Through the turbulence of the past few years, lubricants industry finances seem to have been remarkably resilient. Published results for marketers and suppliers have demonstrated robust health. As examples, you need only look at the pre-tax profits of Fuchs Petrolub, Ashlands Valvoline business, BPs Castrol segment, Afton Chemical and other publicly held outfits. These results demonstrate that lubricants companies have been working both sides of the profitability equation – revenues and costs. Yet in the days ahead, several factors in the market could alter the competitive environment and upset profitability.
Gas-to-liquids base oils are a classic example of a market disruption: potentially damaging to some, empowering to others, and ultimately beyond the control of the lubes industry itself. But how much of an impact will they make?