The quota will be split into two 200,000 ton semestral amounts, to be counted on a first come, first served basis without additional cost. The quota applies to Group II oils between viscosity grades of 150 neutral and 600N. Lighter Group II grades and API Group III base oils will remain exempt from duties.

European demand for Group II is far greater than local production capacity, giving rise to complaints that the quota is too low and will increase costs for some lubricant blenders.

In a small concession, the commission stipulated that the quota be reviewed after six months, something that would normally not be done for a year.

The quota makes the ongoing transition in the European market from Group I to Group II base oils-driven by technology upgrades such as the ACEA 2016 European oil sequences and upcoming ACEA 2020 sequences-more costly for businesses. External factors such as the impending IMO 2020 regulations are expected to add momentum to this transition.

Petrobras to Sell Uruguay Business

Brazilsstate-owned Petrobrasstarted the process to sell its distribution company in Uruguay. The subsidiary, Petrobras Uruguay Distribucion, is based in Montevideo and operates a wholly owned lubricant terminal in that metropolitan area. It is Uruguays second-largest lube supplier in the small market, which has an annual finished lube demand of approximately 13,000 metric tons.

The sale is being handled by Brazils Banco Itau. Those bidding on the business could request a confidentiality agreement and compliance certificate during the non-binding phase, which was to last until December 20. Bidders must have experience in fuel distribution operations with at least 15 service stations, have reported net revenue of $50 million or more, and at least $100 million in assets under management.

In addition to the distribution hub, the sale includes several delivery points for marine fuels and lubricants at the countrys main public ports, as well as 90 fuel service stations and 16 convenience stores.

Group Studies Electrification of Work Trucks

An American Trucking Association study group is examining the effects of electrification on specifications and maintenance of vocational trucks, with a goal of recommending whether fleet owners should switch to electric vehicles and best practices for doing so.

The ATAs Technology & Maintenance Council S.14 Light & Medium & Specialty Trucks Study Group is a permanent standing committee of fleet owners, suppliers and original equipment manufacturers to develop best practices on maintenance and specifications for specialty trucks. Vocational trucks are work vehicles that dont perform commercial transportation, such as garbage trucks.

TMCs main concerns lie in the financial implications of a fleet owners potential switch to an electric fleet. Were driven by the bottom line, said Jack Legler, TMCs technical director. Anything that helps us do our work faster, better, more efficiently at a profit level thats necessary to sustain business are the things were interested in. Environmental and regulatory factors are still a consideration, but a best practice must make financial sense.

Legler stated that the process of developing recommended practices typically takes at least 18 months and that the study is still in the discussion phase.

Aerospace Lubricants Expands

Aerospace Lubricants has added 10 million pounds of grease production capacity at its plant in Columbus, Ohio, to expand into the industrial, automotive and private label grease markets.

The expansion, which was expected to be complete at the end of November, includes 10 stainless steel grease kettles that will improve product quality by allowing dedicated production lines by thickener type to prevent cross-contamination, the company said.

The companys customer base has primarily been composed of aviation original equipment manufacturers and military hardware contractors. It has since broadened its sights. We expect to do even more business with Tier 1 component manufacturers by being able to offer an expanded range of grease thickener types to better offset competitor product lines, said John Lorimor, the companys technical director. Tier 1 suppliers are companies that supply parts or systems directly to OEMs.

The expansion creates enough capacity for Aerospace Lubricants to offer private label greases or toll manufacturing to other companies.

SEC Fines Calumet

The United States Securities and Exchange Commission charged Calumet Specialty Products Partners L.P. in late November with posting an inaccurate and misleading earnings release in 2017. Without admitting or denying the findings, Calumet consented to entry of the SECs order and agreed to pay a fine of $250,000 as part of a resolution to the investigation.

According to the SECs order, in late 2017 Indianapolis-based Calumet implemented a new enterprise resource planning system, which resulted in various operating and reporting disruptions, including limitations on the companys ability to maintain an effective internal control environment and meet external reporting deadlines.

The company was seven weeks late filing its financial results for the third quarter of 2017 and, in that filing, announced two material weaknesses in internal control over financial reporting. These problems continued into March 2018.

The annual report indicated a $103.8 million net loss for 2017, which is 18 percent higher than the $85.1 million net loss reported in the March 8 earnings news release.

New Grease Plant Starts Up in Kansas

A joint venture between Japan-based Kyodo Yushi and Wichita, Kansas-based Lubrication Engineers began operating a new grease plant in Wichita, Kansas, in late 2019.

The $35 million, 10,700 square meter plant manufactures greases for the automotive industry.

Looking at the further growth of the automobile industry in the U.S., which has one of the most critical car markets, we have set up the plant and begun operation to fulfill our responsibility of providing the products. At the same time, our production capability and system have been enhanced in the country, the j.v. company, Kyodo Yushi Manufacturing Americas LLC, stated.

Kyodo Yushi produces mill grease, roll bearing grease and other specialty greases and has historically imported products from Japan and contracted with toll blenders to manufacture products for U.S. companies. The Wichita facility is its first manufacturing location in North America.

Lubrication Engineers manufactures grease, industrial oils, gear oils, food-grade lubricants and other products.

Fuchs Buys Shares in African Distributors

The Fuchs Group acquired half the shares of three separate African lubricant distributors to strengthen its presence in the continents Sub-Saharan region.

The Mannheim, Germany-based independent blender said the three distributors-located in Mozambique, Zambia and Zimbabwe-generated sales of approximately 21 million euros ($23.2 million) in 2018. Fuchs did not disclose the cost of the acquisitions, which are now 50-50 joint ventures, nor the volume of lubricants it distributes in Africa.

This will supply markets in Africa and is also part of our current global growth initiative investing in existing and new plants focused on capacity increase in line with advanced technology, said Stefan Fuchs, chairman of the executive board of Fuchs Petrolub SE. Further plant expansions are already being planned.

Fuchs already operates an African entity, Fuchs Southern Africa, and a joint venture with Petrolube in Tanzania. In 2014 it acquired three distributors in South Africa, and built a grease manufacturing plant in Johannesburg in 2018. Lubricants distributed by Fuchs in Africa are manufactured at its South African operation.

Rerefinery Planned in Turkey

Turkish waste oil collector Tayras announced that it is building an API Group II base oil rerefinery with enough capacity to process 20 percent of the used lubricants that the country generates. The company claims it will be the countrys first rerefinery.

In a letter to Europes waste oil rerefining industry association, GEIR, Istanbul-based Tayras said the facility will be operational in October 2020 and that it will have capacity to process 60,000 metric tons per year of waste oil. Tayras CEO Mehmet Afsin told Lube Report the project will make 42,000 t/y of Group II and that its price tag is U.S. $38 million.

Turkey generates around 300,000 t/y of waste oil, according to Afsin. Most of it is now used as fuel in cement factories or as a supplement to diesel.

Briefly Noted

Additive manufacturer Infineum opened its new Global Centre of Innovation on November 8 at its headquarters in Milton Hill, United Kingdom, including research & development laboratories and meeting spaces.

Castrolannounced a long-term strategic partnership withDriven Brandsand quick lube chainTake 5 Oil Change, integrating training, service and marketing efforts.

Idemitsu Kosancompleted the construction of its second Indonesia lubricant blending plant, nearly doubling its production capacity in the country. The plant boasts production capacity of 45,000 metric tons per year.

Master Fluid Solutions and its Turkish manufacturing partner Peten Endustriyel have established a plant in Tuzla, Turkey, that will make Master Fluid products.

SIP Specialty Oils and Fluidswill distribute Biosynthetic Technologies base oils in Europe.

LanxessacquiredItibanyl Produtos Especiais Ltda., a leading Brazilian manufacturer of biocides, some of which are used in metalworking fluids and lubricants. The purchase price was not disclosed.

MFG Chemical upgraded its pilot plant in Dalton, Georgia, which makes small quantities of specialty chemicals used in lubricants, such as esters, surfactants and sulfonate and phosphate derivatives.

JXTG Holdings Inc. will change its trade name and the name of its lubricant and grease producing subsidiary to Eneos after approval at its June shareholders meeting.

Faces in the News

George Damiris retired as CEO, president and director ofHollyFrontier Corp.on December 31. The companys board appointed Michael Jennings-previously executive vice president for the company-as CEO and president effective January 1.

Infineum announced changes to its leadership team: Philippe Creteur is executive vice president of sales; Aldo Govi is EVP of business growth and technology; Chris Locke is EVP of supply and operational excellence; Rebecca Oldfield is EVP of business transformation and digitalization; and Mike Chen is the companys president in China.

Gisela Miller has been named director of sales for American Refining Group after serving as the interim director since July 2019.

Nanotech Industrial Solutions appointed Hoon Kim as the companys new technical director.

Christopher Thomas of Vertex Energy Inc. died on November 7. He managed Group II base oil sales for the company.

Matteo Morelli was appointed as Greifs sales director in Italy.

Corrections:

In last months Product News it was stated that Shell Rotella Gas Truck oil was set to be released in January 2020. The oil was actually released in November 2018.

The legal decision stating that an advertiser cannot claim superiority on the basis of non-standard tests was between Castrol and Mobil. The December “Auto” column stated incorrectly that Pennzoil was involved.