Home »Fuel and Energy » World » CAO eyes global expansion; to tap India, Middle East

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  • Dec 31st, 2012
  • Comments Off on CAO eyes global expansion; to tap India, Middle East
China Aviation Oil (CAO), Asia's top jet fuel buyer, is planning to tap newer growth markets like India and the Middle East as part of its plan to expand globally, its chief executive said. CAO's immediate plans are to focus on setting up its first European trading office in 2013 to meet growing demand from budget airlines, while it might target the Gulf and Indian markets for next year, the CEO said.

It will also study the Australian market to identify growth opportunities as the country's imports of oil products increase with the closure of ageing refineries, CAO Chief Executive Meng Fanqiu said.

"While we think China will still be the main locomotive (for jet fuel demand), other newer economies in the Asia Pacific will also fuel demand for jet fuel," he said in an interview at his office in Singapore.

CAO imports most of China's jet fuel needs and its top customers include the nation's three biggest international airports.

According to CAO's projections, jet fuel consumption by China will likely grow by 9-10 percent next year, steady near 2012 levels but lagging the average yearly projected growth of 11 percent from 2011-2015.

"These two years it failed to achieve the growth rate, about one percent difference, but 10 percent is still high," Meng said. "If the macro economy sees some improvement next year, then it might stand a chance to hit 11 percent growth rate. In 2014, the macro economy will likely be better."

CAO also supplies jet fuel to airlines in Hong Kong and North America, where it made acquisitions this year. The company has now set its eyes on other regions.

CAO hired a marketing agent in India this year to look at growth opportunities there. It currently supplies jet fuel to Indian airlines in China through its subsidiary China Aviation Oil (Hong Kong).

The company has also started supplying at least one cargo of jet fuel to Middle East through an existing representative office of its parent company, China National Aviation Fuel Group Corporation, Meng said.

Copyright Reuters, 2012


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