Ipiranga has more than 4,000 gasoline stations across Brazil — the nations second-largest chain after Petrobras — and also is a large petrochemical supplier. Its lubricants operations have a significant branded market share in Brazil, for both automotive and industrial lubes.
Kleber Lins, lubricants consultant for Petrobras, told Lube Report, “in my opinion, because service stations are an important sales channel for lubricants in Brazil, we can expect that a part of Ipiranga’s lube sales will be replaced by the Petrobras brand (Lubrax) in the north, northeast and midwest regions. The finished lubricant brands will coexist, but we still don’t know if any changes are already planned for that.”
The company processes white oils at a 40,000-metric-ton/year plant in Bahia, and it also holds an estimated 10 percent of the lubricants market in neighboring Paraguay. Lins said Ipiranga has two finished lubricant blending plants, but both are located in regions now operated by the Ultra Group — Rio de Janeiro and Rio Grande.
The Associated Press reported that the companys lube operations will be divvied up by two of the purchasing partners, with Ultra taking over Ipirangas fuels and lubricants business in Brazils populous south, and Petrobras absorbing the business in northern, northeastern and central Brazil. The Ultra Group is a Sao Paulo-based fuels distribution and petrochemicals company.
In addition to being the countrys lubes market leader, Petrobras owns Brazils only base oil refineries, two of them paraffinic and one naphthenic. It also operates a paraffinic base oil refinery in Cochabamba, Bolivia. Linssaid the base oil market will probably not be affected by the acquisition.
Geeta Agashe, director of the Petroleum and Energy Practice at Kline and Co. in Little Falls, N.J., told Lube Report that based on 2005 data, this acquisition will bolster the Petrobras-Ipiranga market share to a combined 35 percent of the estimated 970 kilotonnes Brazilian lube market, leaving behind Chevron at 18 percent. Without the merger, Agashe explained, Petrobas alone accounted for 22 percent market share, four points ahead of Chevron, according to the Kline report Competitive Intelligence on the Global Lubricants Industry 2006-2016.
In our assessment, Ipiranga was the number three market leader in both the commercial automotive and industrial segments, but ExxonMobil and BP-Castrol were ahead of Ipiranga in the consumer automotive segment, she added. I think this move clearly bestows well for Petrobrass vision and goal to be the number one supplier of lubricants in Latin America, and to consolidate its lead by a significant margin in the large and growing country market of Brazil.
Petrobras President Jose Sergio Gabrielli de Azevedo said, Based on its strategic planning, Petrobras has reinforced its active presence in the domestic petrochemicals industry, consolidating its position in distribution, especially in the north, northeast and midwest [of Brazil], and has increased its presence in various sectors in which it operates.
This acquisition represents a significant expansion of operations in fuel distribution, now owning two of the major oil derivative distribution brands: Ultragaz and Ipiranga, said Pedro Wongtschowski, president of the Ultra Group. This is an investment in the fuels market, the biofuels market and in the Brazilian market. It is an investment in Brazil.
The acquisition will entail several steps involving shares and shareholders of the companies. In the final step, petrochemical assets will be sold and handed over to Braskem and Petrobas. Braskem will acquire 60 percent of these assets and Petrobras will acquire the other 40 percent.
Braskem has been a leader in the Latin American market for thermoplastic resins since its formation in August 2002, when the groups Oldebrecht and Mariani joined their petrochemical assets.