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SPECIAL REPORT: Shining a New Light on Bright Stock


Ergon, Shining a New Light on Bright Stock

Leslie B. Lampton founded Ergon Inc. in 1954 and built the company on a foundation of petroleum-related enterprises. Ergons long-term commitment remains in strategic investments that ensure their ability to meet customers present and future needs. The organizations proven expertise in manufacturing, coupled with their extensive access to secure crude supply, has allowed them to anticipate market trends and respond effectively. With nearly U.S. $1 billion in investments in process improvements over the past 15 years, Ergon is well positioned to meet the needs of the specialty markets.

In 2016, Ergon will complete a Crude Unit expansion, a Hydrotreating Process Improvements Project, and a new Process Operations Center. These investments are in alignment with their clear vision of being The Trusted Global Leader in Specialty Base oil. Following the most recent process enhancements at their Vicksburg, Mississippi, United States, refinery, Ergon now stands as one of the most prominent bright stock suppliers worldwide.

The Production Gap.

Production of high-viscosity base oil products continues to decline on a global scale. This trend emerged due to changes in finished lubricant technologies, driven by automotive efficiency and emissions regulations, resulting in significant expansion of modern API Group II and Group III base oil capacity. The resulting supply overhang of low production cost Group II and Group III base oils threatens the viability of higher production cost Group I refineries and associated bright stock production capacities. A detailed analysis of the industry shows that since 2016, approximately 22,000 barrels per day (1.1 million tonnes/year) of bright stock capacity was eliminated. This represents nearly one-third of current market demand, according to a 2015 Kline & Company report.

Addressing the Gap.

Ergon is introducing new products designed to fill this gap in production and meet the needs of the global market. Most recently, Ergon debuted HyGold 5000BS, the newest in Group I bright stock technology. Ergons proprietary refining technology yields a unique combination of high viscosity, low pour point, low odor, superior color and outstanding appearance. HyGold 5000BS is suitable for use in a wide range of applications where viscosity, color and appearance remain critical.

Ergons HyGold 5000BS not only fills the gap created by the decrease in bright stock production but also provides advantages over other high-viscosity alternatives. HyGold 5000BS provides three key advantages:

It allows formulators to produce ISO 680 and 1000 viscosity grades without using expensive high-viscosity components such as polyisobutylene.

It allows formulators to lower the treat rate of bright stock in their medium- to high-viscosity formulations, which given the current bright stock market conditions, results in a lower cost-of-goods for the finished product.

It provides outstanding color and appearance compared to traditional bright stock products.

Ergon remains delighted with the preliminary test results from the more than 125 customers working hard to take advantage of the new HyGold 5000BS, said Lance Puckett, Ergons senior vice president – global lube sales. In all cases, test results show no harm in applications, including greases, marine engine oils/cylinder lubes, high-viscosity/monograde engine oils and industrial gear oils, among others.

He added, Word of the new product continues to spread, and we remain pleased with the markets interest and feedback. HyGold 5000BS performs exceptionally well in comparative bright stock application testing. We see great excitement for numerous reasons. Obviously, new, large-scale production of a critical product attracts attention, but secondly, and maybe more importantly, HyGold 5000BS increases formulator flexibility while simultaneously lowering the bright stock treat rate and finished formula cost.

Customers and Partners.

The base oil industry remains unique in that very strong relationships exist between suppliers and customers. Ergon attributes much of their success to customer relationships. These relationships facilitate an effective product-development arc. Engaging valuable business partners ensures that new product development incorporates market application research and end-user feedback thereby expediting market acceptance.

The Lampton family instilled into Ergon and all of its employees a culture focused on customer needs, said Jay Coleman, Ergons director of sales – base oils. Our efforts center on ensuring our customers success, which remains the cornerstone of our success.

Industry Leadership.

Ergon fills the voids where many producers choose not to invest. Much of their efforts focus on solvency and viscosity-centric products for specialty applications. The companys efforts to understand market and applications needs position it well to support customer sustainability.

To achieve success in todays market, we have to do more than provide a great product; we must create a comprehensive service offering that includes application expertise, explained Tim Langlais, global technical marketing manager – base oils. At Ergon, we understand the nuances of how our products affect the applications in which they are ultimately used. This allows development of sustainable, value-added solutions for our customers.

Customers face constant change due to regulations and the business environment as a whole. Ergon strives to understand on a deeper level their customers operations, associated challenges and the best paths through those challenges. They recognize the need to be innovative with both service and products while investing in infrastructure and solutions-delivery processes. For example, the companys expanding global supply chain ensures customers are supported worldwide.

Ergons success results from our focus on providing business solutions, not just product delivery, said Lance Puckett, senior vice president – global lube sales. Our team proactively identifies and addresses our customers business challenges.

With more than 2,300 employees and a network of refineries and terminals around the world, Ergon remains a family company. Three generations of the Lampton family continue to work in various segments of the company.

As the worlds leading specialty base oil producer, Ergon operates two refineries in North America, one in Newell, West Virginia, and one in Vicksburg, Mississippi. With a system-wide base oil capacity of 28,000 b/d, the refineries produce Group I, Group II and naphthenic base oils that are used in industrial lubricants, tires, grease, chemical processing, metalworking fluids and many other applications. In addition to serving as a sophisticated crude oil processor, transporter and marketer of refined products, Ergon also produces and markets specialty asphalt products, manufactures state-of-the-art road maintenance products, and is active in oil and gas exploration and real estate development.

Global Footprint.

Transporting petroleum products represents a critical component in Ergons service offerings. The companys transportation and terminaling subsidiaries provide service and support to Ergon operations and third-party customers. Maintaining river, road and rail transportation resources along with numerous terminal locations and pipelines ensures the organizations ability to safely deliver products. This comprehensive service and support offering enjoys an industry-leading safety record.

Ergons global footprint includes a large terminal in Antwerp, Belgium, which supports not only the European Union markets but also most of the Mediterranean, the Middle East and Africa. Supply to Latin America flows through Ergons export hub in Deer Park, Texas or directly from Ergons North American terminal network.

More recently, Ergons global customers encouraged the company to improve availability and service in the Asian region versus importing via the Antwerp and Houston terminals. A new terminal in South Korea and a regional sales and distribution office in Singapore demonstrate the companys commitment to the region. From early 2017, regional storage and a resident team expect to facilitate growth up to forty percent over the next ten years.

Leadership and Customer Service.

A sixty-year track record of success demonstrates Ergons commitment to unique and innovative solutions. The cornerstone of the companys mission is a commitment to relationships with current and future customers, coupled with corporate values of trust, character and integrity.