Finished lubricant demand in the Middle East and Africa are each projected to grow at close to 2.5 percent per year from 2009 to 2019, according to study released in November by Kline and Co. The study, Lubricant Basestocks in Africa and the Middle East 2010: Market Analysis and Opportunities, concluded that the Middle East will grow slightly faster – around 2.7 to 3 percent annually compared to between 1.8 percent and 2 percent for Africa. The U.S. consulting firm cited the same main causes for both regions: population growth, rising disposable incomes and rapidly expanding car, truck and bus fleets. Those fleets are also modernizing, the company noted.

This is predominantly an automotive market, with automotive oils accounting for close to 75 percent of the total demand, Project Manager Milind Phadke said during an Internet press conference announcing the study. That includes 42 percent heavy-duty motor oils, 25 percent passenger car motor oils and 8 percent other automotive lubricants, he said.

General industrial oils accounted for approximately 13 percent of the markets in both regions, Kline found, and industrial engine oils about 3 percent. The nine percent remaining are considered unclassified oils. Some general industrial oils and industrial engine oils are consumed in the Middle East in the petroleum sector as well as the marine sector, Phadke added.

Kline estimated finished lubricant demand in Africa and the Middle East reached 3.3 million metric tons in 2009. Iran is the biggest country market, ac-counting for 20 percent of the combined total for the two regions. The United Arab Emirates is responsible for 16 percent of their combined demand, followed by Egypt with 11 percent, Saudi Arabia with 9 percent and South Africa with 8 percent.

Lube blending operations in the two regions consume approximately 3.3 million tons per year of base stocks, the study found. The regions produce 2.5 million t/y of base stocks, all of it API Group I, creating a deficit of 700,000 t/y. Imports fill the gap, and roughly half of the imported stocks are Group II or III.

Shell Sells Metalworking Business

Houghton International reached an agreement in November to acquire Shells metalworking and metal rolling oils business. The companies did not disclose terms of the transaction, which includes manufacturing sites in Germany, France and Italy.

The decision was made to exit the metalworking and metal rolling lubricants business following a comprehensive strategic review, a Shell spokesperson told Lube Report. This strategy fits with our drive to simplify our global downstream portfolio, concentrating our footprint and focusing on selective growth.

Houghton, headquartered in Valley Forge, Pennsylvania, U.S., cited several reasons for its attraction to the deal. It said Shell Metalworking Oils has some of the best talent in the market, solid products and technologies, and a well-established distributor network, along with a strong global presence, especially in high growth countries like China, Mexico, Russia, Turkey, India and Thailand.

The factories are in Dortmund, Germany; Turin, Italy; and Rouen, France. Houghton will also acquire the product brand names, the associated trademarks, intellectual property, customers and employees.

Houghton asserted it has no information at this time about any job cuts, or changes for the Shell metalworking oils plants. Houghtons executive management team will assume responsibility for the Shell metalworking oils business once the sale closes, which was expected to happen early this year.

Russian Lubes Regain Ground, Slowly

Russias lubricant market made a modest rebound in 2010 but will require several years to fully recover, an industry insider told a Moscow conference in November.

Speaking at Lubricants Russia 2010 conference, InfoTek General Director Tamara Kandelaki said that Russias motor oils demand in 2009 declined 23 percent compared to the year before.

Unlike the other developing economies (China for example) that reported one-digit demand growth, Russias lubricant market experienced a huge decline in 2009, she said. Its the lowest level in the last five years, and demand wont reach the pre-crisis level in the next two or three years. Russias total lube demand in 2009 stood at 1.3 million tons, a 13 percent decline compared to the year before, Kandelaki said. The countrys motor oil demand last year stood at 768,000 tons, down from 996,000 tons in 2008. Industrial lubes demand in 2009 was 583,000 tons.

Foreign marketers importing to Russia did not avoid the recessionary fallout. The biggest, ExxonMobil, lost 21 percent of its Russian sales, compared to the year before. Total finished lubricants imports last year stood at 223,000 tons or more than a 20 percent drop compared to 2008, Kandelaki said. Shells sales last year contracted 18 percent, compared to 2008, while BPs have increased only 2 percent.

Russias biggest automotive lubes marketer in 2009 was Lukoil, according to InfoTek. It held a 28 percent market share, followed by Rosneft with 18 percent market share. TNK-BP was third, with 15 per-cent share, followed by ExxonMobil with 7 percent, Shell with 6 percent and Gazprom Neft with 5 percent.

Madius Appointed by Axel Christiernsson

Constantin Madius was named group product manager of Axel Christiernsson International in December. He has been with the company since 1998 and most recently was a sales account manager. He has also been responsible for customer training courses and lubrication seminars that form the basis of Axels Grease Genius program.

Headquartered in Nol, Sweden, Axel Christiernsson is a producer and toll manufacturer of lubricating greases.

Croda Taps Nottingham

Chris Nottingham has been appointed vice president of Croda Lubricants. For the past two years he served as vice president of purchasing and before that was managing director of Croda Singapore for a decade.

Based in Goole, East Yorkshire, U.K., Croda supplies synthetic base fluids and performance additives derived from renewable and sustainable raw materials.

Shell Delays Russian Plant

The opening of the first foreign-owned lubricants blending plant in Russia has been pushed back a year, to late 2011, but Royal Dutch/Shell says it remains committed to the project.

The British-Dutch energy giant started building the plant last year. The 180,000 t/y facility located in Torzhok, in the Tver region, was originally scheduled to open by the end of 2010 or early this year, the company said. It will be one of the largest in the Shell network worldwide.

A Shell spokesman said delays are common for such large projects. She cited several reasons for this delay, including design amendments, material delivery delays and developmental issues.

The city of Torzhok is located near the main transportation routes that connect Moscow and St. Petersburg and it is approximately equidistant from the two major cities.

Repsol Expands in Asia

Spains Repsol reached agreement with Malaysian UMW Group to produce and distribute Repsol lubricants through-out China, Malaysia and other countries in the region, including Singapore, Brunei, Papua New Guinea and Myanmar.

The five-year deal is part of Repsols international branding expansion plan. The Madrid-based company said it expects to market more than 20,000 tons of lubricants in Asia-Pacific by the fifth year of the deal. That would exceed 25 percent of its annual sales in Spain.

The products will be blended in UMW plants in Malaysia and China. Repsol sells lubricants to the automotive, motorcycle and industrial sectors. We anticipate automotive and motorcycle demand especially, and expect significant growth in both Malaysia and China for both these products, spokes-man Kristian Rix said.

Repsol currently markets its lubricants in more than 60 countries including Indonesia, Japan, the Philippines and Taiwan. UMW is a conglomerate based in Malaysia involved in four core businesses: automotive, equipment, manufacturing and engineering, and oil and gas.

Clariant Makes Polyetheramines

Clariant has added polyetheramines to the range of specialty chemicals produced at its Gendorf, Germany, plant. Polyetheramines are used in a variety of applications and as intermediates in the production of numerous chemical products, including dispersants used in lubricants and other applications.

Clariant said many segments that use polyetheramines are growing and that it began producing them because of rising demand. The change required installation of a new reactor at the companys nitril-amine plant in Gendorf. The company said it will initially focus on providing polyetheramines to a core list of customers in the crop protection and construction markets, but it anticipates offering to additional customers at a future date.

BP, Shell Unload Zimbabwe Assets

A Zimbabwean-controlled investment company agreed in October to purchase BP and Shell operations in Zimbabwe, including a dormant lubricant plant.

The purchasing company is Masawara Plc, which is listed on the London Stock Exchange and registered on the British Crown offshore financial center of Jersey, although its main office is in Harare, Zimbabwe. According to Newsday Zimbabwe, Shingai Mutasa, one of the countrys richest business tycoons, owns a 63 percent stake in the company.

Shell operates under BPs license to do business in Zimbabwe. Collectively the activities are known as BP and Shell Marketing Services Ltd. and include 73 service stations, 10 storage depots and 87 employees. BP confirmed the transaction, but neither it nor Masawara disclosed the price.

Masawara noted that the deal still awaits approval from competition authorities. Newsday indicated that such consideration largely hinges on concerns about preserving local ownership, so the agreement is expected to easily gain approval.

Masawara representatives did not discuss plans for the lubricant plant.

SKF Buys Lincoln Industrial

SKF has agreed to buy U.S. lubrication systems provider Lincoln Holdings Enterprises, Inc. from Harbour Group for 748 million. SKF said the acquisition will help it expand its growing lube systems segment.

Lubrication systems is a very important business for SKF and also one of our technology platforms,

Chief Executive Officer and President Tom Johnstone said in a statement. Combined with our other platforms it enables us to help our customers reduce friction and energy consumption.

SKF, which is based in Gothenburg, Sweden, is primarily a bearing and lubrication system supplier that also offers its own line of lubricants. It said it was attracted to Lincoln Industrial because of its complementary product portfolio – which has little overlap with SKFs – and because of its strong sales and manufacturing presence in North America and Asia.

SKF said Lincoln is also profitable, having earned a profit margin of approximately 24 percent on sales of nearly U.S. $400 million (300 million) in 2010. Lincoln has 2,000 employees.

Harbour is a privately owned company based in St. Louis, U.S. The sale is subject to regulatory approval.

IPAC Sets Up Shop in Dubai

U.S.-based additive supplier IPAC opened an office and warehouse in the United Arab Emirates in October. The facilities will be a regional headquarters for the companys operations in the Middle East, Africa and Asia.

The office and warehouse are man-aged by Dippu M.G. Nair and Naren Sachanandani.

We have analyzed this market for many years and with the ever-growing world demand for automotive, industrial and marine lubricants, this region has shown a steep growth for lubricant additives, Chief Executive Officer Brian Cereghino said.

IPACs corporate office is in Dublin, California, U.S. It supplies lube additive packages and components.

BRB Opens Chicago Facility

BRB Internationals subsidiary in the U.S. opened a new regional headquarters outside Chicago. In addition to offices, the new facility includes a manufacturing plant and a warehouse. Officials said it is part of a strategy to grow in the U.S.

Headquartered in Itervoort, Netherlands BRB supplies silicones, lubricants, lube additives and additive components.