Clean Harbors announced plans to create a division dedicated to finished lubricants within its rerefining and recycling segment, and to appoint Jerry Correll as the divisions head.
In yesterdays strategic review announcement, Norwell, Mass.-based Clean Harbors said that the new business will accelerate its shift in focus to blended products, which has been its priority since acquiring used oil recycler and rerefiner Safety-Kleen in December 2012.
We hope to realize higher returns from this business, further differentiate [subsidiary Safety-Kleens] EcoPower brand, increase the sustainability of our rerefining profits and distance ourselves from the inherent volatility of the base oil market, said Alan McKim, Clean Harbors chairman and CEO.
The news follows the companys announcement last month that it will no longer pay to collect used oil in a downbeat base oil market. With its acquisition of Safety-Kleen in 2012 and Evergreen Oil at the end of 2013, Clean Harbors claims that it is the nations largest collector of used oil, at around 200 million gallons per year.
Near-term, [Correll] and his newly reorganized team also will work to protect and expand our margins by implementing a number of strategies, such as the recent zero-pay rate structure change for its purchase of used engine and industrial oils, and by lowering overall transportation costs, McKim continued. [Correll] will oversee the transition of recycling and rerefining from a business that produces a majority of base oil to one that manufactures many products from our recycling and rerefining process.
Correll told Lube Report that Clean Harbors wants to reduce its reliance on base stock sales simply because it doesnt have any control over the pricing associated with base stocks. We want to try to push more of our [rerefined base stock] production capacity into passenger car engine oils, heavy-duty engine oils, hydraulic fluids, etc., and by doing so, well be reducing our reliance on [base stock] sales into the marketplace.
Clean Harbors – under its subsidiary Safety-Kleen – operates a fully-automated East Chicago, Indiana, blending facility with capacity to produce approximately 20 million gallons per year of finished lubricants. At the same site it also operates a base oil rerefinery with 4,200 barrels per day API Group II and 800 b/d Group I capacity. It also has blending operations alongside its Breslau, Ontario rerefinery, which has a capacity of 1,200 b/d Group II and 700 b/d Group I capacity. The companies also have a 1,150 b/d Group II rerefinery in Newark, Calif.
Since Clean Harbors acquisition of Safety-Kleens Chemical Services Division in 2002, Correll has held various management positions at Clean Harbors. He was named president of Safety-Kleen in April 2013.