Gulf Oil, part of Indias Hinduja Group, is buying metalworking fluids giant Houghton International from equity firm AEA Investors. The $1 billion transaction was expected to close by the end of 2012.

Valley Forge, Pa.-based Houghton will operate as a separate company, but the two will team up to expand geographically, increase sales and strengthen manufacturing.

Frank Rutten, international vice president for Gulf Oil, said his company is seeking to grow both organically and through acquisitions and mergers. The combination between Houghton and Gulf is as close to perfect as there is, he said, with hardly any overlap in product strengths/portfolio or geographical overlap. So it is a very synergetic match.

Houghton is noted for its industrial lubricants portfolio, and its leading status in metalworking fluids was important to Gulf, which is stronger in automotive lubes. We are also very inspired by Houghtons R&D capabilities and the pipeline of new products, Rutten noted.

Rutten said the two will have an size advantage in sourcing raw materials such as base oils. Also, we have now a size that allows us to optimize the selection of additives, and so we look forward to the next steps whereby we will be selecting global partners on how much they will support us in our growth journey.

Houghton was founded in 1865 and has 12 manufacturing facilities in 10 countries. It acquired D.A. Stuart in 2008 and Shells metalworking and metal rolling oils business in 2011. It had sales of $858 million for the year ended Sept. 30, and an adjusted EBITDA of $132 million, said Gulf Oil. An affiliate of AEA Investors LLC acquired Houghton in 2008.

Ergon Expands in West Virginia

Ergon plans to invest $78 million to expand its Newell, W.Va., subsidiarys refinery to process more crudes from the regions Marcellus and Utica fields. Once complete, the expansion is also expected to enable a modest boost in specialty oil production from the sites paraffinic base oil plant.

The Newell base oil plant has a capacity of 1,900 barrels per day of API Group I and 2,900 b/d of Group II. This expansion will allow for modest gains in specialty oil production, which includes base oils and process oils, Ergons Jim Temple confirmed.

PetroChoice Buys Craft Oil

Enlarging its footprint in the Mid-Atlantic region, PetroChoice has acquired Craft Oil for an undisclosed amount. Craft Oil distributes lubricants, equipment and a wide range of related services to the commercial, automotive, industrial and aviation markets. It markets brands including ExxonMobil, Shell, Pennzoil, Quaker State, Service Pro, Cam2 and Wynns.

The acquisition gives Bristol, Pa.-based PetroChoice the capability and infrastructure to fulfill the specialized needs of lubricant customers throughout the Mid-Atlantic region, said CEO Shane OKelly. Added Lindsay Bankert, marketing coordinator there, We already distribute ExxonMobil out of our other offices, so it was just a good fit. She also noted that Craft Oils larger offering includes lift systems and waste oil heaters, adding to its appeal.

Established in 1925 and based in Avoca, Pa., Craft Oil was owned by Bob and Maureen Mangan Mills. Bob Mills will become chief strategy officer of PetroChoice and president of the Mid-Atlantic Division. PetroChoice is owned by Greenbriar Equity Group, and has acquired several lube distributors in recent years, including Tri-County Petroleum, Loos & Dilworths automotive division, Anderson Lubricants and assets of Lorenz Lubricants.

Shell Building in Indonesia

Shell plans to build a 120,000 metric tons per year blending plant in Indonesia to produce consumer, transport, industrial and marine lubricants. The investment cost was not disclosed for the blending plant, which will be 100 percent owned by Shell and located about 10 miles north of Jakarta.

This will be the largest blending plant operated by an international oil company in Indonesia, claimed Shell, which has until now imported lubricants to Indonesia from its blending plants in Singapore and Malaysia. It foresees strong growth in lubricants demand from Indonesia, driven by new vehicle ownership and production, construction and industrial activity, especially in the power generation and oil and gas production sectors.

Polands Lotos Enters Azerbaijan

Polish lubes marketer Lotos Oil announced last month that it had expanded its supply in Azerbaijan, its second Caucasus market after recently establishing a foothold in Georgia. The company will supply motor oils to Kia Motors official dealer network and service stations in Azerbaijan. At the moment we supply about 1,000 tons of [finished] lubricants annually in Azerbaijan and account for around 10 percent of the market, and the figures are growing every year, said Cezary Kogucik, commercial director.

JX Nippon Reopens Refineries

After an investigation of nearly four months, Japanese petroleum giant JX Nippon has reopened both refineries at its Mizushima plant in Okayama prefecture. Hiroji Adachi, the plants executive officer, said production resumed at Mizushima B on Nov. 28 after provincial authorities checked the refinerys safety regulations.

Reopening both refineries, which have capacity to produce more than 340,000 barrels of products per day, was an important goal for JX. Mizushima A includes a base oil plant with a capacity of 3,500 barrels per day of API Group I, but was closed following a fire in August. Mizushima B has a base oil plant with 4,000 b/d of Group I and 400 b/d of Group III capacity, and was closed last July as a result of failed safety checks and lackluster bookkeeping. Adachi apologized for the safety flaws and remarked that JX remains committed to safety as a priority.

Cargill: More Esters Coming

Cargill says it plans to expand its full line of ester fluids across Europe by mid-2013. The company will add manufacturing capacity to support its recently acquired brand of Envirotemp dielectric fluids, which include the industry-leading FR3 natural ester fluid. This portfolio of esters meets the specifications of a wide range of transformer applications, Cargill noted.

Shamrock Lands in Canada

International base oils, lubricants and petrochemicals supplier Shamrock Shipping and Trading has opened a Canadian office to coordinate its activities in North and South America. The office, in Oakville, Ont., will also allow us to better serve our growing markets and to facilitate customer relations, said a company spokeswoman.

Shamrock, which is based in Cyprus, handles a large portfolio of Group I, II and III base oils, pale oils, additives, finished lubricants and other products. It operates storage facilities in Latvia, Belgium and the U.K. with total capacity of 25,000 metric tons. Other capabilities include sourcing, processing, transporting, blending, financing and the supply of a wide range of chemical products.

Lanxess Ups Phosphorus

Specialty chemicals group Lanxess recently invested 5 million in its phosphorus chemicals production network in Leverkusen, Germany, resulting in a 10 percent capacity increase for phosphorus chlorides. In addition to debottlenecking the production unit, we improved the logistics concepts for our drum- and tankcar-filling facilities, said Jorge Nogueira, head of Lanxess Functional Chemicals. That gives us even more flexibility. We are well equipped now to meet the increased demand on the global market.

Phosphorus chlorides are used for the chemical synthesis of flame retardants, water treatment chemicals, lubricant additives and other products.

Sunset for Stanlow Plant

Essar Energy plans eventually to close the base oil plant at its Stanlow, U.K., refinery. But the Indian company, which bought the refinery in 2011, said it has no fixed date for the units closing. Closure will require negotiations with our customers, as we do have some supply obligations, spokesman Andrew Turpin explained. The status of these negotiations is confidential.

Stanlows base oil plant has capacity to make 5,060 b/d of Group I a year. It is part of a fuels refinery that Essar bought from Shell. Essar has no lubricant operations itself, but leading up to the refinery sale said it expected to enter an agreement to supply Stanlow base oils to Shell, which operates a lube blending plant there.

As Turpin explained, however, base oils do not fit into Essars larger plans, which focus on fuels. In fact, the base oil plant gets in the way because it can limit the choice of crudes for the refinery, and hampers the companys ability to use lower-cost crudes and feedstocks.

MWF Management Training

Industry experts Neil Canter and Fred Passman will conduct a 2-1/2 day Certificate Course next month in the Philadelphia area, aimed at metalworking fluid users, formulators, additive suppliers and distributors. Offered under the STLE University, this specialized training will provide a comprehensive look at the latest techniques and practices to improve metalworking operations. Topics include metalworking operations and fluid types; formulations and additive chemistries; fluid quality, testing and maintenance; the work environment; and management of fluids in individual sumps and large circulating systems.

Dates are Feb. 19 to 21. Fees ($600 for STLE members; $735 for others) include white papers, books and materials, lunch on the first two days, and coffee breaks. This Certificate Course includes the option of a post-course exam for those who seek documentation of their knowledge. Registration: www.stle.org/university/courses.aspx or phone (847) 825-5536.

Munzing Picks Canada Rep

Effective last month, RJS Quinn was named the exclusive manufacturers representative for Munzings Foam Ban and Foamtrol defoamer lines sold to industrial fluid markets in Canadas Quebec and Ontario provinces. These markets include the metalworking and lubricant industries, surface treatment, in-process waste treatment and energy. Munzing noted that Rick Quinn, based in Milton, Ontario, has more than 25 years of sales, product management and marketing experience in the chemicals and manufacturing industries.

For the Record

Nynas AB has invested SEK 600 million (U.S. $88.5 million) in a new sulfur treatment plant at its refinery in Nynashamn, Sweden.

Fuchs Lubricants (UK) recently acquired metalworking fluid specialist CNC Fluids in Keynsham, U.K., for an undisclosed amount. CNC Fluids supplies metalworking and cold forming products to manufacturing companies throughout the country.

DIWA International has been tapped to distribute lubricants in Togo for Petronas subsidiary Engen Petroleum.

Total and OiLibya opened a j.v. lubricants blending and storage facility in Egypt last month. The companies said they expect the $20 million project to help expand their sales in the North African country. Located near Alexandria, the plants capacity is 40,000 metric tons per year of finished lubes.

State-owned Belarus oil company Naftan has started a low-tonnage API Group III base oil unit at its Novoplotsk refinery. The units capacity is only 6,000 metric tons a year – about 120 b/d – but that could rise in coming years, a company official told Lube Report. The products general technical characteristics show that it has Group III base oil quality, he added, but further testing is needed to confirm that it can match the same products offered on the market.

Faces in the News

Brian Finch has joined specialty lubricant manufacturer Radco Industries, in suburban Chicago, as military product manager. Finch has 18 year of experience in the lubricants industry, and formerly was category manager for lubricants and specialty products at Haas Group.

Jim Connery has joined St. Louis, Mo.-based Archway Sales as a technical sales representative for the Southern region. Based in Tampa, Fla. Connery has over 25 years experience in chemical sales. He will be responsible for growing sales in Florida.

Lubricant distributor Western Marketing Inc. has tapped Mike Miller as president, following the retirement of Rich Hasten. Miller brings 30 years of experience in leadership and business management to the Abilene, Texas-headquartered firm, including with Ford, Castrol and BP, and most recently Blue Sun Energy.

Also joining the Western Marketing team as a member of its Board of Directors is Chris Haire, former president of Total Lubricants USA Southwest, from which he retired in 2009. Haire also held executive positions at Lubricants USA, Fina Lubricants and Phillips Petroleum Co.