Lukoils output of base oils slumped 28.7 percent in 2015 and its sales of finished lubricants dipped 1.8 percent, according to its annual report, but the company claimed to have made progress on its strategy of focusing on higher-margin products instead of overall volumes.
Lukoil kept working on increasing the share of high value-added products and streamlining low-margin segments, the company said in its 2015 report. Last year we succeeded to increase the sales of high-margin lubricants produced in Russia by 28 percent. In 2015, the total output of these products across the companys domestic and overseas operations rose by 17 percent.
The Moscow-based company did not disclose financial performance of its lubricant business. Despite the drop in volumes, it claimed to still be the largest combined supplier of base oils and finished lubes to the Russian market, but it did not disclose its rank or market share for those categories individually.
Lukoil produced 386,000 metric tons of base oils in 2015, down from 541,000 tons in 2014. Its finished lube production slid from 553,000 tons in 2014 to 543,000 tons last year.
The company said it remains particularly focused on developing its product mix in line with market demand. In 2015, it developed 52 new types of lubricants and reformulated 57 products, as its portfolio of finished lubes swelled to 400 items.
Lukoils sales of synthetic lubricants for passenger cars doubled in 2015, and the company got over 150 new approvals from leading manufacturers of machinery and equipment, including MAN, Porsche, Mercedes, BMW and others, Lukoil said.
The companys other 2015 results include the launch of its Genesis-branded products in the Russian market and the completion of a reservoir park on the Danube River in Vienna, Austria, which it considers to be its new European hub for the marketing of base oils produced at its Volgograd refinery.
Lukoils share in the global market of marine lubricants grew from 5 percent in 2014 to 9.5 percent in 2015. [Lukoil] made great breakthroughs in the maritime shipping industry, capturing a significant market share of the global marine lubes market, the company said. Thanks to our innovative approach, we developed a new mix of biodegradable synthetic lubricants meeting the strictest requirements and up-to-date safety standards, and iCOlube, an intelligent cylinder oil lubrication system.
In 2015, the company won the Technical Innovation Award at the annual SeaTrade Maritime Awards.
The companys priorities in 2016 include continued growth of sales volumes of value-added products and streamlining low-margin segments. It also intends to take further advantage of the state-sponsored import substitution program, which encourages domestic companies to use domestic suppliers and to expand geographically. It aims to add about 20 products to its finished lubricants portfolio. Lukoil sells its products in 103 countries worldwide.