OREANDA-NEWS. January 14, 2013. China Aviation Oil (CAO), Asia's top jet fuel buyer, is planning to tap newer growth markets like India and the Middle East as part of its plan to expand globally, its chief executive said.

CAO's immediate plans are to focus on setting up its first European trading office in 2013 to meet growing demand from budget airlines, while it might target the Gulf and Indian markets for next year, chief executive Meng Fanqiu said.

It will also study the Australian market to identify growth opportunities as the country's imports of oil products increase with the closure of ageing refineries, Meng said.

"While China will still be the main locomotive (for jet fuel demand), other newer economies in Asia-Pacific will also fuel demand," he said.

CAO imports most of China's jet fuel needs and its top customers include the nation's three biggest international airports.

According to CAO's projections, jet fuel consumption by China will grow by 9 per cent to 10 per cent next year, near 2012 levels but lagging average annual growth of 11 per cent from 2011 to 2015.

"These two years it failed to achieve the growth rate, about 1 per cent difference, but 10 per cent is still high," Meng said.

"If the macro economy sees some improvement next year, then it might stand a chance to hit 11 per cent growth. In 2014, the macro economy will likely be better."

CAO also supplies jet fuel to airlines in Hong Kong and North America, where it made acquisitions this year. The company has now set its eyes on other regions.

CAO hired a marketing agent in India this year to look at growth opportunities there. It currently supplies jet fuel to Indian airlines in China through its subsidiary China Aviation Oil (Hong Kong).

The company has also started supplying at least one cargo of jet fuel to Middle East through an existing representative office of its parent company, China National Aviation Fuel Group Corp, Meng said.

"If we see some significant growth in Middle East or Indian markets in terms of volumes, then we may hire local traders there," he added.

At present, the Singapore-listed company has eight traders and about 12 operations staff based in Singapore. As part of a 2015 to 2020 strategy CAO is formulating, the company hopes to hire a few international traders, Meng said, declining to provide further details until long-term strategy is disclosed to shareholders in February.

The company has three main aims - to develop from a regional to a global company, expand focus from jet fuel trading to include other oil products and acquire assets to support its expansion plan.

Meng sees 2014 as a period of growth that will set the tone.