Market Topics



Fast-lubes Resurging?

The U.S. population of fast-lube outlets appears to be edging up, after three years of decline. According to the 2011 Tops in the Industry Ranking, published by National Oil & Lube News, a total 16,716 are in business around the country, up 185 stores from a year ago. The Lubbock, Texas-based trade publication projects that sales of lubricants at fast lubes and other oil change providers will surpass $9 billion this year, a gain of $100 million over 2010.

In terms of rank, Shell Lubricants Jiffy Lube chain was still astride the fast-lube market, with 1,963 stores at the end of February. The next-largest outfits were Valvoline Instant Oil Change, with 872 outlets; Pennzoil 10-Minute Oil Change, also owned by Shell, with 750; Kwik Kar (390); and Havoline Xpress Lube (350). Parent company Chevron rebranded the Texaco Xpress Lube stores last year as Havoline locations.

The research indicates fast lubes now can lay claim to 30 to 35 percent of the installed market, due partly to the declining ranks of new-car dealerships. Other key trends it sees include a buying spree among major franchise owners who are being fueled by private-equity dollars as they snap up rival chains, and further growth in installed lube sales at oil change-plus stores, which get most of their revenues from activities other than oil changes. Examples include Walmart, Bridgestone, Goodyear and Midas repair shops.

The complete 2011 Tops in the Industry study is available from NOLN for $75. E-mail Misty Dolan at to order, or visit

Lubrizol: Big Payday for Some …

Lubrizol CEO James Hambrick could receive up to $97.4 million through stock options and other equity as Berkshire Hathaway acquires the specialty chemical company, according to Lubrizol SEC filings. On March 14, the two announced that Berkshire Hathaway would acquire 100 percent of Lubrizol for $9.7 billion, $135 a share.

In a preliminary proxy, Wickliffe, Ohio-based Lubrizol said the stock incentives for 16 other executives could total $51.2 million. They include Charles Cooley, senior vice president and CFO, and Stephen Kirk, senior vice president and COO, with $9.1 million each; retired corporate v.p. and general counsel Joseph Bauer ($5.6 million); and Dan Sheets, corporate vice president and head of Lubrizol Additives ($2.6 million).

The company is due to issue its first-quarter 2011 report on April 27, after this issue goes to press.

… Awkward for Others

Berkshire Hathaway executive David Sokol, who personally purchased nearly 100,000 shares in Lubrizol before its acquisition by his company, resigned March 28. The dealings clouded the investment firms triumph, especially because Sokol was credited with urging the Lubrizol deal on Berkshire CEO Warren Buffett in mid-January.

Asserting that Sokols Lubrizol stock purchase was in no way unlawful, Buffett detailed the departed executives involvement and subsequent resignation in a March 30 statement. According to Buffetts outline, Sokol mentioned in his first approach on Jan. 14 or 15 that he owned stock in Lubrizol. Actually, Sokol held 96,060 Lubrizol shares, purchased for around $9.9 million in early January. When Berkshire moved to offer $135 per share, Sokols shares instantly became worth almost $13.3 million.

Lubrizol CEO James Hambrick told employees in a letter that the matters discussed in [Berkshires] press release do not in any way alter the terms or the timing of our proposed transaction with Berkshire Hathaway. He said Lubrizol continues to see the merger closing in the third quarter.

Chemtura Boosting PAO, Antioxidant Output

Chemtura is undertaking debottlenecking at its Elmira, Ontario facility in order to boost production of 40 and 100 cSt poly alphaolefins. Some increased capacity was due by the first quarters end, and the remaining work will be completed in 2011s second quarter, said the company. Chemturas PAOs, branded as Synton, are high-viscosity, highly saturated polymers used in automotive and industrial applications, and find applications as both base stocks and as viscosity modifiers for high-performance lubricants such as gear oils and greases.

The chemical company also said it will increase production of Naugalube 438L alkylated diphenylamine (ADPA) liquid antioxidants, at both the Elmira plant and in Latina, Italy. That capacity was due onstream by the end of first-quarter 2011.

Solvay to Buy Rhodia

Belgian chemical company Solvay agreed last month to buy Rhodia for $4.8 billion (3.4 billion), uniting two global manufacturers whose products include lubricants, greases and metalworking fluid additives. The cash offer of 31.60 per share for Rhodia was launched in France and will extend to the United States. Pending regulatory approvals and other conditions, closing is expected by late August.

Products from Rhodia include antiwear and extreme-pressure additives, corrosion inhibitors, emulsifiers and surfactants. The French company also makes wet steel cord drawing lubes, mainly for the tire industry, and oxygenated solvents, while Solvays products include fluorinated fluids, lubricants and grease.

Total Invests in China

Total will invest $42.3 million (30 million) to build a 200,000-metric-ton-per-year lubricant blending plant in the Chinese northern coastal city of Tianjin. Total (Tianjin) Manufacturing, a new subsidiary, will own and operate the facility, due to open late next year.

The new investment in Tianjin marks a strategic move to expand Totals existing lubricant manufacturing in Guangzhou and Zhengjiang in Jiangsu, to cover the high-potential provinces in north and west of China, said Thierry Pfimlin, Total Refinings senior vice president for Asia Pacific.

Making a full range of automotive and industrial lubes, as well as greases, this will be one of Totals biggest plants in the region; it will also serve export markets, a spokeswoman noted. Paris-based Total has 30 subsidiaries and 4,000 employees in China, where it has been present for 30 years.

Truck Stops Pick Kendall

ConocoPhillips, which boasts of being the fourth-largest U.S. lubricant supplier, has signed with Pilot Flying J to make its Kendall synthetic-blend passenger car and heavy-duty motor oils and Kendall Classic transmission fluid available in the truck-stop chains 550-plus locations nationwide.

To bring attention to the new offerings, Pilot Flying J is making available substantial shelf space, and is promoting the availability of Kendall motor oils and lubricants through in-store displays and shelf talkers. All the Kendall synthetic-blend passenger car and heavy-duty engine oils will include its exclusive Liquid Titanium additive, which provides improved fuel economy while offering enhanced engine wear protection.

Base Oil Flows in Serbia

Naftna Industrija Srbije (NIS) has begun streaming paraffinic base oil from its refinery in Novi Sad, Serbia. NIS, a subsidiary of Russias Gazprom Neft, said it hopes to establish a unit for production of naphthenic base oils there as well, if it can find foreign investors for the project.

The Novi Sad facility began initial base oil production in late February. NIS declined to disclose the plants current capabilities or estimate when it will reach full capacity, but plans are for base oil output to reach 100,000 metric tons per year (2,000 barrels per day). Ninety-seven percent of the output is destined for export to Asian markets; only 3 percent will remain to serve the domestic market, said CEO Kirill Kravchenko.

Deal to Propel Biobased Synlubes

Amyris has struck a deal with Appleton, Wis.-based U.S. Venture for North American marketing and distribution of finished lubricants that use Amyris synthetic renewable base oils.

The partners anticipate that U.S. Venture would contribute its existing regional lubricants blending and marketing business, known as U.S. Lubricants, while Amyris will bring access to a supply of its proprietary Biofene base oils and formulations. Biofene base oils are created from plant-based hydrocarbons, says Amyris, and the Emeryville, Calif., company is working to develop a complete line of high-performance, renewable industrial lubricants with low toxicity and high biodegradability. To be introduced this year, these include hydraulic, compressor, turbine and gear oils, and 2- and 4-cycle engine oils.

Chicago Home for Japanese

Chemicals Last month saw the beginning of operations for Kyowa Hakko Chemical Americas, a carve-out from Japans Kyowa Hakko Group. Based in Schaumberg, Ill., the company will focus on offering a range of specialty chemical products including synthetic fatty acids, specialty diols, functional monomers and other high-performance chemicals, said Jiro Suezawa, its president. Lubricants are among the many industry categories where these products are used.

Clark Woos Korean Metalworkers

With an eye to expanding its presence in Asia, Cleveland, Ohio-based metalworking fluids supplier Clark Oil & Chemical has appointed Green Plus as its exclusive distributor for the South Korean market. Green Plus, with offices in Seoul, will supply Clark Oils metalforming, tubing and metalworking fluids to Koreas heavy industries, with initial emphasis on reaching OEMs who build mine implements, energy equipment and automotive vehicles.

Clark, formed in 1912, also has marketing partners in China, India and other Asian countries, added Robert Stepan, industry manager for new product development. Among its brands are CoChem, Vulcan, Clark and Baker & Gubbins Tubing Lubricants.

Growth Spurt Forecast

Petroleum Chemicals says it is expanding its Houston operation to become its primary order entry point and to support recent and anticipated growth. The chemical supplier has seen total order volume double since opening the Houston office, said company president Bob Scheetz in Sacramento, Calif., and sales are expected to reach $5 million this year.

With offices also in San Francisco, Denver and Richmond, Va., Petroleum Chemicals supplies lubricant additives including engine oil packages, sulfonates, viscosity modifiers and other components to independent lubricant manufacturers and the automotive aftermarket industry.

Around the Globe

Shell is divesting most of its shares in downstream businesses in Africa to Vitol and Helios Investment Partners, for $1 billion. It will retain equity in two joint ventures that will offer Shell brand lubricants in 14 African countries…

Eriks will distribute Castrol Industrial UKs products in the U.K., initially focusing on greases, industrial gear oil and spindle oils…

Ineos Oligomers has appointed IMCD Group as its sole distributor for Indopol-brand polybutenes in India. These products are commonly used in lubricants, fuels, coatings and numerous other products. The two companies have also partnered in Europe, Russia, South Africa and China.

Faces in the News

Andy Bornstein has been named president of North American Lubricants Co., the Scottsdale, Ariz.-headquartered bulk lubricants supplier. He has over 20 years of experience in the industry, and previously was with Amalie Oil in Tampa, Fla., holding positions of increasing responsibility as district manager, business development manager and vice president.

Safety-Kleen Systems has appointed Robert M. Craycraft as president and CEO, bringing his 20+ years of industry experience to the rerefining company. Craycraft began his career at Ashlands Valvoline business, and held numerous senior posts there in do-it-yourself and installed sales, then was vice president of business transformation. He most recently headed Ashland Distribution. Also at Safety-Kleen, Rodney Walker is now technical director, oil rerefining, responsible for technical support and ensuring its lubricants are cost-competitive. Walker has been with the company for more than 10 years, in plant operations, technical support, sales and general management.

Lubricant manufacturer Amalie Oil Co. announced that Ken Holder has been promoted to national sales manager. A Tampa native, he has over 20 years experience in the automotive aftermarket; prior to Amalie he worked for 10 years as a manufacturers representative with the Sam Compton & Assocs. agency.

Wichita-based Universal Lubricants has promoted Rick Palmore to vice president of wholesale and heavy duty/commercial sales. He has been with the lubricant blender, marketer and rerefiner for 25 years. The company also added Edward Genovese as senior vice president of environmental services. He joins the company from Safety-Kleen. Additionally, Peter Fox was named vice president of marketing and retail sales. Formerly with The Coleman Co., Fox brings deep experience in consumer packaged goods.

Preservative supplier Emerald Performance Materials has named Brian Denison as president of Emerald Kalama Chemical BV, formed when Emerald acquired DSM Special Products in Europe in December. He continues as vice president of operations and HSE for Emerald Performance Materials. Denison said the company expects to expand product offerings from its Rotterdam manufacturing facility.

Craig Calle has been appointed senior vice president and CFO of Maxum Petroleum, a Greenwich, Conn.-based lubricant marketer. Holding an MBA from Harvard, he joins Maxum from, after serving with Gateway, IP Wireless, and Crown Cork & Seal. Former CFO Michel Salbaing is now Maxums senior vice president, integration, focusing on IT implementation.

Kittiwake Developments, known for condition monitoring and fuel and lube oil analysis, picked Steve Dye, Ph.D., as business development manager. Dye comes from Kittiwakes engineering department, where he was instrumental in developing waterScan, an infrared water-in-oil monitoring system. Hell remain involved in R&D as he works to expand Kittiwakes market reach.

Specialty chemical distributor Walsh & Associates, St. Louis, Mo., has named Shannon Lindsey as sales representative for the Great Lakes region. She has a chemical engineering degree from Purdue, an MBA from DePaul, and 12 years of industry experience.

Rigid-container supplier BWay Corp., has tapped Michael Noel as executive vice president, sales & marketing; Mike Sheppard as vice president of distributor sales; and Mike Bero as vice president of commercial sales.

Des-Case and AMS Filtration Merge

Des-Case Corp., which makes contamination control products for industrial lubricants, is merging with Lakeville, Ohio-based AMS Filtration, which specializes in high-end filtration and vacuum hydration of industrial oils. Together, the two will reach more geographic areas and offer deeper expertise, indicated Brian Gleason, president of Des-Case. Terms of the deal were not disclosed.

Headquartered near Nashville, Tenn., privately held Des-Case holds the leading position in the breather market, while AMS has focused on oil purifying products. AMS founder and president Dennis Morgan and all AMS employees will join Des-Case, with Morgan continuing to direct its vacuum dehydration and filtration business from Lakeville.

Wanted: Fluid Power Innovators

The National Fluid Power Association has launched the Fluid Power Innovation Awards to recognize engineers and technicians who are using fluid power to address customers needs. The program includes cash awards and recognition, said NFPAs Eric Lanke, and seeks nominations for those who are using fluid power to increase energy efficiency, improve reliability, increase power output or reduce system size, and minimize environmental impact.

Applicants must provide documentation of their innovation. Deadline for nominations is May 31, with winners notified by July 31. NFPA membership not required. Visit for eligibility criteria and application materials.

Related Topics

Market Topics