J.V. Shuffle Roils German Market


Germanys lubricant market appears poised for a shake-up after Shell and RWE-DEA won partial approval for a German partnership, and Fuchs Petrolub announced the consequent end of its joint venture with DEA.

Royal Dutch/Shell announced late last month that the German Cartel Office has approved the oil products part of the proposed downstream joint venture between Deutsche Shell GmbH and RWE-DEA, a subsidiary of RWE AG and one of Germanys largest oil companies.

Fuchs announced the same week that, in view of that prospective hook-up, DEA has agreed to withdraw from Fuchs DEA Schmierstoffe. As a result, Fuchs will become sole owner of the German lubes business, which will be renamed Fuchs Europe Schmierstoffe and which has annual sales of Euro 250 million (US$226 million).

The formation of Shell and DEA Oil GmbH is still subject to the European Commission approving petrochemicals aspects of the joint venture. DEAs withdrawal from its three-year-old joint venture with Fuchs is subject to completion of the joint venture with Shell, as well as approval by German anti-trust regulators.

Shell and DEA Oil is driven mostly by fuels and refining concerns, as it would claim 20 percent of Germanys gasoline market. But by forming a network of more than 3,000 service stations, it would also offer an extensive outlet for automotive lubricants. Shell is already one of the two largest lubricant producers in the nation. Germany is the largest lube market in Europe, with demand totaling 1.1 million metric tons (1.2 million tons) in 2000, according to EuropaLub.

DEA brings little lubricants activity to its new partnership, having contributed its lubes business at the formation of Fuchs DEA. Under the terms of its withdrawal, Fuchs Europe will retain DEAs Hamburg-Grasbrook Division, which will continue producing and supplying lubes for DEA.

Fuchs Petrolub AG, which is based in Mannheim, Germany, is also one of that countrys largest lubricant producers, with annual worldwide revenues of approximately $1 billion. After assuming sole ownership of the former joint venture, it said, it will more closely integrate the business with its operations in other European countries.

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