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Publishers Letter

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In June I visited Malaysia (all too brie?y – I found it beautiful, fascinating and friendly), where I attended the ?rst ICIS Asian Base Oils & Lubricants Conference in Kuala Lumpur and toured the Petronas base oil plant under construction in Melaka. As conference co-chair Stephen Ames of SBA Consulting noted, Asia is the focal point for the lubricants and base oils markets. This is where its happening. Asia is already the worlds largest base oils and lubricants market, he stressed, and it will demand larger shares of both markets over the next ?ve years.

Consultant Suzan Jagger gave an intriguing presentation on the challenges to making money in China in the lubes business today, describing the marketing, distribution, competitive and supply hurdles in that booming market where pro?tability often lags. Every major oil company would love to acquire a successful independent blender and distributor like Beijing Tongyi, as Shell did in 2006, she noted, but there was only one Monarch. Nippon Oils Iwao Takata gave an overview of Japans mature market, where re?ning capacity continues to decline, Group I base stocks are in surplus and blenders are hungry for Group III.

Dai Fuming of Dongfeng Motor Co., Chinas third-largest automaker by volume and number one in commercial vehicles, told conference attendees to expect more than 8 million vehicles to be sold in China this year, climbing to 10 million by 2010. From an OEM perspective, Dai decried the poor quality fuels and lubes that are common, and described the standards his ?rm and others are setting to require improved lubricants to protect their vehicles.

Conversations in the lobby swirled around which announced re?nery expansions might be in trouble. Presentations by Sinopec, SK, Lubrizol, In?neum, Chevron Lummus, Nynas, Vopak and others were packed. If youre in the base oils business, I recommend you take a look at upcoming ICIS base oils and lubricants conferences: Dubai in October, New York City at the end of November, and London in February 2008. Personally, I hope ICIS returns to Kuala Lumpur next June. Id love to go back.

Correction

Our 2007 Guide to Global Base Oil Re?ning, distributed with Junes print edition, gave wrong data for GS Caltexs upcoming base oil plant in Yeosu, South Korea. The facility will have capacity for 12,000 barrels a day of Group II and 3,000 b/d of Group III.

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