- Epoxyoil LUBE REPORT
Lubricant report
29th August , 2009
Vol. 9 Issue 30
Shell Remains Global lube leader.
Shell remained the leader in global market share of finished lubricants in 2008, with a 13 percent share, edging
out second place ExxonMobil, reported consultancy Kline and Co., which estimated the global market at 38.2
million metric tons in 2008, down 2.6 percent from 2007.
Kline’s study, “Competitive Intelligence for the Global Lubricants Industry, 2008-2018,” found that Shell remained
ahead of its biggest competitor, ExxonMobil, which had an estimated 11 percent market share in 2008. Rounding
out the top five were BP at 8 percent, Chevron at 6 percent and Petro-China at 4 percent. Total also has a 4
percent market share but is below Petro-China from a volume standpoint.
The Asia-Pacific region is expected to continue to show the most robust growth on a volumetric basis, according
to Kline’s study. The impact of the global recession has been less severe in China and India. Together, the two
account for 18.4 percent of global lubricant consumption. The study noted that the markets in the United States,
Germany, Russia, and Japan show the largest declines due to the onset of recession.
Of the three market segments, the consumer automotive segment seems to be the least impacted as compared to
the commercial automotive and industrial oils and fluids segment, the study suggested. “On the whole, the
consumer automotive segment is expected to recover more quickly due to the growing sale of new vehicles in
Asia, the fact that gas prices are lower compared to last year, and that public transportation is still not well
developed in many countries,” Geeta Agashe, vice president of Kline’s energy research practice, told Lube
Report.
Agashe noted that while synthetics show growth opportunities, semi-synthetics have suffered. “In addition,
conventional branded products have taken a significant hit,” she continued. “On the other hand, trusted private
label brands like Wal-Mart’s have increased sales.”
She noted that the commercial automotive and industrial oils and fluids segment will take the longest to recover.
Kline’s study found that the slump in auto manufacturing, construction, and general industrial machinery
industries have led to a slump in the trucking, quarrying, aggregates, mining, chemicals, fabricated metals, and
primary metals industries.
“Process oils and metalworking fluids in the industrial segment and ATF in the automotive segment seem to be
the most impacted by the recession, as well as by a significant loss in factory-fill volumes,” said Agashe. The food
processing and power transmission industries seem to be the least impacted. “Also, we believe that the large
majors with a balanced portfolio will be the least impacted, and the niche marketers who are specialized and as an
example only active in the process oils or metalworking fluids segments, or primarily active in those countries
which have felt the brunt of the recession will have to fight hard to survive,” said Agashe. She noted this might
indeed be a great time for companies to seek acquisition targets and stay the course, as the markets will re-
bound eventually.
For more information on the research, visit www.klinegroup.com/reports/y533.asp.
Lubricant report
30th August , 2009
Vol. 9 Issue 31
Lubricants in Nigerian Market is saturated with adulterated and low
grade base oils
Lube Report Nigeria: we have information that market of lubricants in Nigeria is saturated with substandard low
grades base oils which sale is not on road sides alone. It is also in stores and organised markets. Reportedly,in
view of this that the Federal Government through its regulatory arm, the Department of Petroleum Resources
(DPR), decided to curb the excesses of these individuals and stamp out the sub-standard product from the
Nigerian market, and in effect ensure the availability of regulated and quality lubricant products. It is decided from
January 2010 there would be zero tolerance on all producers of sub-standard lubricants as well as those trading
and distributing the products. The department also set to clamp down on all illegal importers of base oil into the
country, a development which is now rampant in the country. Lubricant market is fraught with non-availability of
base oils. The lubricant industry, is also fraught with rampant retailing and unbranded lubricants in doubtful
measures and packaging by unauthorised persons, importation of base oils in high volumes and the worrisome
use of berth 5 in Apapa as well as importation of aviation industry lubricants. The use of substandard lubricants
have caused increased in maintenance cost as there is increased in frequency of oil change and overhaul on
automobile engines, machines, generating sets etc. As per the information the agency and the Nigerian Port
Authority (NPA) have decided that henceforth, no base oils will be imported into the country through the berth
5link, except it is used to track down those who are bringing large quantity base oil and low quality lubricants into
the country. Reportedly, Kaduna Refining and Petrochemical Company Limited is charged with the responsibility
of supplying base oil to lubricant blending firms should be re-instated which would save the country the agony of
importing those who import base oil and also make the business of adulteration to people who have claimed that
they are only filling that gap created by the inefficiency in their refinery plants.
Lubricant report
3 september , 2009
Vol. 9 Issue 32
Shell to build USD 100m lubricant blending plant in Russia
The plant, which is being built in Torzhok in the Tver region, north-west of Moscow, will have a capacity of 200 million
litres a year (about 180,000 tons), making it one of the largest in the Shell network worldwide. Commercial operation is
expected to begin by the end of 2010.
As a leading international supplier of lubricants and greases to Russia, Shell will bring advanced technology to the local
market and ensure high quality products through stringent quality control. Bringing world-class production capacity
closer to customers will allow Shell to supply a full range of high-quality motor oils, transport oils and industrial lubricants
to the Russian market, with the potential to expand distribution to neighbouring countries in the future. Large industrial
customers will benefit from the bulk delivery of technologically advanced products, speeding up delivery times and
reducing storage costs.
David Pirret, Executive Vice President for Shell Lubricants, said: "Russia is a country of strategic importance for Shell,
and today's announcement is further evidence of our commitment to grow our business here, not only in upstream but
also in downstream. Russia is the third largest lubricants market in the world and it is vital that Shell, as the leading
global lubricants supplier has a significant presence here. Shell Lubricants has seen seven consecutive years of
profitable growth in Russia and we believe that setting up lubricants production facilities will help us capitalise on further
growth opportunities."
Dmitry Zelenin, the Governor of the Tver region, noted: "We are glad that Shell is building a lubricants blending plant in
the Tver region. The plant will use advanced operational and organizational technologies, employ Russian workforce –
from maintenance to managers, and create around 150 new jobs. The regional administration will continue supporting
our foreign partners. I am confident that there will be no difficulties to hinder the project implementation, and commercial
operation will start by the end of next year as planned."
Lubricant report
3 september , 2009
Vol. 9 Issue 33
Sub-Standard lubricants in Nigeria
The petroleum products' enforcement agent, which confirmed influx of substandard lubricants into the country at a
workshop organised by the Tribologists Society of Nigeria (TSN) in Lagos, said that the nation is "losing so much on this
importation," challenging local producers and blenders to brace up for the shortfall, which may arise from the stoppage
of off-spec lubricants' importation.
TSN, it would be recalled, alerted Nigerians through the coordinator of the first TSN national lubrication workshop, Dr.
John Erinne, of the influx of larger volumes of adulterated lubricants into the Nigerian market, which consumes 300, 000
barrels (47 billion litres) per annum.
The DPR's assistant Director, Pipeline, Plants and Installations, Olumide Adeleke, who presented a paper at the
workshop gave a January, 2010 deadline to stamp out the sales of lubricants in bulk tanks and in plastic bottles at filling
stations.
He said: "In order to effectively stem the menace of the sale of substandard lubricants, some additional measures were
recently taken like the branding and packaging of all lubricants by January 1, 2010 thereby stamping out the sales of
lubricants in bulk tanks and in plastics bottles at filling stations and at road sides respectively. "Conduct a nationwide
inspection of lube blending plants to determine the current state of blending facilities, collection of production data over
a three-year period, determine the average capacity utilisation of respective blending plants and shutting down
unlicensed and erring plants."
TSN President, Professor Steven Odi-Owei, had earlier reiterated the society's resolve to end importation, production
and distribution of substandard lubricants in Nigeria, "through sensitisation of the public, because the country's
industrial sector is at risk of machine breakdowns and knocks."
The tribologist said the Power Holding Company of Nigeria (PHCN) and other heavy lubricants users in Nigeria could
also be at the receiving end.
"Lubricants users, who also include car owners, are at risk, and they should beware of even imported off-spec
products", Erinne had said at a press conference to herald the workshop in Lagos.
Speaking in the presence of Kayode Sote, Imafidon Osarenkhoe and David Obadare, Erinne stated that the "Minimum
Quality Lubricant Standard (MQLS) is not being respected by the importers of the products and some of local
producers, thus the workshop to sensitise the public."
The total market turnover of the downstream sector in Nigeria, the Managing Director of Matrix Petrochemical Limited
said, "is N900 billion while the profit margin of the lubricants market is between N30-N40 billion, which constitutes some
great percentages."
Stressing that the TSN's workshop would be held in collaboration with two major regulating agencies -the Standard
Organisation of Nigeria (SON) and the Department of Petroleum Resources (DPR), Erinne pointed out that the
"workshop was aimed at getting all major stakeholders to formulate a communiqué which will change the situation for the
better."
Corroborating Erinne's view, Sote noted: "The base oil market in Nigeria is worth $300 million and about 10 marketers,
who have formed a cartel single-handedly make $45 million of the revenue at the expense of the Nigerians."
About one third of energy generated is, according to him, "due to friction and wears and this explains why PHCN is not
working at optimal level."
He said a minimum of N50 million is needed to build a lubricant plant in Nigeria, the Chief Executive Officer (CEO) of
Lubeservices maintained that about 24 standard lubricant oil plants have been built in Nigeria, "showing that Nigeria has
abundance of experts and expertise that can successfully fill the vacuum that would be created by the stoppage of
substandard oil into the Nigerian market."
Epoxy Oil Lubricant report
8th october 2009
vol.9 Issue 33
Market Research: Global Recession Levels Serious
Blow to Lubes Industry
By Geeta Agashe, Vice President, Energy Kline
The worldwide recession has sent the global lubricants market into a tailspin – even demand in the usually burgeoning
Asia-Pacific region has slipped by almost 3%. But, while the global community may be “in it together,” the specific market
drivers and impacts of the recession vary significantly from one geographic region to the next. Given this uncertainty,
what might the finished lubes industry look like once the worst is over?
The onset of the global recession, fueled in large part by the mortgage meltdown and high fuel prices in the United
States, has weakened the market for finished lubricants around the globe. While few nations have been spared from the
effects, the contributing factors and varying impacts have demonstrated that, while we all may be in trouble together,
there is no one-size-fits-all solution for recovery.
LUBRICANT DEMAND BY REGION 2008
lubricant demand by region
The Underwhelmed United States
Demand for consumer lubricants in the United States contracted significantly as the recession drove consumers toward
frugality. Job losses and home foreclosures kept Americans off the road, with vehicle miles traveled in 2008 down by
3.6% over 2007. Fewer miles driven means longer drain intervals, which translates into less business for both DIY retail
sales and bulk PCMO outlets like quick lube and service stations. Until the recent “Cash for Clunkers” program,
consumers were also holding tight to their older vehicles, sending new car sales down significantly and stifling demand
for factory fill.
In the commercial market, stymied consumer spending and cutbacks in industrial production have resulted in a slump in
the freight-hauling industry – and a corresponding slide in HDMO demand. Meanwhile, lubes consumption in the mining,
construction, and manufacturing industries has plummeted as industrial production of nearly all varieties and new home
construction has sunk to the lowest levels in years.
The U.S. economy has shown a few meager signs of improving, but with the segment that suffered the worst losses –
industrial lubes – so closely tied to overall recovery, it is unlikely that we’ll see a significant rebound until near the end of
2010.
Germany Withers Under Export Losses
Where the U.S. economy has suffered domestically, Germany’s has taken a major hit in its manufactured goods
exporting trade. With nearly two-thirds of German exports falling into the automotive, machinery, and chemicals industry
– each which has seen significant contraction in other markets – the German economy is reeling with industrial
production in the first quarter 2009 down by 20% compared to the same time last year. Meanwhile, domestic
consumption remains mostly unchanged, further indication of this export-based economy.
In one bright spot, sales of cars and light vehicles were up by 18% for the first half of 2009, spurred by a government
subsidy program similar to that of the United States. However, the trucking and logistics industry remains depressed,
alongside manufacturing, which will likely hold German lubricants consumption in a slump over the next two years.
Russian Outlook Grim
Farther to the east, the Russian lubes market is facing an even gloomier outlook. Similarly dependent upon the export
business, albeit it the export of oil, metals, and minerals, the Russian economy is on the verge of total collapse sparked
by government-spending-induced inflation and fears of sudden deflation. State firms are under tremendous pressure to
meet enormous debt obligations undertaken during the boom in crude prices last year without laying off employees,
against the backdrop of a manufacturing meltdown, rising interest rates, depleted foreign credit, a pull-back in consumer
demand, and significant overstock inventories in various supply chains.
The numbers are down in nearly every lubricants consumption class: sales of automobiles are dismal; construction is at
a near stand-still; freight is barely moving; industrial production is at a crawl. Lubricants consumption is expected to
decline by more than 10% in the consumer segment and more than 20% in the commercial and industrial sectors
through 2010.
The Unshakeable Chinese
In the Far East, the Chinese economy remains significantly more resilient. Car sales have soared 30% over the past
year, creating strong demand in the factory fill and overall PCMO markets. In the commercial segment, the trucking
industry has taken a significant loss, but represents only about one-fourth of the overall commercial market –
consumption in the construction, agriculture, mining, and public transportation sectors are all up for the period October
2008-March 2009.
Likewise, the hardest-hit industrial markets (textiles, primary metal, and transportation equipment) comprise only 20% of
overall consumption in the segment. Consumption in most other major segments is up. Given the relatively small impact
the recession has had on the Chinese lubricants market, growth – albeit relatively small – is expected through 2010.
The Global Prognosis
Given the varied impacts across each of the major markets, the prognosis for the industry varies with each segment.
PCMO will likely recover more quickly buoyed by the growth in vehicle population throughout Asia and global fuel prices
which remain in the moderate range. Improvement in HDMO consumption is closely tied to the overall economic recovery
in each country and will improve slowly as global recovery inches ahead. Industrial lubes will likely remain the most
depressed. Finally, metalworking fluids will suffer the longest given this segment’s dependence on the slow-to-recover
automotive industry.
Survival under these conditions will be much easier for larger, multi-national and well-diversified marketers. Those with
broad product portfolios, wider end-use segments and greater geographic reach can leverage the ability to shift
production and distribution focus from struggling segments and depressed markets to those that remain on the plus
side. Meanwhile, specialty suppliers who may see severe contracting in their specific niche markets will likely fare much
worse as the global economy refuses to recover at the same speed with which the bottom dropped out.
8th october 2009
vol.9 Issue 33
Market Research: Global Recession Levels Serious
Blow to Lubes Industry
By Geeta Agashe, Vice President, Energy Kline
The worldwide recession has sent the global lubricants market into a tailspin – even demand in the usually burgeoning
Asia-Pacific region has slipped by almost 3%. But, while the global community may be “in it together,” the specific market
drivers and impacts of the recession vary significantly from one geographic region to the next. Given this uncertainty,
what might the finished lubes industry look like once the worst is over?
The onset of the global recession, fueled in large part by the mortgage meltdown and high fuel prices in the United
States, has weakened the market for finished lubricants around the globe. While few nations have been spared from the
effects, the contributing factors and varying impacts have demonstrated that, while we all may be in trouble together,
there is no one-size-fits-all solution for recovery.
LUBRICANT DEMAND BY REGION 2008
lubricant demand by region
The Underwhelmed United States
Demand for consumer lubricants in the United States contracted significantly as the recession drove consumers toward
frugality. Job losses and home foreclosures kept Americans off the road, with vehicle miles traveled in 2008 down by
3.6% over 2007. Fewer miles driven means longer drain intervals, which translates into less business for both DIY retail
sales and bulk PCMO outlets like quick lube and service stations. Until the recent “Cash for Clunkers” program,
consumers were also holding tight to their older vehicles, sending new car sales down significantly and stifling demand
for factory fill.
In the commercial market, stymied consumer spending and cutbacks in industrial production have resulted in a slump in
the freight-hauling industry – and a corresponding slide in HDMO demand. Meanwhile, lubes consumption in the mining,
construction, and manufacturing industries has plummeted as industrial production of nearly all varieties and new home
construction has sunk to the lowest levels in years.
The U.S. economy has shown a few meager signs of improving, but with the segment that suffered the worst losses –
industrial lubes – so closely tied to overall recovery, it is unlikely that we’ll see a significant rebound until near the end of
2010.
Germany Withers Under Export Losses
Where the U.S. economy has suffered domestically, Germany’s has taken a major hit in its manufactured goods
exporting trade. With nearly two-thirds of German exports falling into the automotive, machinery, and chemicals industry
– each which has seen significant contraction in other markets – the German economy is reeling with industrial
production in the first quarter 2009 down by 20% compared to the same time last year. Meanwhile, domestic
consumption remains mostly unchanged, further indication of this export-based economy.
In one bright spot, sales of cars and light vehicles were up by 18% for the first half of 2009, spurred by a government
subsidy program similar to that of the United States. However, the trucking and logistics industry remains depressed,
alongside manufacturing, which will likely hold German lubricants consumption in a slump over the next two years.
Russian Outlook Grim
Farther to the east, the Russian lubes market is facing an even gloomier outlook. Similarly dependent upon the export
business, albeit it the export of oil, metals, and minerals, the Russian economy is on the verge of total collapse sparked
by government-spending-induced inflation and fears of sudden deflation. State firms are under tremendous pressure to
meet enormous debt obligations undertaken during the boom in crude prices last year without laying off employees,
against the backdrop of a manufacturing meltdown, rising interest rates, depleted foreign credit, a pull-back in consumer
demand, and significant overstock inventories in various supply chains.
The numbers are down in nearly every lubricants consumption class: sales of automobiles are dismal; construction is at
a near stand-still; freight is barely moving; industrial production is at a crawl. Lubricants consumption is expected to
decline by more than 10% in the consumer segment and more than 20% in the commercial and industrial sectors
through 2010.
The Unshakeable Chinese
In the Far East, the Chinese economy remains significantly more resilient. Car sales have soared 30% over the past
year, creating strong demand in the factory fill and overall PCMO markets. In the commercial segment, the trucking
industry has taken a significant loss, but represents only about one-fourth of the overall commercial market –
consumption in the construction, agriculture, mining, and public transportation sectors are all up for the period October
2008-March 2009.
Likewise, the hardest-hit industrial markets (textiles, primary metal, and transportation equipment) comprise only 20% of
overall consumption in the segment. Consumption in most other major segments is up. Given the relatively small impact
the recession has had on the Chinese lubricants market, growth – albeit relatively small – is expected through 2010.
The Global Prognosis
Given the varied impacts across each of the major markets, the prognosis for the industry varies with each segment.
PCMO will likely recover more quickly buoyed by the growth in vehicle population throughout Asia and global fuel prices
which remain in the moderate range. Improvement in HDMO consumption is closely tied to the overall economic recovery
in each country and will improve slowly as global recovery inches ahead. Industrial lubes will likely remain the most
depressed. Finally, metalworking fluids will suffer the longest given this segment’s dependence on the slow-to-recover
automotive industry.
Survival under these conditions will be much easier for larger, multi-national and well-diversified marketers. Those with
broad product portfolios, wider end-use segments and greater geographic reach can leverage the ability to shift
production and distribution focus from struggling segments and depressed markets to those that remain on the plus
side. Meanwhile, specialty suppliers who may see severe contracting in their specific niche markets will likely fare much
worse as the global economy refuses to recover at the same speed with which the bottom dropped out.
Epoxy Oil Lubricant report
15th october 2009
vol.9 Issue 34
Shell India to Double Production capacity due to high demand for Shell Lube
Chennai, Oct. 12: Shell, a global major in the industrial and automotive lubricant business, is planning to set up its
second manufacturing plant in India.
Shell India has a manufacturing plant at Taloja in Maharashtra with a production capacity of 80 million litres per year.
“We have reached the name plate capacity at the Taloja facility. As our growth in India is in double-digit, we are
considering to set up our second manufacturing plant in India in the next 12 months,” said Mr Donald Anderson, country
head- lubricants, Shell India Pvt Ltd.
Shell also believes that the company has reached a critical mass with about eight per cent market share in the lubricant
business that is traditionally dominated by the government-owned companies. In addition, he said, “the brand is in
demand,” and the company has established strong relationship with its Indian customers.
Mr Anderson said the company has yet to decided whether the new plant would set up by the Shell itself or with a joint
venture partner. The company will take a decision in the next 12 months on this.
The plant is likely to be set up in southern or eastern part of India near to a port city with an investment of $100
Epoxy Oil Lubricant report
28th Nov. 2009
vol.9 Issue 36
Shell Opens State-of-the-Art Lubricants Blending Plant in China
Saturday, 28 November 2009 09:24 epoxy oil news
Houston. Shell Lubricants today announced the start-up of its newest lubricants complex in Asia to meet growing
demand in China. With a production capacity of 50 million gallons a year, and the potential for a phased development to
100 million gallons a year, the complex could become one of Shell's top three lubricants blending plants worldwide in
volume terms.
In a further development, Shell also announced new investment in a technical facility at the complex. This will offer a
range of technical services, including a quality control laboratory to provide key customers and original equipment
manufacturers (OEMs) in the automotive industry with technical research, marketing and training services related to
their lubricants applications.
Located in Zhuhai, Guangdong Province, the blending plant will be Shell's sixth in China and will produce consumer,
transport, industrial and marine lubricants, targeted at the Chinese market.
David Pirret, Executive Vice President for Shell Lubricants, said: "The investment in a lubricants blending plant in Zhuhai
is part of Shell's strategy of selective Downstream growth and allows us to support demand from local and international
customers based in China, which is the world's fastest growing lubricants market. Once the technical facility at Zhuhai is
completed, our customers in China will have the opportunity to experience our leading lubricants technology capability
firsthand."
Lim Haw-Kuang, Executive Chairman of Shell Companies in China, said: "This is another milestone in Shell's business
development in China and the latest evidence of our commitment to China and Guangdong. We will continue to look for
key growth opportunities to contribute to China's fast growing economy by providing high quality energy products and
solutions."
For the third consecutive year, Shell has been named the number one global lubricants supplier - selling more
lubricants in 2008 than any other company in the world, with a 13% share of the market in volume terms (Source: Kline
& Company). This is testament to a consistent strategy, strong brands and technology leadership, with a focus on
delivering first-class lubricants solutions to customers, wherever they may be.
Shell is already the largest international lubricants supplier in Asia by sales volume and the No. 1 international supplier
of lubricants in terms of market share in China.
Epoxyoil Global news
