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Sun to Set on Mercon, Shine on Mercon V

Ford Motor is preparing to retire its Mercon specification, and wants the lubricants industry to embrace its replacement, the stringent Mercon V spec. Speaking April 4 in Dearborn, Mich., to the SAE Technical Committee 3 on ATF, Gear Oils and Greases, Fords Chintan Ved announced that effective July 1, no new Mercon licenses will be issued. All remaining Mercon licenses will expire on or before June 30, 2007, leaving a clear field thereafter for Mercon V.

Ved, based in Livonia, Mich., is the companys lead development engineer for ATF. He explained that Mercon V more closely resembles the factory-fill ATF which Ford has used for over eight years. It requires the use of a more shear-stable viscosity index improver, and Group II or Group II-plus base oil to meet its viscosity and oxidation targets.

All transmissions recommending Mercon ATF can now be serviced with Mercon V, Ved told the e-newsletter Mercon V is a tighter specification, requiring better antioxidation, antiwear and anti-shudder properties from service-fill ATFs. We are doing this because we want to ensure our customers get the better fluid.

ATF represents about 13 percent of the U.S. automotive lubricants market, with some 197 million gallons sold in 2004, according to the NPRA 2004 Report on U.S. Lubricating Oil and Wax Sales. Mercon V today represents 10 percent of this volume.

That Sinking Feeling

Fourth-quarter 2005 lubricant sales volumes in the United States fell 6.5 percent from the same period of 2004, according to the latest data from the National Petrochemical and Refiners Association. The Quarterly Index on Lubricant Sales report, which was released March 22, also showed sales volumes for all of 2005 finishing 3.2 percent lower than 2004. The market has now shrunk five out of the past six years.

The fourth-quarter decline was led by the industrial lubricant segment, which saw a 14 percent drop in volumes. Sales of automotive lubes slid 5.4 percent, while grease sales were off by 5.8 percent. Demand for process oils dipped 1.4 percent.

U.S. lube demand had grown a scant 0.6 percent in 2004, according to the QUILS report. From 1999 to 2003, the market shrank at annual rates of 3.3 percent, 6.2 percent, 5 percent and 5.4 percent. The market is now 7.9 percent smaller than in 2002, the index year for the survey.

Lyondell-Citgo for Sale …

Lyondell Chemical Co. and Citgo Petroleum Corp. agreed last month to sell the Lyondell-Citgo Refining LP partnership that operates a refinery in Houston with crude oil processing capacity of 268,000 barrels per day. The facility includes a base oil plant with capacity to make 1,000 b/d of API Group II and 3,600 b/d of naphthenic base stocks.

Asked by whether the base oil plant will be upgraded, closed or otherwise impacted by the proposed sale, Lyondell spokesman David Harpole said, There are no plans to make any adjustments in the operations of the refinery. All of the plants base oils and fuels are marketed by Citgo.

The Lyondell-Citgo j.v. was formed in 1993, and it upgraded the refinery in 1997 to process large volumes of very heavy, high-sulfur crude oil from Venezuela.

Hours after the April 6 Lyondell-Citgo announcement, Citgo President and CEO Felix Rodriguez affirmed his companys commitment to its customers and the U.S. energy market, saying, We are not selling our wholly owned refineries or other strategic [U.S.] assets. Citgos Lake Charles, La., base oil refinery has a capacity of 9,500 b/d of Group I stocks.

… and Maybe Cognis, Too?

Cognis Holding Luxembourg, parent company of Cognis, announced recently it has decided to explore and pursue various strategic options, with assistance of investment banks Goldman Sachs and J.P. Morgan. While the company offered no further comment, Plastics & Rubber Weekly reported that two options are under consideration: an initial public offering of shares, and the possible sale of the business to an industry or financial buyer. The sale would include the whole Cognis group, and would include its 50 percent share of Cognis Oleochemicals, the online newsletter reported.

Cognis, headquartered in Monheim, Germany, had sales of Euro 3.07 billion (U.S. $3.77 billion) in 2004 and employs about 8,000 people worldwide. Its current owners are private equity funds advised by Permira, GS Capital Partners and SV Life Sciences.

Cognis Synlubes Technology has production and service sites in Canada, United States, Brazil, Germany, France, Spain, Italy, U.K. and China. Its Synlubes products include the Synative line of synthetic base oils, oleochemicals and additive components; Emgard synthetic lubricants for gearboxes and transmissions, axle oils, air compressors and industrial applications; Breox polyalkylene glycols; and the ProEco line of refrigeration, compressor and transformer oils.

Cargill Plants Foot in Glycerin

Farm products giant Cargill Inc. will have three glycerin plants in Europe and North America by August. The company says the refined plant oils can be used in water-based hydraulic fluids, among other applications.

The first plant, in Salzgitter, Germany, is already operating. A second plant, scheduled to open in June in Iowa Falls, Iowa, will have capacity to make 30 million pounds per year of U.S. pharmacopeia (USP) grade glycerin. The third plant is slated to open in Frankfurt, Germany, in August.

Glycerin is a neutral, colorless, sweet-tasting thick liquid with a wide range of applications such as skin moisturizers, softening agents in candy, and as an antifreeze component in paints and hydraulic equipment. A spokesman said Cargill expects a significant portion of its product to go to industrial applications, and it is working with potential customers to develop lubricant applications in addition to hydraulic fluids.

The Iowa Falls plant will refine crude glycerin produced by a biodiesel plant that is being built at the same location and scheduled to open by May. Those facilities will use oil from soy beans that are crushed on-site. Such upstream integration at the site, said Kurtis Miller, president of Cargill Industrial Oils and Lubricants. will enable us to deliver a stable, consistent quality product affordably and reliably to customers around the world.

Regulatory Hurdles for Food-Grade Lubes?

Food-grade lubricant formulators are facing a challenge to their use of new ingredients: The U.S. Food and Drug Administrations food-contact notification program, which assists in getting products and formulations approved for use in the food-processing industry, is losing its funding. This means future products may be limited to using ingredients that are Generally Recognized as Safe- and GRAS designation for new ingredients, as defined by the Food Drug and Cosmetic Act, can be difficult to achieve, warns toxicologist Richard Kraska.

Still, GRAS determinations may be the only remaining viable and timely option for getting new components of lubricants to be accepted for use in food-processing machinery, Kraska explained to LubesnGreases. GRAS designation requires careful documentation, without which lubricant manufacturers may not be able to get their formulation NSF-certified when it contains a new component not listed by FDA.

To navigate this regulatory thicket, Kraska and Robert S. McQuate have formed GRAS Associates LLC. McQuate serves as CEO and Kraska, a diplomate of the American Board of Toxicology, functions as COO and lead technical consultant in the scientific review of chemicals and ingredients for GRAS status. The company also has selected a team of toxicologists and regulatory scientists that provide the expertise that the law requires in rendering GRAS determinations, Kraska said. We assist clients with information collection and provide timely and well-documented reviews that clients can embrace with confidence.

A 2002 Q&A about GRAS published by the FDA is on line at grasguide.html. For ideas about procedural alternatives for making GRAS determinations and other hints, visit

Lubrizol Divests Again

Additive giant Lubrizol Corp. has sold two more non-core business lines, bringing to five the number of segments it has shaved off since last July. Its food ingredients and industrial specialties businesses will be owned by an affiliate of private investment firm Sun Capital Partners, and its active pharmaceutical ingredient and intermediate compounds business was sold in a leveraged management buyout. Lubrizol did not disclose terms of either transaction. It did say that the active pharmaceutical ingredient and intermediate compounds business anticipates sales revenue of $30 million in 2006.

Larger by far is the food ingredients and industrial specialties segment, which had $400 million in revenue last year. Its buyer, Sun Capital, based in Boca Raton, Fla., is already a behind-the-scenes player in the lubricants industry, having bought white oils supplier Sonneborn Inc. from the former Crompton Corp. last June.

Consultancy Launches

Strategic Resources Inc., a new consulting and marketing research company, has debuted in Lexington, Ky. The company is headed by Larry Solomon, who retired in March after 22 years with the Valvoline division of Ashland Inc. Solomon told LubesnGreases that the company will conduct market research and assist clients to make better and more informed decisions with solid factual market information. His most recent report is an analysis and forecast of U.S. private-sector passenger car and light truck motor oil demand for the next five to 10 years. For a details or a copy, phone (859) 619-7196 or e-mail larry.solomon@

Faces in the News

D.A. Stuart has named Charles E. Santangelo Jr. as president and chief executive officer, replacing Val A. Pakis, who resigned from the Warrenville, Ill., supplier of metalworking fluids and specialty chemicals. Santangelo, who joined the company in 1979, had recently advanced to vice president of operations, and is credited with helping establish Stuarts joint venture in China.

Last month, Raymond I. Wilcox became president and CEO of alpha olefins supplier Chevron Phillips Chemical Co. A vice president of Chevron Corp., he takes over from James L. Gallogly, who rejoined Conoco Phillips as executive vice president, refining, marketing and transportation. ConocoPhillips and Chevron are partners in the chemical company.

Katie Morrone has become technical sales representative for Lambent Technologies, a manufacturer of specialty chemicals for the lubricants and other industries. She joined the company in 2004.

Jerry Wang has been named OEM and industry liaison for Chevron Oronites PCMO business in North America. Wang, who is a Six Sigma green belt and holds a Ph.D. in chemical engineering from Pennsylvania State Univ., most recently was with Cummins Engine Co.

Chemtool Inc. has named Curt Ellison vice president, Metalcote sales. Ellison, who has been with the company for seven years, takes over the position from Barry Fluck, who has begun his transition to retirement but will continue to manage several key accounts through 2006.

Michael McHenry now heads Ciba Specialty Chemicals global market center for engine and transmission fluids. McHenry, formerly with Anderol, is responsible for marketing and strategy development, and for all NAFTA sales of the companys process and lubricant additives. Jean Zappia, who previously held that position, has been named director of purchasing for the NAFTA and South America regions.

STLEs prestigious PM Ku award will be presented this month to John Burke of Houghton International, recognizing his dedicated service to the organization. Burke, an engineer with over 30 years experience, was cited for his contributions to STLEs technical program, its Metalworking Education Courses, and his chairmanship of the task force that developed STLEs new Metalworking Fluids Management certification programs.

Craig Duncan has become general manager, technology, for Chevron Global Lubricants, responsible for all lubricant, grease and coolant technologies worldwide. He previously was the companys vice president, North American lubricants.

American Refining Group has named Zachary J. Nelson to be railroad specialty sales assistant, responsible for developing and managing new accounts in a number of areas, including shortline railroads, military, factory-fill and others. The company also named David K. Schwartz to be private label OEM and retail account manager, focusing on existing and prospective customers in those segments.

Chemical Engineering Partners has tapped George Lamont to be executive vice president and CEO. He brings over 27 years of executive, project, and engineering management experience to CEP, which is the engineering affiliate of California rerefiner Evergreen Oil.

Colonial Chemical has named Robert J. Coots to the position of manager, R&D, for the South Pittsburg, Tenn., company. He will oversee all new product development for the chemical company.

Jana L. Sykes has been named sales representative for the St. Louis, Mo., sales region at Walsh & Associates, a chemical distributor that serves the lubricants, adhesive, sealant and other industries in 25 U.S. states. Sykes previously held positions with Albright & Wilson and Mallinckrodt Chemical.

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