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Encore in South Africa

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Travel around the lubricant industry and youll find a few families that have built their own businesses. The von Knoblauchs of South Africa are one such family. Percy von Knoblauch and his wife Roswitha founded Cera Oil in 1952 and, over the next three decades, grew it into the countrys largest independent lubricant supplier.

Whats more rare, however, is what the family did afterward. After selling Cera to Shell, they did it all over again. In 1987, Percy and Roswithas son Ralph and his wife Ingeborg founded Flexilube, a company following the same basic business model as Cera. Today, the family claims, their company is once again the largest independent lube manufacturer and marketer in South Africa. And now, a third generation of von Knoblauchs have taken the steering wheel.

First Time Around

Percy von Knoblauch was new to South Africa but not the lubricant industry when he founded Cera. He was born in the United States to German immigrants who later returned the family to Germany. Percy went to work for Vacuum Oil Co. in Germany and later served stints with several other European lubricant companies before emigrating with his family to South Africa in 1951. A year later he founded Cera Oil, a manufacturer of industrial and automotive lubricants.

The company grew steadily, according to Ralph von Knoblauch, who came to work for his father. We became the largest independent oil company in South Africa, and as such, we were Shells largest base oil customer in South Africa, he told LubesnGreases during a November interview at Flexilubes offices in Meyerton. Then one day Shell came along and made the family an offer that we couldnt refuse.

Shell bought a majority stake in the company, gaining control to secure their base oil off-take and increase their blending facilities. Ralph and Ingeborg von Knoblauch retained their minority holding and continued managing the business for three years. During that time, the family attempted to buy back Shells stake in the business. Unsuccessful, they sold their remaining shareholding to Shell in 1984.

Terms of that deal included an agreement that the von Knoblauchs would not compete with Shell for two years. It wasnt long, however, before they began planning to reenter the business. They bought a property in Meyerton, near Johannesburg, and built a blending plant there. By January 1987 they were ready to launch Flexilube. They went out themselves and canvassed new business, said Irene von Knoblauch, daughter of Ralph and Ingeborg and now general manager of Flexilube. The company grew slowly and organically over the years. Today we are once again the largest independent lubricant company in South Africa.

In 2012 Ralph celebrated 50 years in the industry. He has retired now and handed over day-to-day management to Irene and her brother, Anton von Knoblauch, who is technical director.

Makers of Metalworking Fluids

Flexilube supplies a full range of automotive and industrial lubricants, but still specializes in metalworking fluids. The company makes neat oils (formulated with 100 percent mineral oil base stock) for gear cutting and grinding, deep-hole drilling, broaching, honing, forming, stamping, drawing, pressing and extruding. It also makes water-soluble fluids for applications such as milling, turning, drilling, tapping, tube-forming and sawing.

A very simple rule of thumb is, when the work piece is stationary, use neat cutting oil, when the work piece moves, use soluble cutting fluid, said Paul Linaker, Flexilubes sales director.

Among the primary industries that Flexilube supplies are mining, auto manufacturing, general engineering, arms and munitions manufacturing, construction, railways and optics.

Anton von Knoblauch said Flexilube supplies end users directly and that it emphasizes customer service. This begins with helping customers identify the types of fluids that they need, a task that includes on-site lubrication surveys.

The products that we supply are application dependent, he said. What kind of metals are the clients working with – both the work piece and the machine tool? Do they need a soluble or semi-synthetic fluid or do they need oil? We have some off-the-shelf products, but because we are catering to specific applications, much of what we sell are custom-made products.

He explained that formulators need to understand that some metals subjected to metalworking processes can be very reactive with some of the chemical additives used in fluids. Unwanted reactions are more common with neat fluids than with water soluble products because the latter are generally 90 to 95 percent water. Suppliers need to pay attention especially to the additives used for extreme pressure performance, lubricity, and friction modification to avoid unwanted reactions.

Irene von Knoblauch said that customer service goes beyond providing the correct fluid for a particular operation. After that, the supplier needs to ensure that the product is used correctly.

Fluids can be easily misapplied, she said. For example, they may not prepare an emulsion correctly. You should not add water into an oil; always do it the other way around. And if [customers] change their operation, someone needs to check that the fluid is still compatible, or serious problems can develop.

Linaker added, We understand the application and the correct oil for the application. But we need to make sure the customer puts it in the correct place. They need to know that it is a technical product. A misapplication could cost them time and money.

Slow and Steady

South Africas demand for metalworking fluid is relatively flat, according to Anton von Knoblauch.

We have seen a small upturn, but certainly growth is slow, he said. But generally we are quite comfortable with it, because we believe that slow growth is sustainable. Fast growth is quickly gained but easily lost, he added.

Flexilube sees two major trends in South Africas lubricant industry.

The first is that clients are really interested in the cost-effectiveness of products, and they are looking for a product that does the job for them at the best cost. At the same time, clients are looking for the extra value in products.

Like many South African businesses, Flexilube must cope with labor crises, such as a recent strike by truckers that hamstrung commerce in the country for several weeks.

The way that we look at these situations is that each challenge also presents an opportunity to prove how resilient we are and an opportunity to become more competitive, Anton von Knoblauch said. Certainly with the strikes there have been interruptions, but we pride ourselves on the fact that we can still provide the service our customers expect even in difficult situations. Strikes can be disruptive. Fifty percent of South African manufacturing uses metals from our mines. So a strike like this can really slow down manufacturing.

He said many countries in Africa are developing metalworking sectors and that Flexilube is interested in expanding. But the company is moving carefully and restricting such thoughts to neighboring markets such as Zambia, Namibia and Angola. It would not, for example, branch into Nigeria, even though that country has a huge lubricant market.

One of the most important things to consider when you are dealing with metalworking fluids is that they require service, his sister said. If you do not have somebody on the ground, eventually something will go wrong. Then the customer will think the product has failed, when in fact the issue most likely would be something to do with the incorrect use of the product.

At this time, we offer full services to our customers. We have a full team of sales representatives, visiting their customers frequently. They check the machines and products, check the concentration and manage the products. she added that Flexilube feels it is not possible to replicate such services in Nigeria, until the company is in a position to develop a customer service staff in the region.

Instead, Flexilube will stick closer to home and focus first on preserving the satisfaction of existing customers.

Certain companies have been our clients for the last 25 years, Anton said. Some have been bought and sold two or three times over, and they are still with us. We value that.

Ralph added that Flexi-lube does not intend to diversify into other sectors of the economy. It is better to stick to what you know than to venture into anything that you dont have knowledge of.

It is an approach that seems to have helped the von Knoblauchs build a successful business – not once but twice.

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