Traffic and air pollution seem to go hand in hand, or for pedestrians hand over mouth. But for Caltex, air pollution is a battle that needs to be won.

Air quality in Hong Kong has improved significantly in the last couple of years, thanks to oil companies' initiatives backed by the government's series of measures to improve air quality in the territory.

"We are committed to creating a cleaner environment in Hong Kong as part of our efforts to realise the core value of being socially responsible," Peng Xiao-fei, Chairman of Caltex Companies (Greater China), said. "Though the current domestic malaise has caused a drop in our earnings, and we need to be very cautious with investment, it is still worth making Hong Kong a cleaner place to live."

Caltex's relationship with Hong Kong can be traced back to 1913 when Texaco, one of its founders, started out by selling kerosene in the territory and China. In 1936, Texaco joined forces with Chevron, which discovered oil in the Middle East, to set up Caltex in Hong Kong.

Over the years, Caltex has built up a large service station network with a total of 49 outlets in Hong Kong. In addition to its retail business, the company also supplies fuel for two local bus companies and the Chep Lap Kok Airport, among others.

In 1991, Caltex established a Green Fund, among the first of its kind in the local oil industry, to coincide with the introduction of unleaded gasoline to the territory. To raise public awareness of environmental protection, over the past 10 years the fund has donated nearly HK$10 million to about 250 community programmes.

In 2000, the company was the first to launch ultra-low sulphur diesel in Hong Kong and Asia. Containing 100 times less sulphur (0.005%) than regular diesel, it has effectively reduced the amount of sulphur particulates and black smoke emitted by diesel vehicles.

Along with what was another "first" move in Hong Kong, in line with the introduction of LPG taxis in the same year, Caltex set up Hong Kong's first combined auto LPG and gasoline filling station in Pokfulam.

Given the current downturn, Caltex, like many others businesses, has been trying to encourage local residents to look beyond the current tough times. Last summer, it participated in the Bounceback Hong Kong campaign, and ran "Fuel up Hong Kong" posters around town featuring positive messages from ordinary Hong Kong people.

During the SARS outbreak in March this year, it joined hands with the City Junior Chamber to launch an event for kids from primary schools, teaching them to view the current SARS incident from a balanced perspective. It also partnered with the Tung Wah Group of Hospitals to raise funds for the Anti-SARS Emergency Relief Fund to help victims' families, support community clean-ups, and provide anti-SARS medical supplies to those hospitals in need.

Caltex also joined forces with the business community to sponsor the Joint Business Community Conference 2003 -- Business After SARS, organised by HKGCC in conjunction with Operation UNITE to demonstrate to the world the business community's full vote of confidence in Hong Kong following the lifting of the World Health Organisation's (WHO) travel advisory for Hong Kong.

"The ongoing economic slowdown in recent years and the shrinking market have exerted much pressure on our business," Mr Peng admitted.

Nonetheless, "Hong Kong remains an important base for Caltex in view of its competitive edges, especially its proximity to Mainland China," he added.

Caltex re-entered the China market in the late 1970s by establishing an office in Beijing. It was also among the first foreign oil companies to set up retail outlets in China. Caltex has also invested hundreds of millions of dollars in various projects around the country, including Guangdong, Fujian, Jiangsu, Tianjin and part of Northern China. Currently, Caltex operates retail networks in South China and China's first underground LPG terminal in Shantou, and its lubricants business has grown rapidly in the last decade to give the company a nationwide presence.

"But Hong Kong is still our headquarters in the Greater China region. It offers technological, financial, human resources and other support services to Caltex's operations in the Mainland and Taiwan," he said.