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Does a paradox exist that stifles innovation in lubricant additives – or is it simply the whining of outsiders and mouse-milk peddlers looking to grab business?

Though not always in the same words, its all too common to hear that a paradox exists that inhibits innovation in the lubricant additives business and stifles significant advances in lubricant performance. As a result, some say much of what we see is no more than incremental improvements in existing chemistries that result in only marginal gains in lubricant performance.

So what is this paradox that stymies second-tier players, market hopefuls, private investors and cellar dwellers with innovative additive technology? Does a paradox really exist that suppresses innovation, or is it simply the whining of mouse-milk peddlers, foo-foo dust sellers, and mad scientists looking to spin their stories and make a lot of noise in an effort to grab business?

In the views of many beyond the Big Four additive companies (and even some within), bringing innovative additive technology from the outside into the mainstream is like trying to open an oyster with a plastic fork. Yeah, you might do it, but its going to take a long time and you are going to spend a lot of money on forks trying. Because the first thing additive companies reportedly ask for when you present new component technology is proof of performance.

So off these optimistic business hopefuls go to prove performance. For antiwear additives, most will run such bench tests as the Four Ball, Falex Pin and V-block. For antioxidants theyll turn to differential scanning calorimetry and the Thin Film Oxidation Uptake Test, among others. For detergents, its base and acid numbers, base number retention, the Thermo-oxidation Engine Oil Simulation Test (TEOST), and so on.

Armed with their test results, expert testimonial from PhDs and other information they feel presents compelling evidence of superior performance, the component proponents go back to the Big Four to make their case. But according to some who have been down this path, after what seems like an eternal wait for feedback, they often find their proof of performance is not enough. What the additive companies want next is proof of performance in a fully formulated engine oil.

Herein lies the paradox: Component manufacturers dont typically have the expertise and/or the financial wherewithal to formulate and test engine oils against current, let alone emerging specifications. So what an innovative component supplier needs from the additive company – who is now asking them to prove performance – is a fully formulated engine oil, minus the component which they seek to test (that is, a control). They could then slide in their component, and run engine tests and others to prove performance.

According to many component suppliers, however, the additive companies will not make such a control available. Consequently, the proof the additive companies ask for cant be provided and the request affectively becomes a contradictory proposition – the paradox. Those who believe they have unique chemistries say this paradox inhibits innovation. Some go further, saying its a deliberate roadblock set up by the major additive suppliers to protect their position in the market and prevent existing technology and manufacturing capacity from being put at risk.

Rather than debating the legitimacy of such allegations, or the retorts that these are nothing but the words of conspiracy theorists, lets think about it. Why should a major additive company provide such a control? What rights do technology hopefuls have to freely experiment with and leverage the additive manufacturers intellectual property, decades of expertise, hundreds of millions of dollars invested in basic and applied research, product development, technical service and product support?

Moreover, you can be sure a major additive supplier isnt in fact eager to idle what may be 250,000 tons of global capacity, especially when these assets are fully depreciated. Nor is it highly motivated to invest in new and risky manufacturing technology for a slow-growth market where there are low returns on capital investments, global uncertainties with regards to the availability of raw materials, high R&D costs, and regulatory clouds on the horizon.

Because at the end of the day, maybe the real reason the major additives companies are hesitant to work with innovators is because someone is going to have to cough up $3 million or so to run the required fired engine and field tests to prove performance. Are the innovators willing to put that money at risk? Or are they expecting the major additive suppliers to do it, once a control is provided?

So maybe a paradox that inhibits innovation does exist in the additives business. Then again, maybe it just seems to be paradoxical, and what we are hearing in reality are the sounds of innovators reluctant or unable to put their money at risk to prove performance, or who have not yet found a way to work equitably with the major additive suppliers to address their objections, business interests and the market realities.

Because you can be sure the additive companies, lubricant manufacturers, OEMs, EPA and consumers are interested in any engine oil additive technology that demonstrates differentiable and cost-effective performance.

And much like we witnessed with base stocks in the 1990s, you can be sure the additive companies are well aware that a step change in technology (even when there is deeply entrenched manufacturing capacity) can occur in our industry. And when it does there will be some big winners and some big losers.

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