Shell China has acquired a 75-percent stake in Tongyi, China's largest privately owned lubricant oil company. Although Huo Zhenxiang, the former chairman of Tongyi and the vice chairman of the new joint venture, secured the intactness of Tongyi's brand, he failed to crown Tongyi a shining independent private lubricants star in the market. In the past 13 years since it was established, Tongyi has grown rapidly into a leading lubricants make with a network of 2,000 distributors and 90,000 retailers across the country. The company is well-known for its innovative marketing and sales strategies - it is the first Chinese lubricants supplier to advertise on China's national television and introduce the ERP system. Its sales volume mounted to RMB 1.2 billion (US$ 152 million) in 2003, standing up to the might of Sinopec's Great Wall and CNPC's Kunlun. In addition to the counter-attacks from its two domestic rivals,Tongyi had to deal with the bankrupt rumor, the shortage of base oil worldwide and rocketing oil prices. Tongyi finally chose to merge with Shell rather than go- ing public for up- stream resources. On the other hand, Shell could benefit from Tongyi's sales and distribu- tion network in China. With sufficient fund and upstream resources, Tongyi now has the confidence to stride the market at home and abroad.