Success Story

In 1993, when brothers Atanas and Plamen Bobokov decided to create an oil trading company, they could not have imagined that two decades later their enterprise would have expanded to the point that it has. The company now comprises lubricant production facilities in Bulgaria, Turkey, Hungary and Uzbekistan, as well as two rerefineries under construction in Ukraine and Uzbekistan. And its products are sold not only in Europe but in such regions as Central Asia, Middle East and Africa.

In 2004, Prista decided to build on its reputation in the region by offering grease products as well. By that time, the company had already captured around 60 percent of Bulgarias 50,000 tons per year lubricant market, and it entered a successful partnership with American oil major Texaco. The companys diversified operations also boast successful entries in battery manufacturing (formerly owned by the state) and LED light manufacturing.

Pristas primary lubricants manufacturing business consists of two large blending plants, the 110,000-t/y facility located in the Danube port city of Ruse, Bulgaria, and the 80,000-t/y plant in Korfez, Turkey. It also owns a 36,000-t/y lubricant blending plant in Uzbekistan, a joint venture with the Uzbek state oil major Uzbekneftegaz. Through its affiliate Bogdany Petrol in Hungary, the company operates a wax, petrolatum jelly, and emulsions plant located near the borders with Ukraine and Romania.

Entry into Grease

In developing its grease business, Prista management understood that the path to success meant the establishment of a subdivision. The companys top management had a clear idea to focus on grease production and grow it, said Ceco Anastasov, Pristas executive director. It is normal for grease to hold around a 5 percent share of a lubricant producers total capacity, he said when LubesnGreases visited the plant in late April. It is a type of synergy: The grease business on its own would not thrive if its not supported by a larger lubricant business.

In 2007, on the foundations of a much older company, Prista created Verila Lubricants AD (a shareholder society) where Prista acquired a 50 percent stake in the company, which it later increased to a 75 percent share. Another 25 percent is owned by Dimitar Angelov, an entrepreneur who sits on Pristas board of directors. Through his company, Verila Invest, Angelov bought the 1.2-hectare plot with the old grease factory and warehouses from the state, and Prista later stepped in as a main investor.

After an investment financed by its own funds and a loan from the European Bank for Reconstruction and Development, Verila started a complete reconstruction and update of the technology and equipment. By late 2014, the total investment amounted to 4 million. The result is a revamped 20,000-t/y grease plant, about triple the original capacity in the 1980s. The plants production facility expanded on 5,500 square meters and it has 550 tons of base oil storage capacity.

I see grease as a gourmet item in the lubricants business. If making lubricants is Italian cuisine, production of grease is French gourmet cuisine, said Cristian Leon, the newly appointed executive director of Verila. If someone says the production of lubricants is more complicated than the production of greases, they are wrong, he added during an interview in his office in Ravno Pole, the plants location in the foothills of Verila Mountain, an hours drive from Sofia.

Leon, who oversees Pristas business in neighboring Romania and travels to Bucharest as frequently as three days a week, is very enthusiastic about his new appointment and expanded responsibilities. What were trying to do now is standardize our knowledge, he said.

Originally, Verila was a chemicals producer established by Bulgarias Communist government in 1945. In subsequent decades, it was the countrys primary producer of industrial lubricants but was not involved in grease production until the 1980s. The company began manufacture grease in 1981 with equipment imported from the United States. U.S. consultants are now helping it establish a small-scale pilot grease production line. Verila greases are based on lithium complex, aluminum, molybdenum and calcium-sulfonate soap thickeners.

Leon explained that grease production is not particularly easy to start from scratch. You have to have the know-how, and that is exactly what we have purchased from some of our European partners.

The companys priority is to increase its toll blending capabilities. We definitely need expertise in this area as our aim is to achieve up to 30 percent of total revenue from toll blending, Leon observed. It would give us a necessary critical mass for a big leap forward.

In addition, Verila is making an effort to increase its small-batch product portfolio. Right now, it can offer 400-gram cartridges, 5-kilogram buckets, 15-kg pails, 50-kg metal drums and 180-kg open-head drums filled on a semiautomated production line. The idea behind the smaller [100-g and less] batch production is the smaller the batch, the bigger the margin, Leon asserted.

Getting the Word Out

After the modernization project was completed in late 2014 and upgraded production commenced, Verila launched an aggressive marketing campaign to promote its grease products in Central and Eastern Europe, as well as in South and Eastern Africa. The company even has a salesperson in the U.S., who is trying to promote its products in Central America.

It is worth noting that the plant has a favorable location for logistics with a spur that connects the warehouse to the main railway line. In addition, the plant is just 1 kilometer away from Sofia-Burgas, Bulgarias main highway.

At the moment, the plant produces around 2,500 tons of greases annually. Of these, around 500 tons are sold domestically, 500 tons are sold in Romania and another 500 tons total are shipped to neighboring Serbia and Turkey. We focus on markets from the Adriatic to the South Caucasus and from Greece to Poland, said Gancho Krastev, Verilas export sales manager. Also, we established contacts and are making efforts to ship our products as far as Taiwan, New Zealand and South Africa. And we already have established channels in Tunisia, Algeria and Yemen, he confirmed, adding that Baltic countries are also in their sights.

Verila and Prista branded greases are well known in the region for use in a range of industries, including automotive, general industrial manufacturing, steel, mining, cement, construction and agriculture. The two largest railway companies in the Balkans – Zeleznica Srbije and Romanian CFR – the nuclear power plant in Kozloduy, Bulgaria, as well as the largest iron and steel manufacturer in Turkey – Erdemir – are all Verila customers.

The plant features state-of-the-art laboratory equipment for grease testing as well as testing of base oils, coolants and other products according to ISO, ASTM and DIN standards. We can run more than 25 test methods according to over 75 international standards, Krastev said. We have a small-scale batch test lab and two 400-liter reactors to produce specialties. All of this gives us freedom to develop new grease formulations. In addition, the plant has the capacity to produce 27,000 t/y of antifreeze, deicers and other automotive fluids.

Leon is confident that under his management and with the help of the companys international team of specialists, Verila can improve its fixed costs and production efficiency as well as its marketing. Our aim is to become more competitive, so we can enter Western European markets and be part of the bigger game where a few producers make grease for many other companies, he said.

He and Anastasov confirmed that the parent company has a lot of plans for expansion. My years with Prista are like constantly being on a rollercoaster. There is always some development, some investment, some purchase or establishment of new partnerships. And Im confident this will continue, Leon concluded. Anastasov added that the company has plans to expand its lubricant production into Kazakhstan and possibly Algeria.