Croda International on Monday said it sold its refrigeration lubricants business to Lubrizol Corp. for 62 million pounds (U.S. $124.9 million), as part of its restructuring program announced following its acquisition of Uniqema last year.
The acquisition includes Crodas polyol ester and alkyl benzene refrigeration lubricant technology, Emkarate and Icematic brand names, customer lists, manufacturing know-how and complementary intellectual property. No manufacturing facilities are included in the transaction.
Croda acquired the refrigeration lubricants business as part of the Uniqema acquisition from Imperial Chemical Industries PLC in June 2006. Following the acquisition, Croda determined the refrigeration lubricants business was not part of its core business.
The companies expect that a small number of Croda employees will become Lubrizol employees after the transactions closing, which is expected early in the fourth quarter. They will be from the U.K. and Asia, Lubrizol spokesman David Cowen told Lube Report.
Cowen said Crodas product line complements Lubrizols existing line of refrigeration lubricants, which is handled by subsidiary CPI Engineering Services, based in Midland, Mich. There are some possibilities, looking at their product line, of applications wed like to pursue – new applications for their existing products, Cowen said.
Demand for refrigerators and air conditioners in developing countries is increasing, providing strong growth for the related lubricants. Growing markets for cooling include China, Brazil and India, where people are eagerly buying cooling, including air conditioning, refrigeration, industrial chilling, ice making and process cooling.
In refrigerators and air conditioners, the lubricating oil mixes with the refrigerant and circulates through the system to reduce wear in the compressor. With rare exceptions, the oil and refrigerant must be wholly miscible across a spectrum of temperatures. Consumer appliances such as refrigerators and automotive and residential air conditioners dont need a lot of lubricant, which is usually sealed for the life of the compressor. In addition to the former Uniqema, other major players in filling original equipment in the refrigeration lubricant market include chemical specialists Cognis and Hatco.
Phase out of ozone-depleting refrigerant gases and conversion to environmentally friendly chemistries required by the Montreal Protocol of 1987 and the Kyoto Accord are expected to drive market growth for new refrigeration lubricants. The Montreal Protocol was an international agreement to turn away from ozone-depleting chlorofluorocarbon (CFC) refrigerants, such as R-12 or freon. Some equipment makers turned to less-damaging refrigerants, such as hydrochlorofluorocarbons – R22 being the most popular – but HCFCs are considered a stop-gap, with no new HCFC-filled equipment allowed after 2009.
Most manufacturers of refrigerators and climate systems in the early 1990s turned to ozone-safe hydrofluorocarbons (HFC). Mineral oils are immiscible in HFCs, which need polyol ester to work.