Founded in 2002, Penthol has grown to become a leading player in the API Group I, Group II and Group III base oil markets supplying North America, Turkey, South Africa and Europe.
In this article, Lubes’n’Greases talks to Andrey Savin, Global Business Development Manager at Penthol, about continued growth, becoming a trusted brand and breaking into new markets of paraffinic and naphthenic base oils.
Q) How has Penthol been able to navigate the difficult market conditions in Europe this past year, given the supply chain disruption and widespread uncertainty?
A) The base oils market has been extremely challenging across all regions this year with everyone in the industry having to deal with supply chain issues and sanctions due to the ongoing Russia-Ukraine conflict limiting product in the region.
We recognize the market is proving extremely volatile right now and faced with these pressures, Penthol has been determined to find solutions to ensure minimal impact for our customers. We’re committed to supporting our customers whether they work on a term basis or choose to buy on a spot basis.
Despite the prevailing market conditions, we’ve had a fantastic year and been able to secure several term contracts with suppliers and refineries and continue to grow our market share.
Q) How have Penthol’s successes in recent years positioned it as a globally-recognized distributor of base oils and solvents.
A) A multi-generational family-owned business, Penthol has become a trusted base oils supplier supported by an extensive logistics network, experienced technical and customer service teams and excellent financing capabilities – including open account sales, local currencies used in the trade, and full customs clearance of the goods.
Over the years, we’ve been able to significantly increase our presence worldwide to become a source of high quality product. Since 2016, Penthol has been the exclusive distributor of Group III base oils of Abu Dhabi National Oil Company (ADNOC) across North America. Our successes quickly saw the business grow its footprint to also become a recognized brand in Turkey and South Africa.
In early 2023, following the banning of Russian material entering Europe, Penthol recognized the need for additional Group I base oils in the region and seized the opportunity to increase market share with supply from European and Middle Eastern refineries.
The business is now active in key growth markets including Benelux, Germany, France, Italy, Bulgaria, Romania, Hungary, Serbia and Greece.
An established distributor of Group I base oils to the European and African markets, we supply product from dedicated storage tanks at our Rotterdam terminal in the Netherlands, as well as Durban in South Africa.
Q) Looking ahead, what are your expectations and plans for 2024?
A) After a busy 2023 developing relationships with customers and completing technical approvals, we’re looking at furthering cooperation with them through new long-term contracts in the year ahead.
Whether large buyers or small to medium-sized customers, Penthol is seen as a reliable and trusted supplier with a proven track record. Thanks to our infrastructure, technical support, and expertise, we’re able to compete with the majors and offer the excellent levels of service the lube blenders and chemical companies expect.
Penthol will continue to focus on Group I in European markets and increasing market penetration. As part of a long-term strategy, the business is also looking to enter the naphthenic base oils market by late 2023 or early 2024. Again, its aim is to supply its customers with quality product, door-to-door logistics, and flexible financing.
Boosted by robust GDP growth, we’re also anticipating heightened demand for lubricants across Africa – another of our key markets. The mining, construction, and power generation sectors all saw particularly strong growth in 2023 and we expect this to continue into 2024.
In addition to the supply of Group I in South Africa, we hope to see increased uptake in Group III as the market becomes more sophisticated and demand for these types of base oils increases. With more new modern vehicles coming onto the roads, there will clearly be a need for these higher specification lubricants. Penthol has a strong hub for base oils and hydrocarbon solvents in Durban and we will increase storage capacity for these in 2024, thereby ensuring that we meet the growing needs of our customers moving forward.
Equally, the Southeast Asia market represents another fantastic opportunity for us and we hope to grow our presence here as well. This is a region that needs strong distributors with strong supply sources – and that’s exactly what we offer.
To find out more about Penthol, visit our website or contact us directly at baseoils@penthol.com.