Shell Retains Global Lubes Lead

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Shell remained the global market share leader in finished lubricants in 2007, with a 13 percent share, according to consultancy Kline and Co., which estimates the global market at 39.3 million metric tons in 2007, up 1.8 percent from 2006.

Kline’s study, “Competitive Intelligence for the Global Lubricants Industry, 2007-2017,” found that Shell edged out its largest competitor, ExxonMobil, which had an 11 percent market share in 2007. Rounding out the top five lubricant marketers were BP at 8 percent, Chevron at 6 percent and Petro-China at 5 percent.

The real story from a product segment standpoint isanticipated growth of synthetic and semi-synthetic categories, according to Geeta Agashe, vice president of Little Falls, N.J.-based Klines energy research practice.

ExxonMobil is very well entrenched with their Mobil 1 brand, Agashe told Lube Report. Shell and BP have a significant presence in this segment as well, amongst the majors. There are a lot of the smaller, niche players active in certain countries markets as well, but overall the big three are well poised to take advantage of the growth opportunity. In addition, Shell might be thinking of this with reference to their GTL play.

High oil prices make todays economic environment especially challenging; however, developments such as the shift toward synthetics and growing demand in emerging markets create real opportunities for the lubricants industry, said David Pirrett, executive vice president for Shell Lubricants in Houston.

Among smaller lube marketers, Petro-China overtook Total in 2007, according to Klines findings. Idemitsu, Fuchs, Lukoil, Sinopec and Indian Oil all grew, Agashe said. Apart from that, there are various small niche players that enjoyed growth.

While the global market for finished lubricants is mature, Agashe said, the real opportunities are at the regional and country level. Volume-wise, Asia is going to be the growth engine of the future, and China and India in particular, with demand declining in Western Europe, and North America being essentially flat, she said.

Together, China and India comprise 17 percent of global lubricant consumption, according to Klines report. Markets in China, the second largest consumer of lubricants, and India, the fifth largest, are growing at rates of at least 6 percent annually, exceeding the world average. Agashe said that in terms of industries fueling growth in demand in Asia, automotive is certainly big, and then there is growth in power generation, manufacturing, textiles, food processing and construction.

Agashe said the industrial segment offers a beacon of hope for the flat North American market. The commercial automotive segment is flat, she said. With high gas prices, consumer automotive is negatively impacted. But with the weakened dollar, our goods manufactured here are well received in the rest of the world.

Other opportunities for lubricant suppliers cited by the report include development of green lubricants to address environmental and legislative measures that will continue to affect global vehicles and equipment manufacturers.

Competition across the entire lubricant supply chain will remain intense as the mega-majors try to differentiate themselves through supply-chain initiatives, branding, marketing and product portfolio analysis. Acquisitions, divestitures, alliances and shut-downs are likely to continue in 2008, according to Agashe.

She said lube marketers can also expect continued competition from national and independent oil companies such as Lukoil, Petronas, Petrobras and Indian Oil as those suppliers seek to grow their domestic market shares and expand outside their borders.

For more information on the research, visit www.klinegroup.com/reports/y533.asp.

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