Cosan signed a partnership agreement with South Koreas S-Oil to distribute Ultra-S API Group III base oil in Brazil.
With this agreement, Cosan LE will offer a complete line of base oils within the Brazilian market, a spokesman for Cosan Lubrificantes e Especialidades S.A., part of Cosan Group told Lube Report. The company currently markets ExxonMobil Group I and II base stocks in Brazil.
It estimates that Group III represents around 6 percent of Brazils total base oil consumption in 2012.
A Kline Group analyst notes that Brazil is a rapidly growing country market with a modern and expanding car population which supports a large vehicle manufacturing base.
Given the demand for synthetics is strong and growing, it makes sense for Cosan to secure a supply of Group III base stock, according to George Morvey, a U.S.-based project manager with Klines Petroleum and Energy Practice.
He noted that Group II demand will increase significantly when Petrobras, the state-owned oil company, starts its Group II production in 2016, supported by the rerefining efforts of companies such as Lwart Lubrificantes. The quality of passenger car motor oil is improving, and Cosan is setting itself up to supply the expected demand, Morvey added.
Cosan was created in 2008 when it acquired the production assets and brand rights for Mobil in Brazil from ExxonMobil.
In 2011, Cosan LE began distributing base oil from ExxonMobil in Brazil. It also purchased ExxonMobils lubricant distribution business in Bolivia, Paraguay and Uruguay, becoming the exclusive distributor of Mobil products in those countries.