally, with an emphasis on Asia
growth, particularly in China. We are also investing in maintaining and
developing our technology leadership position to deliver both operating
and capital cost advantages.
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