Cool Lubes Continues to Hold Market Share Despite Venezuela Woos — Joe Issa
It has long been recognized that generally, there is a direct relationship between the performance of a company and the health of the economy in which it operates, on the basis of which the business sector in Venezuela is expected to be negatively impacted by the country’s current economic woos brought about by the huge drop in oil prices which the cartel has decided to maintain.
The price of oil on the world market has declined considerable to a 13-year-low of below US$30 per barrel. As a result, there has been a significant short fall in oil revenues in the past eight months causing Venezuela’s President to declare an economic emergency, as it finds its back against the wall of opposition lawmakers who control the Congress.
However, one company that is not expected to encounter any difficulties, because of its size and strength, is Venoco Lubricants International, Venezuela’s largest lubricants manufacturer, which supplies Local Distributor Cool Lubricants, a subsidiary of Joe Issa’s group of over 50 Cool companies covering several sectors of the Jamaican economy.
Venoco Lubricants International has expanded its product base in Jamaica with the introduction of several new products through its Cool Lubes distributor in Ocho Rios where the Issa-founded Group is headquartered, making it one of the few large Jamaican companies to locate in the resort town.
As a result of the alliance with the Venezuelan giant, Cool Lubes has increased its share of the Jamaican market, supplying a new range of products to service station operators and other business interests. The products include diesel lubricating oils, transmission oils, motor oils and power steering fluids.
In addition, the collaboration has helped Cool Lubes to penetrate the market that has traditionally been dominated by Shell, Esso and Texaco, which are household names in Jamaica for decades.
Despite their traditional dominance, Issa, who has already built a reputation as a brand builder, led Cool Lubes in making significant inroads into the market with the Venoco brand of lubricants, which technical details are now common knowledge among motorists.
“Not being a Shell, Texaco or Esso lubricant, it would be difficult to get motorists to buy Venoco until they get to know about it; so we brought down Venezuelan experts to explain the benefits of the products and provide as much information about them as the market wanted to know.
“We were confident that when motorists begin to try the product, they would experience for themselves the quality of our Venoco brand,” says Issa.
Venco is said to be competing head on with well known brands like Shell and Castrol, and is doing well all along the north coast, especially in St Ann, Trelawny, the second city Montego Bay and, to lesser extent, in Kingston, St Catherine, Clarendon and Manchester.
Starting with distributing lubricants, Cool Lubes expanded into dozens of automotive-related small items like battery terminals, bulbs, jacks, wiper blades, hose clamps, fuses, oil filters and other products. Apart from the Venoco brand, the company distributes products on the Super-S brand, such as gas and oil treatments, sealers and degreasers.
The deep and sustained cut in oil prices has affected revenues of oil producing nations including Venezuela, where one can still find the cheapest gas on Earth — just US$0.02 per litre. And despite the much lower oil revenues the government continues to subsidise gasoline to the point that motorists now pay almost nothing to drive their vehicles.
By comparison, however, Jamaica, not being an oil producer, sells gas at US$0.94 per litre, which is still four cents below the world average of US$0.98, and lower than those of many of its Caribbean neighbours.
Issa discerns then, that “given the propensity of Jamaicans to drive, at today’s low prices at the pumps they can be expected to drive even more, which is good for the Venoco brand of products,” arguing that “the more you travel the more gas, oil, steering and transmission fluids you use…this means that Cool Lubes will always have a large captive market and thus, a safe and profitable investment.