Bangladesh Rerefining Stuck in Status Quo


With no domestic virgin base oil production and an abundance of recyclable used oil, Bangladesh could pose opportunities for rerefiners. But players say the sector will likely remain paltry without better technology and more government support.

Bangladesh could support more rerefining based on the size of its lubricant market. The country consumes an estimated 75,000 [metric] tons per year of lubricants and generates 40,000 t/y to 45,000 t/y of used oil that is available for collection and recycling, said Mohammed Yousuf, managing director of Lub-rref (Bangladesh) Ltd.

The absence in this country of virgin base oil capacity could promote a higher number of rerefineries, but in reality it is not so, said Min Oils Ltd. Managing Director Mahmud Arefin.

The country currently has a half-dozen facilities that recycle or rerefine used oils, but the sophistication of their operations varies significantly, Arefin added. With rerefining being a technical and capital-intensive field, there are only a limited number of rerefiners in Bangladesh. The process used for rerefining varies by company and is split evenly between acid clay processing and the more advanced vacuum distillation technology, according to Yousuf.

The Bangladeshi government requires rerefineries to have modern equipment including high-vacuum distillation units, a fully equipped lab to provide necessary testing, a skilled staff that includes a chemist and a production manager, and to comply with domestic pollution and safety regulations.

Bangladesh has six or seven companies that process used lubes, including Min Oils, Lub-rref, Khulna Allied, Asian Oils Ltd., and Al-Falah Oil Ltd.

With capacity to produce 7,000 t/y to 9,000 t/y of base oils each, Min and Lub-rref claim to be the largest. Min also said it has the countrys most modern rerefining technology at its Dhaka facility. Although others are advancing, currently Min Oils is the only refinery to use the latest technologies in the production process and their output is of the highest grade comparable to virgin [API] Group I base stocks in terms of specifications, Arefin said.

Authorities need to implement stricter enforcement to crack down on subpar operations, he added. There is potential for growth for the existing players in the market in terms of more advanced technology and product marketing, but in order for this to happen, a stricter monitoring regime will need to continue.

He also noted that the market needs other policies to incentivize and support rerefiners. Developmental programs like subsidies and other support mechanisms from the government would help this sector be more sustainable.

Furthermore, its tough for rerefiners finished lubricants to compete with customers preferred brands, Arefin concluded. The presence of large multinational finished lubricant marketers such as Mobil, Castrol, Total and Fuchs also limits growth in the rerefining sector as the market is already very competitive and lubricants made with rerefined or recycled base stocks have lower popularity than the established multinational brands.

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