Market Topics



CK-4/FA-4 Enter Provisional Licensing

The American Petroleum Institute invoked provisional licensing for its API CK-4 and FA-4 heavy-duty diesel engine oil categories in early May, due the unavailability of test stands for the Caterpillar C13 Oil Aeration Test.

The COAT test (ASTM D8047) measures oils resistance to aeration, the amount of air in the oil, which can lead to pressure loss in the engine and damage to the oil pump. API was notified by ASTMs COAT Surveillance Panel of the lack of test stands, noted Kevin Ferrick, senior manager for APIs Engine Oil Licensing and Certification System.

Oil marketers may now request provisional licensing only if the COAT test is required for their formulation to qualify for CK-4 or FA-4, and will still need to score passing results on additional test requirements for either oil category. Engine oils with approved provisional licensing will be listed on APIs licensee directory without any special designation until the COAT test becomes available again, by which time licensees must get a passing result within six months of the provision being lifted.

ExxonMobil Acquires Indonesian Blender

ExxonMobilwill purchase Indonesian lubricant blenderPT Federal Karyatama as part of a plan to expand in the Asia-Pacific region. The oil major expects to complete the transaction by the third quarter, pending shareholder and government approvals.

ExxonMobil said in early May it will acquire 100 percent of FKT from its parent company, PT Mitra Pinasthika Mustika Tbk. The $435 million acquisition includes the Federal Oil brand of lubricants and a blending plant in Cilegon, Indonesia, which has capacity to make between 90,000 and 100,000 metric tons per year of lubricants.

This is ExxonMobils first time purchasing a blender in Indonesia, said Erwin Maryoto, vice president of public and government affairs for ExxonMobil Indonesia. FKT is one of the key lubricant players in Indonesia, especially [for] motorcycles, said Ilman Hizbullah Hasibuan, consulting manager of Ipsos Business Consulting Indonesia. Meaning that ExxonMobil will be able to access Federals market through this purchase and increase their presence among Indonesian lubricant users.

Italmatch Gains Aftons MWF Business

Italmatch Chemicals Group continues racking up acquisitions with the purchase in May of Afton Chemicals metalworking fluids business. Financial terms of the agreement were not disclosed. It is Italmatchs second acquisition this year, and its fifth acquisition since 2017.

The deal includes all of the Richmond, Virginia-based companys metalworking fluids businesses and assets from plants in Bedford Park, Illinois, and Manchester, United Kingdom, as well as technology and business sites in India and China. Both Asia plants, however, will be retained by Afton to ensure security of supply.

This transaction further strengthens Italmatch Chemicals Groups position in the industrial lubricants and metalworking fluids business, integrating the current production range with a series of fluid additives for high-performance metal processing, said Maurizio Turci, CFO of corporate affairs and human resources director at Italmatch.

Raizen Buys Shell Argentina

Shellagreed to sell its downstream business in Argentina to Raizen, a 50-50 joint venture with Brazilian sugar producerCosan. The agreement calls for Raizen to pay $950 million for assets that include a refinery in Buenos Aires with an API Group I base oil plant that has capacity of 78,000 metric tons per year.

Shell officials said that Raizen won a competitive bidding process for its downstream business, beating out Argentinian energy company YPF, Chilean conglomerate Quinenco S.A. and China National Petroleum Corp.s PetroChina. The sale was the culmination of a two-year review by Shell of its lubricant, fuel and chemical operations in Argentina and part of a broader plan to divest assets valued at $30 billion.

Raizen, which already manages more than 6,000 Shell service stations in Brazil, will serve a similar role in Argentina, and the sales agreement calls for it to continue carrying Shell products.

Valvoline Sets Sights on China

Valvoline Inc.will invest $70 million to build its first lubricants plant in China. The new blending and packaging facility in Jiangsu province will be the companys single largest blending plant investment worldwide.

The 80,000-square-meter plant in Zhangjiagang is expected to begin production by the end of 2020 and will have an annual production capacity in excess of 103,000 metric tons. This new plant is an investment in China and its rapidly growing demand for high-quality lubricants and coolants to meet the evolving needs of both passenger car and heavy-duty customers, said Valvoline CEO Sam Mitchell.

Aussie Blender Plans
New Facility

Australian independent motor oils blender Nulon submitted plans to build a $10 million, 10,696-square-meter production and warehousing factory in western Sydney to replace its smaller and aging facility in nearby Moorebank.

The development application submitted to the New South Wales planning authority said the operations will comprise blending and production, bottling and packaging, storage and bulk fluid delivery facilities for more than 150 products. Nulon said it plans to ship products nationally via road and rail and internationally from Sydneys sea port.

SK Nixes Third IPO

SK Lubricantssaid in late April it was tabling a planned initial public offering for the third time after once again failing to achieve a desired valuation for the business.

Parent company SK Innovation planned to offer shares worth a combined 30 percent stake in the business to secure $929 million to $1.1 billion. SK filed its IPO application in February and in April kicked off a public offering process that would have culminated in its base oil and lubricants subsidiary being listed on the Korea Stock Exchange last month.

Prior to a two-day demand forecasting session held on April 25 and 26, Heungkuk Securities Co. said the suggested offering price between $94 and $114 per share seemed to be too high and asserted that the financial market was uncertain about the potential for base oil demand growth. SK Lubricants tabled previous IPO plans in 2012 and 2015, in both cases citing unfavorable market climates.

Full Production Resumes at Wakayama

JXTG Holdings API Group I base oil plant at its Wakayama, Japan, refinery recently restarted full production after running at partial capacity for more than a year.

Two fires broke out at the refinery in January 2017, damaging the No. 2 propane dewaxing and the No. 2 n-methyl-2-pyrrolidone extraction equipment at the base oil plant, which can produce 370,000 metric tons per year of Group I oils. The facility was owned by TonenGeneral Sekiyu K.K. at the time of the incident before it merged with JX Nippon Oil.

Briefly Noted

RelaDyne scooped up three Florida distributors-Jack Backer Distributors Inc., Seaboard Neumann and Flamingo Oil-marking its entrance into the Sunshine State. It also acquired A&W Oil & Tire Co., an Augusta, Georgia-headquartered fuel and lubricant distributor that has a second facility in Waynesboro and serves eastern Georgia and western South Carolina.

Tokyo-headquartered DIC Corp. in April began expanding its capacity to produce extreme pressure additives for metalworking fluids at its plant in Kashima, Japan. The company did not disclose the facilitys existing capacity but said the expansion will increase it by 6,000 metric tons per year.

Quest Resource Holding Corp., a national provider of corporate sustainability services, is introducing a used motor oil recycling program at locations across the United States for customers using Shell engine oils.

Global chemical and ingredient distributor Univar Canada and Boss Lubricants, a lubricant manufacturer and supplier, entered into an energy and mining agreement for Western Canada, allowing Boss Lubricants to market its products in the region.

Spanish oil company Repsol started distributing its lubricants in the Mexican market.

Shell Marine added Coronel, Chile, and Seville, Spain, to its marine lubricants global port network.It also began distributing marine oils into New Zealand, and added Medan, Indonesia, to its direct delivery network.

Faces in the News

Schaeffers Specialized LubricantsappointedJim Carrollexecutive vice president of operations, a newly created position within the company. His 20-year tenure at Schaeffers includes his most recent position as vice president of technical services.

BASF appointed senior vice president Uta Holzenkamp to lead its fuel and lubricant solutions global business unit. She succeeds Martin Widmann, who moved to another role at the companys Care Chemicals division.

OxeaappointedLars Eric Johanssonas its new senior vice president of strategic alliances. He previously served as chairman ofPerstorpAegis Chemicals India and of Shandong Fufeng Perstorp Chemicals China.

Ed Pyatt was appointed account manager for the St. Louis region at Walsh & Associates.

Kristiaan Van Severen joined Belgium-based Kemat as product manager for polyisobutylenes.


The May 2018 Auto column, The State of Engine Oils in 2018, incorrectly stated that the National Advertising Division case allowing engine oils made with API Group III base oils to be marketed as synthetics was between Exxon and Castrol. In fact, the case was between Mobil and Castrol, having taken place before the merger of Exxon and Mobil.

Related Topics

Market Topics