In the past, there has been an aggressive financial turmoil that affected not only developed regions like the US and Europe but also other regions. This was a major impact that was attempting to cripple the performance of the lubricant industry, transport equipment, general machinery fabricated metals and mining.
For example China, there was a major contraction demand that transpired back in 2012. It included additives, lubricants, and other base oils. The government really tried to re-align the economy to be an investment driven instead of export. They wanted the economy to focus more on domestic consumption.
Presence of currency fluctuations, volatile oil prices, alterations to oil-derived products, product shortages and petrochemical flows are some of the factors that have been posing challenges to the lubricant and base oil industry. Additionally, a continued highlighting on energy proficiency sustainability and environmental factors have also contributed to this.
Despite all these challenges, there has been numerous opportunities and the lubricant industry has potential infrastructure that is able to rise to all these challenges and proceed to provide remarkable earnings to all the stakeholders.
Some oil companies started to blend their new gas and injected the products in the line of their branded finished synthetics and lubricants. This was a sign of a significant growth as many parts of the world also showed this sign of expansion. Various group 1 base oils and refineries have continued to shut down in most mature economies. On the other hand, there is an investment in the east of Suez regions where there is an increase in the number of refineries that are seeking to re-strategize the footprints of this new modern world.
National players had very little interest in global business. However, now they can be seen flexing their wings in most rising economies and are aggressively demonstrating both global and regional ambitions in the lubricant and automotive industry. Major changes have occurred. There has been several acquisitions and mergers which many players view as a bright path to follow.
Both regional and national oil organizations have been expanding. Companies like gulf oil bought the Houghton International brand while the Brazil oil company Cosan purchased United Kingdom’s chemical and Oil Company. Some companies have also started to build lubricant facilities which will see them export the lubricant brands to other nations. Spectra Oil in Congo has been on the line to offer services and has remained committed to delivering to the consumers.
Apart from that, there is legislation that has been constantly progressing concentrating more on fuel efficiency driving hardware and new lubricant solutions forward. This can be termed as the genesis of a new industry whose scope is beyond gas and petroleum.
Back in 2012, it was certainly not a good year for the lubricant industry. There was no demand for finished lubricant products. This slowed down the growth as it was expected. Despite the growth that was experienced in the US, the thriving conditions in Europe and several business contractions in China the lubricant market still remained flat especially in 2012. Comparing, 2011 was better as there was an increased volume in demand.
This was not the end of everything, it was not a point that could summarize everything as there were numerous opportunities bubbling to the surface.
Emerging expansion patterns.
It’s clear that the Asia-pacific region is the most vibrant with an increasing appetite for finished lubricants. The region has been experiencing growth for these products which is a significant boost for the lubricant industry.
Rapid industrialization has been a key factor. It has seen the middle class increase their purchasing power and with the improved infrastructure, this has significantly led to the growth of new sales and vehicle production. India, South Korea, China, and Japan are the leading markets for finished lubricant products. Despite this growth, it comes in hand with risk opportunities where there maybe branding and supplying of counterfeit lubricant products. This cases have been there and are very high, totalling to around 25%.
Both heavy duty and passenger car motor oils and all industrial lubricants are under reformulation and upgrade of quality are being driven by the demand to elevate the fuel economy. There is also a need to increase the durability of engine oil, compatibility with all biofuels which are ethanol and biodiesel and compatibility with discharge control devices.
There has been competition from the national players. Global lubricant marketers are on the rise to secure greater markets in the lubricant sector. This has really frustrated all the upcoming players. However, this has not hindered them from flexing muscles and gearing up for the challenge.