Nigeria Welcomes More Synthetics


Independents and majors are competing for Nigerias growing synthetic lubricants market, as Lubcon International, Forte Oil and Epoxy Oilserv all launched synthetic brands in the past six months.

The Lubricants Producers Association of Nigeria (Lupan) estimated the countrys total lubricants demand at 582,000 metric tons in 2012, valued at about NGN680 billion (U.S. $4.2 billion). The association estimates the countrys installed indigenous lubricants plants have a combined capacity of 965,000 t/y.

Synthetic lubricants, which Lupan said comprised 5 percent of Nigerias lubricants market in 2012, are experiencing a surge in popularity.

In the last six months, both independents and majors launched various synthetic lubricant brands in Nigeria.

Lubcon International introduced Rugged Elite 5W-40, the countrys first locally manufactured synthetic. According to Lubcon International Managing Director Taiye Williams four liters of its 5W-40 Elite synthetic motor oil goes for NGN7,500 (about $40), while four liters of conventional SJ lube goes for NGN1,500 ($8).

Nigerian major Forte Oil followed with Synth 10,000. Olubayo Akinwunmi, Forte Oils head of retail and lubes marketing, emphasized that the company is investing in synthetic lubricants to satisfy the growing requirements of this market segment.

Epoxy Oilserv, an independent that distributes for Shell Lubricants in Nigeria, introduced two brands of Shell synthetic lubricants in January – Shell Helix Ultra and Shell Helix HX7.

According to industry sources, more independents are fine-tuning strategies to launch their own brands of synthetics to compete in Nigeria.

Lubcon said it is not threatened by the competition. We maintain that positive competition that induces better products and services is required to grow our economy, Lubcons Williams said. It is good for business. Most importantly, it is good for Nigerian consumers.

Some industry sources suggest a new automotive policy, approved in October 2013, may have spurred interest in synthetic lubricants. The policy aimed to stimulate local manufacture of cars, and phase out the importation of second-hand cars into Nigeria.

The new automotive policy could be a reason, said Williams. Many are concerned about the wave of substandard products finding their way into our market. This concern is no doubt driving the reaction of blenders, consumers and the government.

John Erinne, CEO of Matrix Petro-Chem Ltd., said that if the new auto policy eventually comes to force, it will help accelerate the shift towards high quality lubricants. He noted the growth in synthetics may reflect a global trend that has been delayed in Nigeria. Specialized demand for synlube is evidently growing gradually in the country, he said.

Olaniyi Okedairo, of consultancy Velvet Hill Nigeria Ltd., agreed that the new automotive policy is a big factor influencing the sudden surge in introduction of various synthetic lubricants in the country. He said the upsurge in synthetics could also be attributed to the fact that the mineral based lubes market in Nigeria is quite saturated with various brands, locally blended and imported.

Mostly what we have in Nigeria is mineral oil, but most of these newer engines require higher grades, tending towards synthetic, Okedairo told Lube Report. It means definitely there is going to be a shift. It also means that the kind of base oils that will be coming into Nigeria will go up from [API] Group I to Group II and III.

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