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Afton Bags Polartech

Afton Chemical last month planted a bigger foot in the industrial and metalworking fluid additives arena, acquiring Manchester, U.K.-based additives maker Polartech. The deal, for an undisclosed amount, includes all of Polartechs physical assets, including its U.K. headquarters, research and manufacturing facilities, plus plants in the United States and the growth markets of India and China.

Polartech, with annual revenue of about $45 million, grew rapidly over the past five years. It opened a plant in Hyderabad, India, in 2006, and in 2007 bought the Actrachem brand of additives and the Georgia-Pacific Chemicals plant that makes them in Bedford Park, Ill. Next, in 2008, it opened a $20 million additives manufacturing plant in Suzhou, China.

There are no plans to close any of the Polartech sites, Afton global business manager Brent Brennan said. He noted that Polartechs metalworking fluid additive offerings have minimal overlap with Aftons, and include specialized water-based products. Afton, which is headquartered in Richmond, Va., said it will take on 130 full-time Polartech employees, as well.

Base Oil Output Fell 12%

U.S. refiners cranked out just under 30 million barrels of paraffinic and naphthenic base oils in the second half of 2009, according to the federal Energy Information Administration. Thats a marked improvement over the 25 million barrels produced in the years first half, but still the weakest showing since the early 1990s.

For 2009 as a whole, domestic base oil output was just 55.4 million barrels – off 12 percent from 2008. The years total included 46.3 million barrels of paraffinic base oils and 9.1 million barrels of pale oils.

Based on research into plant capacities, LubesnGreases estimates that operating rates in 2009 averaged about 76 percent for U.S. base oil refineries. That doesnt surprise me, that operating rates were so low for the year as a whole, commented Jamie Brunk of Solomon Associates in Dallas, which does benchmark studies of refinery performance. In 2008, when the economic crisis hit in October and November, plant operating rates went way, way down. Refiners had to cut back, he pointed out, since no one was buying.

A year later, particularly by the fourth quarter of 2009, he added, the recovery began to firm up, and demand rose, plus we saw people needing to refill their base oil inventory and restock their warehouses.

The demand picture has continued to brighten in first quarter 2010, sources agreed. The first quarter was decently O.K., and crude and base oil prices were able to go up, commented Gerry Jackson of marketer Renkert Oil in The Woodlands, Texas. The spring pickup in demand is going to happen -thats not a matter of if, but when. Asia-Pacific is seeing some demand, and so the U.S.-to-Asia Pacific trade could see some increased activity, too.

Now the big question is, what will the second quarter do?

Chevron Cuts Downstream

Chevron last month outlined plans to whittle its downstream business, eliminating 2,000 jobs this year and putting some European assets on the block. No specifics were offered on how the changes may affect the companys lubricants operations or base oil refining at Richmond, Calif., but the cuts represent about 12 percent of Chevrons downstream employees worldwide.

A previously announced expansion at Chevrons Pascagoula, Miss., refinery, which would add a 25,000 b/d base oil plant there, continues to be in the companys plans, according to Chevron spokesman Sean Comey. The project, with estimated completion in 2013, is expected to supply API Group II base oils to North American, European and some Latin American markets.

Valero Mulls Paulsboros Fate

Officials with Valero Energy say they may seek a buyer for the companys Paulsboro, N.J., refinery, which has capacity to make 11,000 barrels per day of API Group I base oil. A spokesman told the online newsletter Lube Report that the company is exploring strategic options for the refinery, with a sale being one option. Valero is in the process of streamlining and pruning its refining operations, he added.

Valero originally acquired the Paulsboro refinery from Mobil Corp. in 1998. We think its a viable refinery that can be sold as-is, Gene Edwards, executive vice president for corporate development and strategic planning, told analysts in a Jan. 27 conference call. Weve got some strategic interest, so well just have to see how it plays out.

$16M Grant for Hydraulics Research

The National Science Foundation in February announced it was awarding the Center for Compact and Efficient Fluid Power a four-year, $16 million grant, enabling the center to continue its work in fluid power research and education. CCEFP already has four test beds and more than 20 projects under way, focused on increasing the efficiency of fluid power, expanding its use in transportation and elsewhere, and training the next generation of engineers. It also provides forums where industry and academia can exchange ideas and research strategies.

Headquartered at the University of Minnesota, Twin Cities, CCEFP works with six other universities plus 57 industry partners. For details of its research, inventions and technical publications, visit

GS Caltex Aims at India

Chasing new markets for its products, South Korean base oil refiner and lubricants marketer GS Caltex will invest $2.6 million to launch a finished lubes business this month in India. The new venture, GS Caltex India, will be based in Mumbai. It comes hard in the wake of an agreement between Korea and India to promote trade between the two countries by cutting tariffs on lubricants and other products.

The Korean company said it chose India because it aims for exports to become more than 50 percent of its lubricants business by 2015, and because Indias lubricants market is the worlds fifth largest at $3.5 billion a year.

U.S. Gear Market to Grow

U.S. demand for gears and gear assemblies is forecast to increase 3.9 percent per year, to $30.1 billion in 2013 – a considerable improvement from the less than 1 percent annual growth seen from 2003 to 2008. Boosting the markets value will be automotive upgrades, such as transmissions with higher numbers of speeds. Increased sales also will come from the small but rapidly expanding wind turbine market, which needs large, high-value gearboxes. These and other trends are presented in Gears, a new study from the Cleveland-based research firm Freedonia Group.

The fastest gains of any gear market will come from the motor vehicle segment, the study says, advancing 4.7 percent per year. Although transmissions, power accessories and four-wheel drive vehicles all should spur growth, there are countervailing trends from continuously variable transmissions and drive-by-wire technologies; neither of these use gears, the study notes. By gear type, helical and bevel gears will register the strongest gains, Freedonia predicts. Helical gears, for example, will continue to displace spur gears in a number of applications.

Gears (229 pages, $4,700) is available now. Website: www.freedonia

Castrol Sells Toronto Plant

Wakefield Canada has agreed to purchase Castrol Canadas blending and packaging plant in Toronto from BP Lubricants USA. The deal calls for Wakefield to assume ownership and manufacturing responsibility, and to blend and package most Castrol products for the Canadian market. Wakefield, which started as a Castrol distributor in 2005, will have exclusivity for sales, marketing and distribution of Castrol consumer and commercial lubes in Canada.

BP Lubricants plans to retain ownership of the assets during a transition period, and then Wakefield will take the reins, probably around midyear 2010. The Toronto plant has an estimated capacity of 150,000 metric tons per year, and employs 40 to 50 people, most of whom are expected to join the Wakefield organization. Cost of the acquisition was not disclosed.

Navy Aids Nano-lube Research

The Office of Naval Research has awarded a contract for approximately $770,000 to NanoMech LLC to complete development of a nano-structured, extreme-pressure lubricant additive called NanoGlide. The Navy believes NanoGlide will help it increase durability and improve energy efficiency. NanoMech has an exclusive license to commercialize the technology, which originated from research at the Univ. of Arkansas.

Parkland Buys Bluewave

At the end of January, Parkland Income Fund acquired Bluewave Energy L.P. for Canadian $214 million (U.S. $206 million). Bluewave is Shells largest branded distributor in Canada, delivering lubricants, diesel fuel, gasoline, heating oil and related products and services to commercial, industrial and residential customers. Last year Bluewave had total sales volume of 645 million liters. Red Deer, Alberta-based Parkland said the acquisition gives it a delivery network and sales in all Canadian provinces except Newfoundland.

Faces in the News

Philipp Junge has been named global head of the lubricant oil additives division of Rhein Chemie Rheinau GmbH in Mannheim, Germany. Most recently head of strategic development for rubber and rubber additives at Lanxess, Rhein Chemies parent, he took over Jan. 1 from Dr. Joachim Korff, who is retiring. Junge joined Lanxess in 2008 with a background in management consulting, and holds a bachelors degree in economics and a masters in international relations.

Ergon Inc. has appointed Jimmy Rasco as vice president, global base oil technology. A chemist who joined Ergon in 1994, he has 35 years of petroleum refining experience, including 20 years with Amerada Hess. In his new role, Rasco is responsible for global product support and technical marketing of naphthenic and paraffinic base oils.

Automotive maintenance product and equipment manufacturer BG Products has named Darin Greseth as president, effective this month. Greseth started with BG as a sales rep in Denver in 1984, and went on to form his own BG distributorship, Premaco Michigan. A BG director since 2007, he will relocate to its headquarters in Wichita, Kan., this spring.

Evonik RohMax Additives new European sales manager is Uwe Brueckner, responsible for Europe and the Near and Middle East regions. Brueckner joined RohMax in early 2008, after working at Aventis and Germans Kuraray Specialities (formerly Clariant). He holds a chemistry degree from the TU Darmstadt.

RohMax also named Matthias Fischer as business analyst, reporting to Managing Director Norbert Westerholt. Fischer has been with RohMax since 2002, and holds a doctorate in physical chemistry from the Max Planck Institute. His successor as manager of global process development is Peter Moore, who joined RohMax in 2002 and has worked there in both product development and process engineering. An expert in rheology, Moore holds a Ph.D. in chemical engineering from MIT.

At its recent annual meeting, NLGI-India presented Anoop Kumar, Ph.D., with its Long Service Award, honoring his work to establish and advance the technical society since 1997. Formerly with the R&D Centre of Indian Oil, Kumar now is with Royal Manufacturing in Tulsa, Okla. In addition to the service award, he received the PPC Gonsalves Award for 2010 for the best paper presented during the January meeting in Goa, India.

Colonial Specialty Chemical, a distributor serving the metalworking and industrial marketplace, has added April Stevens as regional sales manager for the Eastern region. She brings over 12 years of lab and sales experience and formulation knowledge to the Tabernacle, N.J., firm, and has worked for Dover Chemical, Rhein Chemie and most recently Palmer Holland.

Lintech International has promoted Charles Churn III to product manager for additives. He joined the Macon, Ga., specialty chemical distributor almost 10 years ago.

Van Horn, Metz & Co., which distributes raw materials, has named H. Morgan Smith as chairman, Barrett C. Fisher III as President, and Brian Boorman as executive vice president. The moves will assure the succession plans of the corporation, said the Conshohocken, Pa., firms board of directors.

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