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First 100 percent foreign-owned company to enter Vietnam's petrol retail market

By Toan Dao   April 18, 2016 | 06:12 pm GMT+7
First 100 percent foreign-owned company to enter Vietnam's petrol retail market
Nghi Son refinery. Photo: PVN

Japan's Idemitsu Kosan Co. Ltd and Kuwait Petroleum International Ltd have applied to form a 50:50 joint venture company to distribute petroleum products in Vietnam, the Japanese firm said Monday in a statement.

It will be the first wholly foreign-owned company in Vietnam’s oil product distribution and retail sector, which is viewed as "sensitive" for national energy security. Currently wholesale and retail activities are all implemented by domestic oil companies.

Idemitsu and KPI have recently obtained the investment registration certificate from Vietnam’s government, a prerequisite for the enterprise registration certificate that allows formation of a joint venture company. The new company will be called Idemitsu Q8 Petroleum Limited Liability Company.

"Through the establishment of a petroleum product distribution company, Idemitsu and KPI will achieve a stable supply of products to the growing Vietnamese market, where demand for petroleum products is expected to follow a steady upward trend," Idemitsu said.

Idemitsu and KPI intend to promote retail and wholesale operations, mainly through the construction and management of service stations across Vietnam, it added.

Idemitsu and KPI are two of the foreign investors in Vietnam’s second refinery at Nghi Son in Thanh Hoa central province, which is under construction and is scheduled for operation in 2017.