Val Pakis, Lubrizols vice president for driveline and industrial additives, said Chemtool provides a service to its customers doing things some customers no longer want to do, which is a model familiar to Lubrizol.

We have this custom solutions model here at Lubrizol where we blend a lot of finished lubricants for customers who for whatever reason dont want to do that internally, Pakis told Lube Report. And over the years, both Chemtool and Lubrizol have shared a similar customer base, and many of our customers have decided to outsource their grease manufacturing, and they outsource it to Chemtool. So its a private label business, where Chemtool has been providing a service to our mutual customers, and that fits exactly what Lubrizol wants to do. Theyre established as a primary private label grease manufacturer in North America.

Its not really in competition with our existing customer base at all, Pakis continued. Its a niche – private label grease manufacturing – to provide a service to our existing customers.

Pakis lauded Chemtool for its tremendous growth over the years. Were hoping that from our perspective, the synergy is that we have a global footprint, he said. Its really tough for a company the size of Chemtool to follow their global customers around the world providing the level of service the customers demand, and its something Lubrizol does well. Secondly, from a technology perspective, we are good at what we do with additives, and hopefully there will be some ability to improve the quality of the grease products on a worldwide basis.

While Chemtool has a small presence in both Europe and China, Pakis said Lubrizol will be able to help it expand its reach to a much wider geographic market. To be able to satisfy a global major and to do that effectively these days is not easy for a smaller company, or a company the size of Chemtool, he pointed out. Lubrizol has affiliates, we have manufacturing facilities in 17 countries around the world, and we can leverage that not necessarily just to expand the grease business, but to expand all of Chemtools business globally and do it in an effective way. Were just scratching the surface on all this.

He emphasized that Chemtool, as part of Lubrizols industrial business, would remain an independent company, and will be led by Dean Athans, Jim Athans, and Dave Klesmith. Were going to run this as an arms length independent company – we couldnt do it without them, Pakis said.

Theyve been a supplier to me for almost 50 years, Chemtool Chairman James Athans told Lube Report. Lubrizol is global, and we were, but not like they were. Theyre going to help this company grow. Its going to be independent, and keep the name. I have confidence they will do that because with all their acquisitions theyve kept the companies independent. I couldnt have found anyone that Id rather sell to than this company.

Industry contacts sounded a more cautious note about the acquisition.

From a customer standpoint, and from their standpoint, this situation creates a real dilemma for Lubrizol and for the customers, Steve Milam, president and CEO of Lubricating Specialties, told Lube Report. Its only through time that were going to be able to sort out what it means. Were just going to have to be willing to give it some time. It is a real dilemma when you compete with your customers.

Milam did compliment Lubrizol for calling and talking to its customers prior to issuing the announcement about acquiring Chemtool.

Chuck Coe, president and principal consultant for Grease Technology Solutions LLC, said some grease manufacturers that do business with Lubrizol may see cause for concern from a technology standpoint.

It would depend a lot on your relationship with your additive suppliers, Coe told Lube Report. If youre simply buying additives from Lubrizol, its probably less of a concern. If youve had cooperative development work with Lubrizol, I would think it would be a higher level of concern.

He said another possible concern other grease manufacturers who purchase technology from Lubrizol might have is whether the additives maker would reserve its best technology for its own grease company. As they do new developments for their Chemtool greases, are they going to make the newest technology as readily available to the general marketplace since they now own a grease manufacturer?

According to its web site, Chemtool has facilities in eight locations: Rockton, Ill., Crystal Lake, Ill., Milan, Mich., Tehachapi, Calif., Elkhorn, Wis., Diegem, Belgium and Shanghai, China. The company is headquartered in Rockton.

In 1992, Chemtool acquired Metalcote, a specialty, private label manufacturer of lubricating greases based in Minneapolis, Minn. The Metalcote division manufactures private label greases and lubricants for a majority of the major oil companies, agricultural and consumer markets.

In July 2006, the company announced it had installed what it believed to be the worlds largest grease kettle, a reactor with capacity of 130,000 pounds. Chemtool at the time said most of its sales growth had come from contracts to blend volumes sold under other companies labels.

Lubrizol, headquartered in Wickliffe, Ohio, was itself acquired this year by Berkshire Hathaway for $9.7 billion.