Brazil’s Lube Market Sizzles


Brazil’s lubricants market saw 10 percent growth in consumption rates for 2004, outpacing the economic juggernauts of China and India for the year, says an upcoming study from market research firm Kline & Company. Still, the market in Brazil is likely to remain highly competitive, it predicts, and lube marketers should not expect significant growth in profits.

“Ten percent growth in the lubricants industry is virtually unheard of,” pointed out Geeta Agashe, director of Kline’s petroleumand energy practice. Smaller but still-healthy growth rates of 3 to 4 percent a year are expected in Brazil for the next decade as well, the Little Falls, N.J., consultants added.

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Brazil is the largest economy in South America, with high exports to neighboring countries. The nation saw a 32 percent growth in exports as a whole for 2004, according to the Institute of Economic Research in Brazil. Industrial activity has also increased significantly across the board, and the vehicle population has increased substantially. Much of the growth is due to the economic recovery Brazil is experiencing after a slump beginning in 2001 and 2002.

This combination of factors has led to a bumper year for lubricant consumption. Overall, sales of lubricants in Brazil topped U.S. $1.2 billion in 2004, Kline’s study says.

“Lubricant consumption is not expected to continue growing at 10 percent, but the market is back on a growth track,” Agashe says. However, strong competition is making Brazil’s lubricants market a difficult place to show profits. Both domestic and multinational companies have a significant presence, including Chevron, Shell, ExxonMobil, Fuchs and the Brazilian companies Petrobras and Ipiranga.

Brazils lube market, at 1.2 million tons a year,accounts for about 55 percent of South Americas combined total demand, according to reports from Petrobras, the Brazilian national oil company. Now a publicly traded company, Petrobras still enjoys the home-court advantage of its heritage. The company owns 98 percent of Brazil’s refining capacity, including the country’s three base oil plants, and claims to holds 18 percent of the country’s lube market. However, no single company is dominant in a majority of Brazil’s market sectors, Kline’s analysis shows.

For example, when it comes to automotive lubricants Chevron edges out Petrobras, while the latter leads in the industrial lubricants market. Furthermore, Petrobras has grown substantially and is looking to international markets to feed its growth. The company already exports lubricants to Argentina, Ecuador and Bolivia, and shows interest in the markets of more developed nations.

“The market in Brazil is highly competitive because it is fragmented with several companies fighting for the top position,” says Bill Downey, Kline vice president. He suggests that niches in the mainstream lubes market will offer opportunities for good profits, “with the right promotion and channel strategy.”

The data on Brazil and more is included in “Competitive Intelligence for the Global Lubricants Industry, 2004-2014,” Kline’s third edition of its multiclient study. Visit for more information.

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