CAPE TOWN, South Africa – Independent lubricant companies in Africa are missing the mark when it comes to original equipment manufacturer standards, but fostering alliances between the two may help local producers to meet the desired requirements, an industry insider said at the ICIS African Base Oils and Lubricants Conference held here.
Multinational companies supply roughly 61 percent, or 396,000 metric tons, of the Southern African Development Communitys lubricant demand, Ahlben Phillipus, chief operating officer of African Group Lubricants and Centlube, told attendees at the October conference. The remaining 252,000 metric tons of lube demand is met by local, independent producers, who often import base oils of varying quality standards.
Independents mostly invest in basic infrastructure and limited testing methods, Phillipus said, noting that latest original equipment manufacturer specifications require API Group II and Group II base oils, but the southern African lubricant market is still heavily invested in Group I.
He also identified poor quality base oils entering the Southern African region through the borders of South Africa, and a lack of blending procedures, assets and testing equipment as hurdles local lubricant players must overcome to meet original equipment manufacturer standards.
The global objectives of original equipment manufacturers are not different for the African lubricant market, Phillipus asserted. He believes these include increasing the performance life of machines and engines; optimizing operation costs; lowering maintenance costs; helping machines to obtain full design life; and eliminating performance problems caused by marginal quality oils.
He suggested original equipment manufacturers help educate customers on criteria like warranty requirements of OEMs, performance of lubricants and optimization requirements when selecting a lubricant.
For example, he emphasized that lubricants account for less than 1 percent of the cost for the typical maintenance for off-highway fleet vehicles. Hence, Phillipus said that OEMs should educate end users to understand that The performance of the lubricant influences several other cost factors so the pure lubricant cost should not be the selection criteria. Original equipment manufacturers need to assist in educating the end customer, he said.
Price is no longer as attractive once we are able to reveal the other contributing factors in the total cost of ownership, Phillipus argued. These contributing factors include spare part usage, maintenance, oil consumption, equipment life, environmental issues, unplanned downtime and lost production and revenue.
To achieve the best local lubricants, OEMs could help drive the market in Africa towards Group II oils by building alliances with local partners. The only way they can drive the market is to ensure that they have an alliance with a local partner who has influence over the local market, Phillipus said on the sidelines of the ICIS conference. You have to educate the blender to move to Group II.