ELM Spins Off Metalworking Fluids


Environmental Lubricants Manufacturing has spun off its metalworking fluids business to Performance BioLubes LLC, which hopes to expand the bio-based fluids market nationally and internationally.

Minority shareholders in ELM formed a technology holding company that licensed ELMs bio-based metalworking fluids technology to Performance BioLubes. PBL was formed by the distributors of ELM metalworking fluid products, including former ELM metalworking fluids manager Gene Tripp.

ELM chairman and co-founder Lou Honary said that after certain goals are met, PBL will then own the metalworking fluids technology. Basically, theres a price for this, Honary told Lube Report. Rather than giving it to PBL and then getting cash, they [the holding company] are getting a form of royalties or licensing fees until they get their money.

According to Honary, the transaction includes all of ELMs bio-based metalworking lubricants and fluids, which include slideway lubricants, coolants, cutting oils, drawing fluids, metal forming fluids, metal stamping fluids, quench oils and tapping fluids. Alan Burgess, technical manager, said Cedar Falls, Iowa-based ELM has informed its existing metalworking customers of the change and will continue to support the products. With product blending and quality assurance at ELM, there should be no interruption of services and product delivery, Burgess said.

Honary emphasized that the transaction will allow ELM to focus on its core expertise of manufacturing and selling bio-based railroad and truck greases, food grade lubricants and greases, and a number of other hydraulic and gear oils.

Performance BioLubes has an exclusive contract for sales, marketing and development of the metalworking products, PBL President Bob Frazier told Lube Report. Well be developing the brand name Performance BioLubes. Weve had tremendous success with it throughout the metalworking industry. Im in the Detroit market myself, and Ive been selling it here for over two years.

Frazier said PBLs goal is to expand the reach of the metalworking fluids product right away. We pretty much do most of our business through four or five distributors within the country, he noted. We need to put distributors in each major metalworking market throughout the U.S., Canada, Mexico and internationally.

According to Frazier, PBL has its headquarters in Morton Grove in the Chicago, Ill., area, and blending operations in Cedar Falls, Iowa.

A fire on March 20, 2007, destroyed ELMs bio-based lubricants production facility in Plainfield, Iowa. That really kind of pulled the rug from under our feet, ELMs Honary recalled. We had to go outside the state to contract blend our greases, which made us less competitive. It distracted us from a lot of our goals at the time.

Several companies had expressed an interest in ELMs metalworking fluids, he added. As we were negotiating, going through, we thought this would be a better deal, Honary said of the deal with PBL. Because these guys are our own distributors, theyve seen the proof of the performance. They are also tied in to other distributors, as they distribute metalworking fluids from other companies.

So really, that is exactly what we shouldve done years back, Honary continued. We built our own distribution network and everything, and it took time. Whereas these guys could go and grow this many times, very quickly, because theyre already tied into distribution.

Honary said that in the aftermath of the fire, and dealing with problems related to it, the company had less time to focus on some of its other products.

Our greases for railroads, trucks, food industry – all of those became orphaned for a little while, he explained. The other parts of the business had been picking up, we just want to be able to focus on them. Now were trying to put resources to bring them back to the customers again. Hopefully we can reach out to ILMA [Independent Lubricant Manufacturers Association] members, and help them to also distribute these products.

Honary said ELM still has plans for its Plainfield location. We are certainly looking at the possibility of rebuilding the Plainfield plant, although the location is going to still be up in the air, Honary continued. Our tank farm is in Plainfield, we have oil stored there, and a rail spur, and we have our own tankers.

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