MAZ Business Strategies

MAZ Business Strategies

MTL has divided the global liquid market into three separate segments, each with a business model to meet the specific requirements of the market segments.

  1. Mandate in China: Detergency Enhancement Additive Standard
  2. Low Emissions Refinery Blend in Australia as a base
  3. Direct Sales to Motorists

 


1. China Mandate Strategy

Cutting air pollution is a priority of Chinese leaders. President Xi Jinping promises to “make China’s skies blue again” by stating that air pollution control one of three priority “tough battles” for China in the years ahead at the 13th National People’s Congress in March 2018.

The health consequences of China’s air pollution are significant. One study linked air pollution to 1.6 million premature deaths per year in China.

China is facing a grim situation when it comes to controlling pollution from motor vehicles. There are 310 million motor vehicles in China in 2018 emitting of 40 million metric tons of major pollutants annually reported the Ministry of Ecology & Environment. The forecast of another 150m vehicles in the next five years would only add further pressure on the environmental resources.

PM2.5 concentration is the key air quality index in China. Vehicles are responsible for 45% to 52% of PM2.5 emission in urban areas.

The 13th FYP set a annual PM2.5 concentrations at 35μg/m., which is still 3.5 times above WHO guideline of 10μg/m.. In 2018, the national average PM2.5 concentrate in 338 cities was 39μg/m..

A series of studies based on real-world testing showed that China III and IV heavy-duty vehicles failed to show any reduction in NOx compared with China O vehicles. The real world emissions problem is a concern for MEE in air pollution control for vehicles.

 

Key Measures:

The State Council (SC)

In July 2018, the SC released a three-year action plan for air pollution control providing a timetable and road map for improving air quality  by 2020. Among various measures, the SC has mandated the study of using “detergency enhancement additive”(DEA) as a fast way to upgrade fuel quality at source to meet environmental goals. The assignment was given to the National Energy Administration (NEA) and the Ministry of Finance.

The Ministry of Ecology and Environment

In January 2019, with the approval of SC, the MCC announced an Action Plan to control the exhaust pollution of the diesel trucks. The diesel trucks are 7.8% of the total vehicle population, but account for 77.8 % of total PM emission. Among the measures to be taken, the MEE instructed relevant Ministries and Agencies to implement the decision. The priority areas for implementation will be in regions that have high pollution. The potential for MAZ is 45,000 tons only for diesel consumption in these regions.

 

The Key Implementation Role

In March 2019, China Automotive Testing and Research Centre (CATARC) has taken on the role of helping MAZ to expedite the implementation of the DEA standard.

CATARC belongs to SASAC (State-owned Assets Supervision and Administration Commission of the State Council) with a total assets of RMB7.14 billion. CATARC is the centralized technical organization of the auto industry and the technical supporting body to the relevant national government departments.

CATARC has submitted a detailed proposal to NDRC on the of the coordination with the various Ministries and agencies for the implementation of DEA program. This includes the legal definition of DEA, the testing method, the organization of “pilot cities testing”, the supervision and data collection of the tests, and coordination with the selected city governments, and the final evaluation of data.

CATRAC has scheduled the program to be completed within 12 months and the proposed budget of RMB 400m, which includes the purchase of DEA products.

Ultimately, the goal is to set up a legal standard for DEA for compulsory application in China. Interestingly, such DEA standard will be the world’s    first and it would be the fast way to upgrade the global fuel quality for better environmental and health benefits.

 


2. Low Emissions Fuel Strategy

In Australia, MAZ has been working with an international fuel distributor to develop a refinery blend in diesel. This will be the first for MAZ to be treated in bulk terminal tanks rather than individual vehicles.

The distributor has launched the next generation diesel for sale to mining and trucking companies based on fuel efficiency and low emissions. The earlier success with customers has attracted another major distributor to commence MAZ testing with a large mining company with international operation.

The interest to develop sales outside of China has commenced by one of these distributors. The next general diesel delivers fuel efficiency, low emissions, and reduction in annual maintenance cost. By adding in small doses, the current ultra-low sulfur fuel can achieves these commercial benefits to lower fleet operation

           


3. Retail Strategy

Singapore is the gateway city in testing an online retailer model that sells directly to individual motorists.

MAZ Nitro, the retail brand, has attracted more than 1,800 reviews online, making it the most reviewed fuel additive product in Singapore.

Customers have also rated it as 97% highly recommended.

Gasoline is a retail market model whereas diesel is for fleet operators.

Having more than 3,200 customers buying MAZ Nitro will provide a credible data base for gasoline market development with any of the oil majors.

Collectively, the data from retail customers support the efficacy of the product and sales have been developed out of references and social media rather than heavy advertising.