Market Topics

Spinning Gold from Titanium


Aiming to cut a larger slice of the heavy-duty engine oil market, ConocoPhillips has unfurled the biggest lubricants product launch of its six-year existence. Liquid Titanium heavy-duty engine oils – developed in secret and kept under wraps for more than a year – are premium, synthetic-blend offerings from its Guardol ECT and Kendall Super-D XA brands. The API CJ-4 category oils are now rolling into distributors warehouses and out the doors to commercial customers around the United States.

The lubricants company is supporting the SAE 15W-40 oils with a unique claim for wear protection, sharpened marketing tools for distributors, a redesigned website and an engaging advertising campaign. Throw in a price that is unchanged from before, and its no wonder that most of its jobbers are responding with enthusiasm.

Vince Liggio, sales manager at Pumpelly Oil in Lake Charles, La., is among those who view the new oils with glee. Its getting a really good response with everyone here, he told LubesnGreases. Our salespeople are always excited to get a tool that gets them back in front of customers. Its good to have something to show new customers and existing customers too.

Conoco also got a copyright on using Liquid Titanium for the next few years, he added. That leaves a good window for us to pull ahead, versus [Shell] Rotella and [Chevron] Delo 400.

It took a lot of time and effort to get this far, reflected Steve Tarbox, in an exclusive interview just before the products unveiling in February. Weve invested time, effort, people at all levels, and a more comprehensive strategy. It has been six years since the Conoco-Phillips merger, and this is the biggest launch since then. It involves changing the packaging, the product makeup, communications and marketing – and also we had to keep it all quiet until now.

We always thought we had strong products, continued Tarbox, who is director of product management at ConocoPhillips Lubricants in Houston. But a couple years ago we did benchmarking of our lubricants stream. We looked at 12 features and matched ourselves against the leading heavy-duty brands.

That benchmarking showed that in many performance areas, including viscosity, corrosion control, pumpability and soot-handling, the Guardol and Kendall top-tier products edged out the competition. But, Tarbox acknowledged, as strong as we were, there was kind of a debit on brand recognition. We realized we needed more pizzazz around our products. So one and a half years ago we began working on the Liquid Titanium technology. We were very impressed with what it can do.

The patented Liquid Titanium technology, from Richmond, Va.-based Afton Chemical, is exclusive to ConocoPhillips in the heavy-duty engine oil arena. The tough-sounding liquid additive actually contains no solids or molten metals, but is a homogeneous solution; theres nothing solid to drop out of suspension.

Liquid Titanium is a surface-active agent, which chemically binds to metal surfaces, explained Tarbox. And unlike ZDDP, the backbone antiwear agent in most engine oils, Liquid Titanium has no sulfur, metal ash or phosphorus that can harm emissions systems. Still, the plan is for Liquid Titanium to supplement ZDDP in these oils, not go it alone. This is a performance-plus program, Tarbox stressed, and using both additive components makes that possible.

Testing demonstrated that Liquid Titanium boosts the antiwear performance of heavy-duty engine oils, as shown in the Cummins ISB valvetrain wear test, where the product did 15 percent better than competing premium-tier oils on cam lobe wear and 48 percent better on crosshead wear, ConocoPhillips said. The company attributes these gains to the presence of the titanium-containing liquid additive in engine wear zones, where it deposits a layer that helps prevent the metal-to-metal contact that may occur through the oil film.

After engine testing, we were able to detect titanium deposits on the critical points in the engine such as tappets and cam lobes, reported Reginald (Reggie) Dias, director, commercial products, and thats what we credit with there being less wear.

Guardol ECT and Kendall Super-D XA are both made with a combination of Group II-plus base oil and a significant volume of synthetic component, Dias said. For now, Liquid Titanium is reserved strictly for these premium-tier products, the mainline tiers wont have it.

In addition to having API SM/CJ-4 licensing and over 1.5 million miles of road testing, the new oils have earned top approvals from Mack, Cummins, Caterpillar and Detroit Diesel, he said. We also did the API SM category tests, such as the Sequence IVA Nissan engine test, where about a 45 percent reduction was seen in intake cam lobe wear, and the Sequence VIII test for bearing weight loss due to corrosion, which was reduced about 9 percent.

A third benefit, Dias pointed out, is the products improved oxidation control and thermal stability. That should contribute to longer drain intervals – an appealing proposition for many fleet operators.

With a premium product on the workbench, the company also needed to hone its market attack. That effort was aided by research and focus groups. The results showed that titanium had a fantastic reputation in the market, but the idea of using a metal in the engine had its drawbacks, said Marshall Cohen, brand management director. We added the word liquid to overcome that.

Strategizing stepped up in early 2008, when ConocoPhillips mapped out the products debut and created advertising and marketing plans. We secretly worked on Liquid Titanium, then rolled it out at our November 2008 marketing conference and created a lot of excitement, Cohen related. Then finally it was late January and time to roll it out publicly.

One of the biggest selling points, Cohen stressed, was that the cost for the Liquid Titanium duo would be the same as the premium Guardol and Kendall products without titanium. Why not charge more? We want to grow the business in a tough economic time, and we didnt want price to hold us back, replied Tarbox. When we announced that at our November meeting, we got a big round of applause from our marketers.

Getting to this point was not a stroll. Were the fourth-largest lube supplier in the U.S., and Number 4 in the diesel oil market, Tarbox said. Plus, there were four branches to manage at the time of the merger – Conoco, Phillips 66, 76 Lubricants and Kendall – and it was a burden with all the products and names we had to manage. To solve this, the company slowly gravitated to a tri-brand approach. Kendall aside, most of its heavy-duty commercial lubricants now carry the other three logos together – which is a bit crowded but greatly simplified manufacturing and distribution.

Ever since Conoco and Phillips merged theyve had these four big brands, commented Todd Darr, head of business development at Interstate Petroleum, a full-line ConocoPhillips marketer in Godfrey, Ill. They rocked the whole passenger car engine oil side, going after car dealers and repair shops and independent garages. One of the great things is theyre vertically integrated, from base oil to technical and research to products. They have the transport logistics available for their base oils, with S-Oil Group III and Paralubes Group II, and the merger actually has worked.

The oil giant also understands value, he said, which is essential in the cut-throat, low-margin commercial market. They dont beat their chest, dont make a lot of noise, but they focus on products and applications. So we see good pour points, good pumpability and good shear stability with their synthetic blends.

Darr feels Liquid Titanium is getting an excellent brand launch. This product will be well differentiated, and there is a need for it now, especially with aftertreatment devices on trucks. I feel confident that titanium is an excellent product. Theres data, webinars and brochures that show it, and theyll be a powerful force. Maybe they wont knock Delo, Rotella or Delvac off their pedestals, but its going to have an effect, especially for customers who are focused on value.

Mark Mitchell, president of Coast Oil in San Jose, Calif., which blends private-label lubricants and distributes 76 Lubricants to commercial and industrial customers, was more cautious about the new products prospects. He was just learning about the Guardol ECT and Kendall Super-D Liquid Titanium products when he spoke with LubesnGreases in late February, and waiting to hear more from ConocoPhillips.

Delo controls the West Coast, Mitchell said, and this is a tough time to introduce a new product. In our world, everyone wants down-and-dirty pricing on an API spec product, mostly CJ-4. My best salesman came in today and told me, Weve got loyalty, but at a price.

Despite the rough economy, Interstates Darr is more upbeat. We like that with ConocoPhillips youre getting a synthetic blend for the price of a mineral oil. That alone was a good deal – and now theyre adding this Liquid Titanium too, he enthused. Plus Kendall has an excellent heritage. Prices are falling now at last, which could also help Guardol. The price weve got is underneath another majors second-tier product. We may be able to go after the heavy-duty installers now, too, which traditionally have stuck with Mobil and Rotella.

People in a pinch want to save money, and they have time to talk with us now, said Pumpelly Oils Vince Liggio. His company serves the logging, construction, and over-the-road trucking industries – all seeing slower demand, he conceded. But even in this economy, I find people want something that will help them do things better, to savemoney. And with this product, they can have extended drain intervals if they do used oil analysis. For fleets, oil changes can be a big cost because big rigs can use as much as eight gallons of oil apiece.

If thats the kind of patter that Tarbox and his team were hoping to generate, theyve succeeded. Getting customers talking – that will be a a greater measure of success.

Related Topics

Market Topics