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Formaldehyde = Carcinogen

The U.S. Department of Health & Human Services last month listed formaldehyde, a key ingredient in a popular family of metalworking fluid biocides, as a known human carcinogen. The listing appeared in the 12th Report on Carcinogens, or 12th RoC, prepared for HHS by the National Toxicology Program.

There is now sufficient evidence from studies in humans to show that individuals with higher measures of exposure to formaldehyde are at increased risk for certain types of rare cancers, including nasopharyngeal (the nasopharynx is the upper part of the throat behind the nose), sinonasal, as well as a specific cancer of the white blood cells known as myeloid leukemia, the HHS reported.

Formaldehyde-releasing chemistries are very cost-effective biocides and have been used for decades in metalworking fluids. The most common formaldehyde-donor chemistry is triazine, also known as hexahydrotriazine or HHT, but other formaldehyde condensates are also EPA-registered for use in the metalworking industry. Previous editions of the RoC listed formaldehyde as a substance that was reasonably anticipated to be a human carcinogen. Its change in status now leaves metalworking fluid suppliers to wonder how the U.S. Environmental Protection Agency will respond.

EPAs own draft assessment of the health effects of formaldehyde exposure drew sharp criticism from the National Academies of Sciences in April. The NAS review said EPAs report needed significant revisions. It agreed EPA had substantiated its conclusion that formaldehyde exposure can cause cancers of the nose, nasal cavity and upper throat, but NAS concluded that blood cancers were not supported.

Industry now has contradictory findings from NAS and NTP, pointed out Adrian Krygsman, of Troy Corp. in Florham Park, N.J. It could be weeks or months to know what EPA will do, he said. An industry meeting with EPA to address formaldehyde issues has been scheduled for early fall.

In addition to formaldehyde, seven other substances were added to the 12th RoC, which now includes 240 listings. It is available at http://ntp. niehs.nih.gov/go/roc12.

Pearl Set to Ship

In late May, the Pearl gas-to-liquids project in Qatar at last began streaming GTL gasoil, a type of clean-burning diesel fuel. Storage tanks were being filled and the first ship -loads of the product were expected to go out as this issue goes to press.

A joint venture of Royal Dutch Shell and Qatar Petroleum, Pearl has taken five years to construct. The massive project in Ras Laffan City, Qatar, will start up production of high-quality base oils from the first of two lube trains later this summer as well. Full production capacity will be attained in mid-2012, Shell says.

Kazakhs Dream of Group III

The town of Shymkent, Kazakhstan, is about the join the widening API Group III club. A partnership formed by local lubricant blender Hill Corp. (an acronym for High Industrial Lubricants & Liquids) and state energy company KazMunayGas plans to build a 200,000 metric ton per year plant near the latters refinery in that location, which would be capable of making both Group II and III oils. Thats about 3,800 barrels per day.

The new facility expects to begin operating in 2014, will use Chevron Lummus technology for its processing scheme, and will be the countrys first base oil producer.

$121 Billion: A Lot of Machine Tools

World demand for machine tool products, including metal cutting and forming machine tools and their accessories, is projected to surge 9.4 percent a year through 2014, to reach $121 billion in value. Growth will be led by the developing world, especially China and India, and North America also will see respectable gains versus the miserable showing of 2009. Japan and Western Europe, however, will lag the rest of the world, according to World Machine Tools, a new study from The Freedonia Group market research firm.

As it does now, the industrial machinery and equipment market will account for the largest share of demand in 2014, the study says, but the transportation sector will post the strongest gains. Transportations growth will be driven by motor vehicle production and also aided by commercial aircraft production. In developing countries, consumer demand for electronics will grow along with per capita incomes, meaning growth in this segment as well.

Metal cutting machine tools will continue to account for the majority of the total market, and demand is forecast to expand 8.6 percent per year to hit $61 billion in 2014, thanks to recovery in key end-use markets in the developed world. Metal forming tools will see sales value climb 8.3 percent per year, the study expects, and reach $23 billion by 2014. The fastest growth, 11.6 percent per annum, will be enjoyed by machine tool accessories, spurred by sales of cutting tools, dies, jigs and like attachments, that help users economize in a competitive environment.

The complete study, World Machine Tools (296 pages, $5,900), is available from www.freedonia group.com.

PAG Plant Sold to GEO

GEO Specialty Chemicals will buy the former Cognis facility in Hythe, U.K., which makes polyalkylene glycol base stocks and PAG based synthetic lubricants, for an undisclosed amount. The plants sale was ordered by the EU Commission as a condition for approval of BASFs acquisition of Cognis last December. The sale is expected to close in this quarter, after which BASF will purchase the plants PAG and PAG based lubricants from GEO under a long-term supply agreement.

PAGs are used in a variety of industrial lubes, including compressor oils, hydraulic fluids, gear oils and refrigeration lubes. Privately owned GEO Specialty Chemicals is based in Lafayette, Ind., and has 18 manufacturing facilities.

Silgan Left at the Altar

Faced with a superior offer, Graham Packaging has decided against consummating its planned marriage with Silgan Holdings. Graham, which claims 74 percent of the automotive lubricants market for blowmolded plastic quart/liter bottles, instead will become part of Reynolds Group Holdings Ltd., the food and beverage packaging giant.

Graham originally agreed in April to be acquired by Silgan for $4.1 billion, but Reynolds came forward with an unsolicited bid of $25.50 per share worth a total $4.5 billion including debt. When Silgan did not match that offer, Graham terminated the earlier agreement and signed on with Reynolds. In recompense, Graham Packaging will pay Silgan Holdings a $39.5 million termination fee.

Kirk Says Adieu, Lubrizol

Lubrizol shareholders overwhelmingly approved its acquisition by Berkshire Hathaway last month, giving the go-ahead to sell the additive and specialty chemical manufacturer for $135 per share. The all-cash transaction is said to be on track to close in the third quarter, but the companies agreed to push the deadline back to Dec. 31. Afterward, Lubrizol will be a subsidiary of Berkshire Hathaway, and current CEO James Hambrick, 56, will continue as its head in Wickliffe, Ohio.

It was also announced that Senior Vice President and COO Stephen Kirk, 61, has decided to retire within a few weeks of the mergers closing. I am going to turn my energy and focus to several non-profits in Cleveland, he told Lube Report. I will also try to improve my ailing golf and tennis games. Kirk joined Lubrizol as an intern in 1968, and became a full-time employee in 1972. He was president of Lubrizol Additives from 2004 to 2008.

Also retiring after the merger will be Sr. V.P. and Chief Financial Officer Charles P. Cooley, 55, who like Kirk will leave with about $9.1 million in stock options and equity. Brian Valentine, now Lubrizols treasurer, was named to become CFO upon Cooleys retirement. No replacement for Kirk was mentioned.

Moving Days Ahead for ExMo

ExxonMobil last month unveiled plans to build an energy-efficient campus on a 385-acre site north of Houston, and consolidate its many Houston offices there. That includes ExxonMobil Chemical, as well as its upstream operations. Move-in will occur in stages as buildings are completed, beginning in 2014 with full occupancy expected by 2015. The site will hold several office buildings, a laboratory, conference and training centers, and employee amenities such as child care and a wellness center.

Further study will determine whether any other U.S. offices will be relocated to the new campus in the future, such as ExxonMobil downstream operations, or its Lubricants & Specialties and Research & Technology units, both currently based in Fairfax, Va.

Applause for Boxy Packages

Three motor oil companies – BP Castrol, Shell and Valvoline – earned Supplier of the Year for Sustainability awards from Walmart, for providing bag-in-box packaging that reduced the retail giants plastic and oil waste stream last year. The demi-bulk containers, which typically hold about five to six gallons each, have replaced quarts and jugs at many of Walmarts 2,450 Tire & Lube Express outlets. Each space-saving container can replace 24 or more single quarts, reduces plastic landfill waste by up to 89 percent, and is almost fully recyclable.

Gulf Oil Targets Pacific Islands

U.K.-based Gulf Oil International has signed an agreement with its New Zealand distributor, CRT Cooperative, to extend the current reach of its lubricants into Australia and more than a dozen South Pacific islands, including Fiji, Kiribati, Norfolk Island, Papua New Guinea, Pitcairn, Solomon Islands, Samoa and others. To serve the region, CRT has established a new subsidiary, Anzpac Oils Ltd., and named Steve OHalloran as sales manager.

Business Briefs

Agricultural giant and industrial chemical supplier Cargill will invest $2.6 million in its Wichita, Kan., facility to produce electrical insulation fluid made from soybean oils.

SK Lubricants is building an 11,000 b/d Group III plant in Asia, and will have it running by June or July 2012, company officials announced during the ICIS Asian Base Oils & Lubricants Conference in Seoul, Korea. They declined to disclose the location of the mystery plant, however.

Paulsboro Refining Co. has picked Coastal Blending & Packaging to distribute its base oils in Canada.

Heartland Automotive Services, Jiffy Lubes largest francisee, with more than 435 outlets, in April acquired Washburn Industries, a Mobil 1 quick lube operator with operations in central Texas.

Dowd & Guild has been tapped to represent sulfonates marketer Kimes Technologies in Texas, Oklahoma, Louisiana and Arkansas.

Markham, Ont.-headquartered Chain Guard Industrial Lubricants has picked Kitten Enterprises to distribute its food-grade lubricants and greases in Mumbai, India.

Faces in the News

Mike Duggar has been elected 2011-12 president of the Society of Tribologists & Lubrication Engineers. Duggar is a senior staff scientist with Sandia National Laboratories in Albuquerque, N.M., and took office during the groups annual meeting in Atlanta in mid-May.

Cathy Novak has joined Rhein Chemie as senior technical sales representative for North America. Formerly with Eastern Oil, she brings more than 25 years of lubricant and metalworking fluid experience to the additive companys U.S. team, based in Chardon, Ohio. The companys Mannheim, Germany, staff also is expanding, with the addition of Wilhelm Rehbein, who brings more than 22 years of experience and will focus on development of metalworking fluid additives, and with Annette Loos and Sebastian Foerster, both Ph.D.s, who have joined its application technology team to focus on hydraulic packages and antiwear additives.

Andy Johnson is the new technical director at Strongsville, Ohio-based Wallover Oil Co. With 20 years of experience in the metalworking area, including formulating expertise, he will be in charge of R&D as well as quality assurance. Previously, Johnson worked for BP Castrol, Total Fina and Qualichem.

Closed-loop motor oil rerefiner, blender and distributor Universal Lubricants announced that Nancy Blanchat has joined the company as director of marketing, overseeing the marketing effort for its Eco Ultra products. Blanchat has over 20 years in advertising, marketing and account management, including with Fidelity Bank and the Coleman Co.

Engineered Custom Lubricants, which makes specialty greases and coatings for OEMs, named Kasturi Lal Ph.D. as vice president of technology. His 20 years of prior industry experience includes positions with Alcoa, ELM and Lubrizol.

Pat OBrien has joined Archway Sales as technical sales representative, responsible for growing the distributors presence in parts of Iowa, Illinois and Missouri. He most recently was with Univar.

CORRECTIONS

The May article Oiling the Old Dominion mistakenly called Mobil Delvac 1300 Super a CI-4 Plus diesel engine oil. It is an API CJ-4 product.

The name of Tom Fredrickson, Lucas Oils chief administrative officer, was misspelled in our June issue.

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