Russian lubricant giant LukOil announced last week a three-year agreement to supply industrial lubricants to Novolipetsk Steel. LukOil called the deal another step in its efforts to build its lubes business.
This is our strategy – to enter supply agreements with large, key customers, a LukOil spokesman said. For one thing, the plant will consume a significant volume of lubricants. Secondly, it assists us in planning because it is a three-year contract. At the same time, the agreement calls for us to cooperate in the development of new types of lubricants, so it provides us a way to increase the number and quality of products that we offer.
Novolipetsk is among the worlds largest steel producers, with annual sales of U.S. $7.7 billion. It is an integrated steel company and produced 9.1 million tons in 2008.
The company, which is based in Lipetsk, in southwestern Russia, consumed approximately 5,200 metric tons of lubricants last year, with LukOil providing 3,500 of those tons, according to LukOil. LukOil said it first began selling lubricants to Novolipetsk in 2007 and will provide virtually all of the companys lubricants under the new agreement.
The volumes that LukOil was not already supplying were imported.