In a bid to compete with imports, Russia’s biggest lubricants marketer LLK-International recently made quite a few supply contracts with the country’s largest metallurgical and oil companies.
LLK won a supply tender for Magnitogorsk Iron and Steel Works (MMK), one of the country’s largest iron and steel producers, the company said on Monday. LLK-International is the lubricants arm of oil major Lukoil.
Under the one-year contract that began June 1, the company will deliver 1,200 metric tons of oils to MMK for industrial and automotive hydraulic systems, Lukoil said in a press release. LLK also will supply oils for steam and gas turbines, industrial recirculation oils for rolling mills and oils for heavy loaded industrial gears.
“Winning this tender means that Lukoil successfully continues its lubes business development strategy that includes import substitution,” said Maxim Donde, LLK’s general director. “Domestic industrial consumers are turning to Russian-made products that have same quality as their appropriate foreign-made counterparts.”
Developing an assortment of high-quality functional oils is the focus of Lukoil’s lubricants development business strategy, the company said. It already holds a 40 percent share of Russia’s lubricants market, and in 2011 produced 1.3 million tons of base oils and lubricants.
In the last couple of years, the company has won over a number of industrial behemoths as customers, such as Norilsk-based Norilsk Nickel, a nickel and palladium mining and smelting company; Cherepovets-based Severstal, the largest steel producer in Russia; Kuzbassrazrezugol, the country’s second-largest steam coal producer from Kemerovo; and Surgutneftegas, the oil major located in Surgut. Lukoils other big industrial customers are Moscow-based Metalloinvest, one of the world’s largest iron ore and hot-briquetted iron producers; Moscow-based Mechel, one of Russia’s leading mining and metallurgical companies; Taganrog-based Tagmet, Russia’s largest steel pipe producer; and IDFC Holding power company.
In May, LLK sold a record 13,000 tons of finished industrial oils of its Lukoil and Teboil brands, beating its previous highest monthly record of 12,300 tons in June, the company said last month. LLK claims a 45 percent share of Russia’s industrial lubricants market.
The company markets more than 500 lube and grease products. In 2011 LLK sold 220,000 tons of packaged lubricants, or 4.5 percent more than in 2010. It sells finished products in 35 countries, and last year its finished lube exports soared 23 percent compared to the previous year. LLK’s marine oils saw spectacular growth in 2011, when it sold 34,000 tons of marine oils, or 84 percent more compared to the previous year.