JERSEY CITY, N.J. – At least one Asian API Group III base oil producer sees sparkling prospects in Brazil, thanks to its dynamic passenger car and light commercial vehicle market.
There is now one car for every six people in Brazil, said Eduardo Brando Gonalves, director of sales and new product development at Petronas Lubrificantes Brasil, at the ICIS Pan-American Base Oils & Lubricants Conference here on Dec. 2. Thirty percent of the fleet is under three years of age, and new vehicles require higher quality lubricants. They, in turn, need a reliable supply of higher quality base oils.
Petronas, Malaysias national oil company, is a significant and growing presence in Brazil, Gonalves said. The companys blending plant in Belo Horizonte has capacity to produce 110,000 metric tons per year of lubricants, and is currently expanding. Construction will be completed by April, increasing capacity to 180,000 t/y.
Petronas claims 9 percent of Brazils finished lubricant market with its Syntium, Selenia, Paraflu, Mach 5, Urania and Tutela-branded lubricants. But Brazils finished lubricant market isnt Petronas only target. The introduction of Group III, Gonalves said, supports the continuous growth in vehicle sales.
Last August, he said, Brazils market for cars and light trucks topped Germanys. It is now the fourth largest in the world, after China, the U.S. and Japan. Since 2003, Brazils vehicle demand has grown 8 percent per year. The vehicle fleet in 2009 reached 30 million, including 24 million passenger cars and over 4 million light commercial vehicles.
Last year the average age was nine years, and now it is eight, Gonalves continued. Thirty percent [of the fleet] is under three years of age, and 40 percent is under five years.
While most vehicles in Brazil are designed to run on any combination of ethanol and gasoline, heavy-duty diesel engine oils have the largest market share. Of Brazils 696,000 cubic meter automotive lubricant market in 2009, heavy-duty diesel engine oils accounted for 45 percent, passenger car oils for 40 percent, and transmission fluids for 15 percent.
Fiat and General Motors have the largest passenger car market share in Brazil, followed by VW, Ford, Honda and others.
The drives for improved fuel economy, reduced emissions and greater durability are impacting Brazil just as they are Europe and North America. Higher quality lubricants are required to meet the more stringent specifications, Gonalves said, and all car companies are moving from 15W to 5W oils.
Brazil produces only Group I and naphthenic base stocks, with total capacity of 13,750 barrels per day. The automotive market in Brazil will require Group III imports to formulate lower viscosity grade lubricants.
From less than 10,000 tons in 2008, to 50,000 t/y now, demand for Group III in Brazil will exceed 100,000 t/y in 2013, said Gonalves.
Traditionally, Group III oils are delivered to Brazil using flexibags from Europe and North America. But, concluded Gonalves, Group III base stocks from Malaysia arrive in large quantities in chemical tankers, assuring Brazils blenders of consistent supply.