We [had been] importing base oils at better prices, but it seems our [importation] costs now exceed the cost of production, especially with the local currency fluctuation, Khan said. In the last six months, the exchange rate for the U.S. dollar has jumped from 1,650 Tanzanian shillings to 2,200 shillings.

Local manufacturers of packaging materials have also announced price increases, Khan said. We have received notice from local manufacturers of packaging material that they will hike their prices … by 15 to 20 percent.

Gulf Energy Ltd. of Kenya also raised prices. We [increased] lubricants prices, mainly because of the exchange rate, the companys lubricants sales manager, Richard Mugambi, said in an interview. Kenya has no base oil plants, so blenders must import all of their base stocks. Base oil transactions are usually conducted in U.S. dollars.

Unlike General Petroleum and Gulf, Kenyas KenolKobil has not decided to raise prices. We are not planning any price increases at the moment because when base oil prices crashed last year, we did not lower prices across the board, Petroleum Manager James Mutisya said. We lowered [prices for] only the

However, that may change later this year, Mutisya added. When we take delivery of third quarter 2015 base oils stocks by September, the price difference may be significant.

Lukoil Produces More Lubes, Less Base Oil

Lukoil produced 973,000 metric tons of base oils last year, down about 7 percent from 1.05 million tons in 2013, while its finished lubricant production increased 20 percent. The Russian oil major accounted for 45 percent of the countrys combined production of base oils and lubricants, according to the companys annual report.

Last year, Lukoil produced 121,000 tons of finished lubricants at its blending plants in Russias Tyumen Oblast, as well as in Finland, Romania, Turkey and Austria. In 2013, it produced 101,000 tons from those plants, with the exception of the 80,000 t/y plant in Austria, which it purchased in July 2013.

Lukoils 2014 strategy was to scale down production and marketing of oils in the low-cost segment and focus on domestic production of high-tech oils, according to its report. Lukoil said it continued to develop its premium business segment, which includes high-performance lubricants and marine lubricants. Lukoil produced 29,400 tons of high-performance oils in 2013, up 24 percent from 23,700 tons. The category includes private label industrial lubricants, of which Lukoil sold 68 percent more in 2014. Production of all private label lubes jumped 10 percent year-over-year.

Lukoil said its top priority in 2015 is to increase its production in Russia by taking advantage of the state-sponsored import substitution policy. Its priorities include the expansion of its lubricant and grease portfolio from 336 to 370 products, expansion of its distribution range and strengthening cooperation with its major customers.

Shell Opens 8th China Blend Plant

Shell opened a new blending plant in Tianjin, China, in June, the latest in a series of investments by the company in the nations large and growing lubricant market. The facility has capacity to make 300,000 metric tons per year of lubricants and is Shells eighth in the country. We will continue to invest in upgrading and expanding our existing assets and are committed to building a robust lubricant supply chain here, a Shell spokesman said.

According to consultancy Kline & Co., China represents about 46 percent of lubricant demand in the Asia-Pacific region, which is 43 percent of worldwide demand. Kline projects compound annual growth rate of lubricant demand for in China from 2013 to 2023 will be 6.1 percent for consumer products, 2.5 percent for commercial transport applications and about 2 percent for industrial applications. Shell claims to be the leading foreign lubricant supplier in China with a market share of 12 percent.

Nynas Names Global Market Manager

Nynas has named Gaia Franzolin as its new global Market Manager for the base oil segment. Franzolin will oversee the switch from API Group I base oil to Nynas new product portfolio, Nybase. One of the key challenges will be providing best-in-class support to clients and prospects during the evaluation and the adoption of our Nybase oils, which will enable them to achieve the same, if not enhanced performance, as Group I oils, she said

Prior to joining Nynas, U.K.-based Franzolin held various roles in the field of global strategic marketing with a number of multinational chemical companies, mainly in the plastics, coating and resins industries. Franzolin highlighted Nynas growth plans, including the recent acquisition of a new base oil refinery in Hamburg and its expansion into Asia, as factors in her decision to join Nynas.

Chemetall Acquires Al Finishing Business

Chemetall has acquired the business of Chemal GmbH & Co. KG, based in Hamm, Germany. Chemal specializes in research and development of surface finishing chemicals for aluminum and its alloys with emphasis on anodizing and pretreatment technologies. Chemetall President Joris Merckx said, This transaction will expand our expertise in this market and, combined with strong technical services offered by our wholly-owned subsidiaries around the world, will enable us to further expand our presence in a key market.