AP Oil holds $33 mil in cash, here’s what they plan to do with it

SINGAPORE (Nov 4): Oil and petrochemical manufacturer, AP Oil International, has been a supplier of lubricants to power companies like Chongqing Zongshen Power Machinery Company for years. It is a business that even its CEO Ho Chee Hon admits has little in growth prospects.

“Global consumption of lubricants grows only 1% to 2% a year, with China growing the fastest at 6%. There is no hope that we can [be lifted by] a rising tide,”says Ho. “We have grown organically for the past 10 years, and now we are at a stage where we can take risks and not die.”

That risk-taking comes in the form of a joint venture agreement with its long-time customer Zongshen, as well as MoneyMax Financial Services and Free Trade Port Co. Under the JV agreement, AP Oil will invest RMB 25 million ($5 million) for a 12.5% stake in a company that will provide financial leasing services through hire purchase contracts with companies in Chongqing, China.

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