Lube Additive Industry Facing Key Challenges - CEO
LONDON (ICIS news)--The lubricant additive industry is facing several key challenges including the need for increased energy efficiency, reducing greenhouse gases and producing higher quality yet affordable products, all while striving to operate profitably, an industry CEO said on Friday.
Additives play a critical role in achieving the desired lubricant formulations to conform to environmental and industry needs, said the CEO of Infineum, Dominique Fournier, at the ICIS Base Oils and Lubricants conference.
The past 10 years had seen a reduction in NOX (nitrogen dioxide gases) and particulate matter by a fifth due to better additives, he said.
However, a big challenge was the huge costs associated with new product development, testing and qualification, according to Fournier.
For example, typical motor oil development took two to three years and could cost more than $2m (€1.6m), he said.
Although the profitability of the lubricant additive industry had improved in the past few years, the current economic slowdown could see growth rates slide into the negative from the present 1-2%, he added.
Fournier expected the industry to see an increasing move towards group II/III base stocks in mainstream formulations and a reduction in group I base oil demand.
Reduced supply of brightstock for the marine lube sector would remain a problem amid the declining demand for group I base oils, he added.
Although further consolidation was unlikely in the additives industry in the short term, some rationalisation could not be ruled out, he said.
Additives play a critical role in achieving the desired lubricant formulations to conform to environmental and industry needs, said the CEO of Infineum, Dominique Fournier, at the ICIS Base Oils and Lubricants conference.
The past 10 years had seen a reduction in NOX (nitrogen dioxide gases) and particulate matter by a fifth due to better additives, he said.
However, a big challenge was the huge costs associated with new product development, testing and qualification, according to Fournier.
For example, typical motor oil development took two to three years and could cost more than $2m (€1.6m), he said.
Although the profitability of the lubricant additive industry had improved in the past few years, the current economic slowdown could see growth rates slide into the negative from the present 1-2%, he added.
Fournier expected the industry to see an increasing move towards group II/III base stocks in mainstream formulations and a reduction in group I base oil demand.
Reduced supply of brightstock for the marine lube sector would remain a problem amid the declining demand for group I base oils, he added.
Although further consolidation was unlikely in the additives industry in the short term, some rationalisation could not be ruled out, he said.
source: www.ICIS.com
