Association Offers Pocketbook Programs


When the Tianjin Lubes and Greases Association formed just over a year ago, officials decided that traditional programs of industrial associations – training programs, serving as an information clearinghouse and promoting member companies – is no longer enough to attract members.

Instead, Li Zhihe, the head of the organization, has tried to develop programs that have larger and more direct impacts on member company bottom lines.

I figured that companies all want to make money, so why not use our resources to help them? Li told Lube Report on a recent sunny Friday at the associations offices in Tianjin.

Bearing this goal in mind, the semi government-backed organization has made itself a group procurement platform. It buys a wide variety of materials used by lubricant blenders – everything from base oils to additives, plastic bottles – even protective equipment like gloves that workers wear. Then it offers these materials to member companies, which pay less than they would if they purchased on their own smaller scale.

We buy large quantity, so we can enjoy a discount that no individual company can have, cutting costs for our members, said Li, who is elected to his position by member companies.

So far, most base oils are API Group II oils from South Korean suppliers, but Li aims to offer more choices to members have room for price negotiations. In November he plans to lead a member group to Abu Dhabi, United Arab Emirates, to visit the Group III refiner Adnoc, which is seeking to supply base oils to more companies overseas.

If our members are happy with the quality, we will have a new high quality base oil supplier from the Middle East, Li said.

Tianjin is located 130 kilometers southeast of Beijing, on Bohai Bay, which is part of the Yellow Sea. Tianjin is one of the 10 largest cities in China and has one of the highest concentrations of lubricant manufacturers. The Tianjin association has approximately 100 members, mostly lube blenders but also suppliers of materials such as base stocks and lubricant additives.

As China works to fix its debt-laden banking system, it is increasingly difficult for small and medium-sized private, domestic companies, which describes most Chinese lubricant blenders, to get loans from banks. Recognizing this, Li saw another role for the association – to serve as a loan guarantor.

Our government-backed identity makes it easier for us to get loans for our members, Li said. He added there will be growing demand for loans because many blenders are transforming old factories into energy-efficient, highly automated facilities under the national governments Made in China 2025 initiative.

The Tianjin association also works to initiate interactions with other regional associations. China does not have a national lube association, but it does have several regional associations serving hubs of lubricant blenders, including the Shanghai Lubricant Trade Association serving members in the Yangtze river delta zone and Zibo-based Shandong Lubricant Industry Association, which serves companies in Shandong province.

Li recently led a member group to Guangzhou, where the newly formed Guangdong Lubricant Industry Association is located. The trip included little facility visiting or sight-seeing, but many discussions and lots of information exchange with members of the Guangdong association, which are mostly located in South China.

Through talking to local counterparts, we want to know more about the regional markets and to see if there is any potential for partnerships, Li said. Li claimed Tianjin is the only Chinese lube association offering such programs to its members.

Hopefully, we will be able to attract companies from other regions, he said.

Photo: Tianjin Lubes and Greases Association

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