South Korean lubricant marketer startup Seoul Innovative Technologies Corp. recently began to have lubricants produced in Russia through a toll blending agreement, the company told Lube report last week.
SIT is adopting a strategy followed by numerous other Asian businesses that have flocked to Russia since Western companies exited the market in protest of Russia’s invasion of Ukraine.
While Western companies are shunning the market, many Chinese, and some Japanese and Korean companies, decided to take a business-as-usual approach. Lubricant suppliers now doing business in Russia are seeking to fill the void left by Shell, TotalEnergies and ExxonMobil – which together held at least 20% of the market before the war.
Because its products are produced in Russia, SIT said it complies with a government sponsored import substitution program, a decade-old protectionist policy.
“The Russian localization of our production [aims] to lower the risks posed to the supply of production and its components by the geopolitical and economic situation,” the company said in its Nov. 11 news release.
SIT plans to produce “hundreds of thousands of tons” of lubricants meant for Russia, some countries of the Commonwealth of independent States, Northeast Asia and the Middle East.
The company’s products are being produced by Obninsk-based toll blender United Petrochemicals, whichclaims to make more than 300,000 tons of lubricants annually, half of which is motor oils, according to the toll blender’s website. A former lubricant distributor, United Petrochemicals opened its blending site in 2018 and claims to be the largest toll blender in Europe.
The company also offers customized production of plastic canisters. In Russia, SIT currently sells its products under the Mirax brand. It uses different brands in South Korea and other neighboring countries.