Intertek: New Force in Engine Testing

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Intertek Caleb Bretts share of the lubricant testing market will grow significantly when its $34.5 million purchase of PerkinElmers Automotive Research Laboratory closes tomorrow. The Automotive Research Laboratory conducts an estimated 30 percent of all approval testing for API engine oils.In August, Intertek Caleb Brett acquired PARC, which tests automotive lubricants at the research and development stage.

Houston-based Intertek Caleb Brett, a division of Intertek Group plc, last week announced its agreement with PerkinElmers Fluid Sciences Division to buy the assets, contracts, technology and intellectual property of the Automotive Research Laboratory, located on an 18-acre site in San Antonio, Texas. ARL employs 144 people and is expected to have annual revenue in 2005 of about $24 million.

Automotive Research has been in the lubricant testing business for over 50 years, General Manager John Glaser told Lube Report. We are a leader in the crankcase lubricant test areas, both for passenger car motor oils and heavy-duty diesel motor oils, conducting an estimated 30 percent of all approval testing for the API engine oil categories.

The slate ofengine sequencetests conducted at ARL includes theIIIF, IIIG, VG, IVA, VIII, Ball Rust Test, VIB, 1K, 1N, 1P, 1R, 1M-PC and C13, T8, T10, T11 and T12, ISM and ISB, in more than 40 dynamometer test stands, Glaser said. We are one of two labs approved to conduct testing for the Dexron, Mercon and Allison C4 transmission fluid categories, he added. ARL runs over 20,000 tests per month.

Lubricant testing is very cyclical in terms of test volumes, with high activity shortly following the launch of a new category, and a maintenance activity level within six to nine months after the launch of a new category, Glaser explained. We are on the verge of the PC-10 category being launched, so we are expecting higher volumes in 2006 than we experienced in 2005. We expect the market to be slower in 2007, due to the maturing of the PC-10 specification.

The challenge, Glaser noted, is to offer test capacity at a level that allows customers to meet their deadlines for approval testing, but at the same time not to overbuild test capacity when the testing market is mature.

As a category is being developed, all labs including us invest and stay very active in the development process of proposed new tests. This is key to understanding the tests prior to our customers using the tests as a tool for formulation development, Glaser continued. During the period starting six months or so prior to when limits are set for a category, the focus for all laboratories is to provide representative test severity that is as precise as possible, so that effective formulation strategies can be developed ahead of a new category launch.

Then, after the industry pass/fail limits are negotiated, each laboratory switches to an approval-testing mode, when representative test severity becomes very critical. The high fixed costs for maintaining the broad infrastructure needs associated with running a quality engine test laboratory drive competition between all laboratories.

ARL is heavily involved with ASTM, and plans to continue. For example, Joe Franklin, a senior research scientist here at Automotive Research, is the D02 SubcommitteeB chairman, Glaser said. We work side by side with all stakeholders, including the technical staff from all industry laboratories. With the acquisition by Intertek, we do not envision our role in the industry changing.

ARLs management team and staff will continue to run the business, integrated into Intertek Caleb Bretts global laboratory network. This network includes PARC Technical Services in Pittsburgh, which Intertek acquired in August. PARC conducts contract automotive and pilot-plant testing.

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