A construction and tourism boom and a rapidly expanding vehicle fleet are beefing up finished lubricant demand in Saudi Arabia but stiff competition and price sensitivity can trip up even the top-tier players, according to a lubricant sales insider based in the country.
Analysts expect vehicle ownership in Saudi Arabia will pass 17 million units by 2030, driven by women being permitted to drive for the first time in 2017. Since then, the number of tourists has also grown by more than 100% and they require more rental cars and public transport. Also, expanding industry and infrastructure, evolving environmental regulations including mandates under Saudi Vision 2030 for sustainability and biodegradable formulations and infrastructure mega-projects are key growth drivers for industrial lubricants.
Growth of industrial lubricants consumption is expected to hit 667.53 million liters by 2030, up from 582.86 million liters currently, according to market research by Mordor. Automotive applications account for around 409 million liters, which Mordor predicts will reach 460 million liters by 2030.
Service quality, technical support, logistics and relationship management frequently trump price in customer purchasing decisions in the kingdom. Sales teams at companies like Fuchs Saudi Arabia often manage the full sales process from prospecting to invoicing, a vital differentiator in this market.
“Pricing still does remain a big factor, but it isn’t the only factor because if you have a good salesperson who can actually convince you they’re providing more value, then that is the real key to gaining market share,” Osama Nadeem, Fuchs Saudi Arabia’s industrial account engineer, told Lube Report. “The only thing is that [matters is] how well you know your services, how quickly you provide to your clients and the relationship that you have with customers.”
The dominant player in the country is Petromin Corp., with about 40% of the Saudi lubricants market. It operates multiple blending plants across Jeddah, Jubail and Riyadh with combined capacity of around 6,000 metric tons per month. Behind Petromin is Shell with 4,500 tons and Fuchs with 3,000, Naseem explained.
In the punishing Arabian climate, machinery such as long-boom cranes can consume about 400 liters, roughly two drums, of hydraulic oil per deployment. Drain intervals average every two months, largely due to the kingdom’s high temperatures and heavy equipment usage. Elevated operating temperatures accelerate oil oxidation, reducing the total base number and increasing total acid number, which increases the need for regular condition monitoring.