Indias Grease Market: Poised for Upgrade?

CHENNAI, India - The Indian grease market is the worlds third-largest and is growing approximately 2 percent per year, according to an analyst.

It may also be on the verge of a significant shift in product quality, according to an industry insider attending a conference here last week.

It has been a bit slow to keep up with advances that weve seen in other markets, Paul Grives, global services and greases marketing manager for ExxonMobil Fuels & Lubricants, said Thursday during an interview at the annual Lubricating Grease Conference organized by the India chapter of the United States-based National Lubricating Grease Institute.

The chapters secretary, T. Singh, told the conference that India and the rest of the South Asian sub-continent consumed at least 110,000 metric tons of grease in 2013, the most recent year for which NLGI has released estimates. That would rank India well behind China and North America but ahead of Japan and Europes biggest markets.

Several attendees cited Kline & Co. consultancy as the most reliable estimator of grease demand and its rate of growth in India. The firm, which is based in the United States, calculates that grease consumption in India is growing at an annual rate of 2 percent, considered healthy increases for a segment that traditionally lags even the modest growth rates of the global lubes industry.

The growth may be welcome, but several attendees said that significant upgrades in quality would be even more important. Over the past decade or two, many grease markets have shifted from simple lithium- and calcium-soap-based thickeners to complex products made with complex lithium or aluminum thickeners that allow higher dropping points and other performance benefits. Other new technologies, such as poly urea greases, have also taken root.

According to an annual survey conducted by NLGI, by 2013, only 58 percent of the grease consumed globally was made with simple lithium-soap thickeners. The shares for lithium complex thickeners and poly urea had risen to 18 percent and 5 percent, respectively, while calcium varieties were down to 8 percent.

But simple lithium continues to dominate the South Asian sub-continent market, accounting for 85 percent in 2013, according to NLGI. Just 5 percent of the products consumed were made with lithium complex thickeners, and presence of poly urea products was negligible.

Officials from ExxonMobil Fuels & Lubricants told Lube Report Asia that there are several factors for the Indian markets failure to keep pace, including an over-riding emphasis on price by end users and a relative lack of the type of grease manufacturing equipment needed to efficiently produce grease with complex thickening systems.

Still, the ExxonMobil officials predicted that India will start to catch up soon.

We think the trend toward higher technology greases is going to begin now, Grives said. In the next five to 10 years theres going to be a strong increase in the use of lithium complex thickened grease. I also think calcium [thickeners] are going to go away.

Grives and Shankar Karnik, ExxonMobils SHC brand manager in Asia-Pacific, said several developments have prepared the market to shift. One is the influx in a wide variety of industries of modern equipment from foreign original equipment manufacturers that recommend or require use of higher quality greases. In addition, more Indian equipment makers are entering foreign markets that expect performance that requires better greases.

Its about India staking its place in the global economy, Karnik said.

NLGIs survey is meant to provide a more accurate estimate of the size of the sub-continents market and demand changes from year to year. Singh said the usefulness of the surveys overall demand estimate flagged in 2013 because of a drop in producer participation. Only 13 of 22 NLGI members in the sub-continental market provided sales figures for 2013 - down significantly from normal participation rates. Those 13 members reported combined sales of 87,000 tons. But Singh said one member that did not participate sells approximately 9,000 tons per year and that non-members sell an estimated 20,000 t/y.

So the actual size is at least 110,000 tons, he said. Singh said the Indian chapter plans to take a larger role in the Indian portion of the survey in an effort to boost participation.