Shell’s United States lubricants business and Whitmore Manufacturing LLC will form a joint venture to provide industrial products and services to the North America rail and U.S. mining sectors, under an agreement announced Jan. 22.
Whitmore expects to gain wider distribution of its products in the Americas through Shell’s distribution channels and a boost to its Texas manufacturing facility, while Shell said the joint venture will assist its efforts in the business-to-business lubricants market.
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The 50-50 joint venture will be named Shell & Whitmore Reliability Solutions. Whitmore is a wholly owned subsidiary of Dallas, Texas-based CSW Industrials. Shell’s U.S. lubricants business includes Pennzoil-Quaker State Co., doing business as Sopus Products, a wholly owned subsidiary of Shell Oil Co.
The joint venture will market, distribute and sell lubricants, greases, coolants, reliability products and related industrial services. The companies said it will have an integrated product portfolio that meets the unique needs of companies engaged in North America Class I, II and III rail, excluding municipal transit systems; and U.S. mining, excluding quarries. In the United States, railroads are designated as Class I, II, or III, according to railroad revenues.
Under the manufacturing agreement with Whitmore, the joint venture’s production assets will be co-located at Whitmore’s facility in Rockwall, Texas, and will be operated by Whitmore. “This structure is expected to optimize Whitmore’s existing manufacturing capacity through increased production output to be contributed by both Shell and Whitmore, and to position the JV for future growth,” the companies said.
The companies’ collaboration is also expected to expand the commercial relationship between Whitmore and Shell, widening the reach of Whitmore’s reliability products through Shell’s extensive distribution channels through the Americas, excluding the joint venture’s business sectors.
“Today’s announcement represents a first step toward offering a comprehensive portfolio of products and solutions to rail and mining customers,” CSW Industrials Chairman, President and CEO Joseph Ames said in a press release. “When Shell first approached us about this opportunity to form a partnership, our team quickly realized the value in an expanded commercial relationship with a world class organization to drive accretive growth for shareholders, promote proprietary products and technologies to customers, and increase capacity utilization at Whitmore’s existing manufacturing facility.”
Machteld de Hann, president of Shell Lubricants Americas, expressed optimism about the future of the business-to-business sector. “The resilient B2B sectors are key pillars for the future of Shell Lubricants, where we see a lot of opportunity for growth to support the market,” de Hann said in the press release. “Partnering with Whitmore – a leading provider of reliability products, high-performance greases, friction modifiers and rail products – in creating this JV helps us to progress towards the execution of this strategy.”
Whitmore and Shell sales and technical professionals with extensive experience in the rail and mining sectors will staff the joint venture. The JV will supply both Shell and Whitmore products.
“We look forward to strengthening our partnership with Shell, while supporting the effort with our decades of experience in the production of small-batch customized products for specialized applications,” Armes said.
The joint venture is subject to closing conditions and expected to begin operations in the first half of this year. Each company’s representatives will provide separate communications to respective in-scope customers with key information regarding the potential transition of business to the JV.