Royal Dutch Shells Russian subsidiary has started to export lubricants made at its blending plant in Torzhok, the company told Lube Report.
So far, we produced lubes only for the Russian market, but recently we started to ship products to Belarus, said William Kozik, general director of Shell Neft. In 2016 we plan to expand our sales to Kazakhstan, too.
Courtesy of Shell
Storage tanks at Shell’s blending plant in Torzhok, Russia.
The 180,000 tons per year blending plant in Torzhok is one of the Shells largest in the region. Located 250 kilometers west of Moscow, it started to operate in 2012. It now produces around 1,000 types of automotive and industrial lubricants.
However, the company is not ready yet to ship products to Europe or to any other destination outside the customs union that consists of Russia, Belarus and Kazakhstan. Poland is one of the most promising markets, but we cannot sell products [from Torzhok] there because high export duties we have to pay make such business unprofitable, Kozik said.
He estimated that Russias dire economic problems caused the countrys lubricant market to shrink by around 10 percent in 2015. Of course, the negative market trend influenced our sales, too, Kozik said. In contrast with our competitors in Russia, our main niche is the premium lubricant market, and we partner with original equipment manufacturers such as BMW, Volkswagen, Mercedes-Benz or Suzuki, so the crisis is not critical for us. He added that Shells share of Russias finished lubricant market is growing.
Russian base oil and lubricants demand fell from 1.7 million metric tons in 2013 to around 1.5 million tons in 2014, according to InfoTek, a Moscow-based consultancy.
Shell is the worlds largest lubricant marketer. In 2014 it held 12 percent of the global finished lubricant market, according to Kline & Co. consultancy.