CAPE TOWN, South Africa - African rerefiners agree that overcoming skeptical public perception of their rerefined base oils is a significant hurdle to growth. However, they debated about other factors - such as working with multinational companies and choosing the best production process - during a panel discussion at the ICIS African Base Oils and Lubricants Conference held here.
One of the biggest challenges facing rerefined [base] oil has to do with consumers perception that it is of inferior quality and substandard. The perception of rerefined oils has become a challenge for producers to expand and chart new courses, said Mduduzi Khanyile, national sales manager of Rossburgh, South Africa-based FFS Refiners.
Public awareness of rerefined lubricants is minimal because consumers are not well-educated on the subject, said Bubele Nyiba, CEO of Rose Foundation, a Cape Town-based nonprofit organization that promotes oil recycling.The industry has not done much about educating consumers about rerefined products, therefore, it is way off to expect much public awareness about rerefined oil, Nyiba explained to attendees at the meeting on Oct. 30.
However, Rami Al-Kinanny, general manager of Egypts Hitech Oils and Grease, believed this perception of rerefined products in Africa is not solely held by the public. He claimed that some blenders are also skeptical of rerefined base oils and think of them as substandard.
Nyiba offered a different perspective, noting that while oil majors will tolerate rerefined oil, they wont necessarily support it because they produce their own base oil. This puts multinational companies in direct competition with rerefiners, according to Nyiba.
Additionally, Al-Kinanny said that multinationals would gladly purchase rerefined oils, as long as they meet the expected quality. He added that his company supplies multinationals in Egypt with various grades of rerefined base oil, but that the process to use them in their lubricant formulations took time.
Many tests were done on the finished products formulated with [Hitechs] oils to ensure that [the products] met their performance levels. Once that process was successfully done, these multinationals started procuring our oils, Al-Kinanny stated. He did note, however, that few rerefiners in the region can produce rerefined base oils of a quality that meets the requirements and expectations of multinationals.
A major challenge rerefiners face lies in finding the best rerefining process to use. For the most part, the panelists agreed that catalytic hydrogenation is the best technology for the production of rerefined oils. Hydrogenation fixes the hydrocarbon molecular structure by saturating the double bonds in the used lube to recreate a stable molecular structure identical to the one in virgin base oils, explained Khanyile.
Al-Kinanny disagreed. While he believed hydrogen treatment produces the best rerefined oils that could meet or exceed API Group II virgin base oils, he emphasized the number of variables that need to be considered before selecting the best process for a particular company.
If I am [going] to start a business in a country or region where I can only procure 20 kilotons to 30 kilotons annually, then hydrogen treatment will not be cost effective and, therefore, will not be my first choice, Al-Kinanny said.
Khanyile agreed, claiming that profitability is a function of cost of raw material - used lubricants - the cost of production and the selling price of the finished product.
One downside all of the panelists highlighted is the lack of either an original equipment manufacturer approval or regulatory standards for rerefined base oils.
Khanyile, however, did note that the American Petroleum Institute is guiding standards for rerefined base oils because you are competing with someone who produces to the API standard. Rerefined base oil produced in Africa meets the API specification and, at times exceeds, one category or another API specification.
Al-Kinanny added that in addition to Hitechs plant in Egypt, which has been producing base oils marketed as Group I+ for the past eight years, some rerefiners in Tunisia and South Africa do meet Group I specifications.
The panelists all agreed that public perception remains the largest hurdle African rerefiners must overcome to grow in the region, a problem they hope to solve through aggressive education practices. Additionally, Nyiba said that the prospect of rerefining in the African continent will be greater if there is complementary growth on the supply side of the industry.