Europe’s Lubricant Makers Brace for More Competition

European lubricant makers face heightened competition as emerging-market competitors look to increase exports, according to Fuchs Petrolub SE, the world’s largest independent supplier.

Consolidation, a new wave of entrants such as Cosan SA of Brazil and increasing interest in the industry by private-equity firms are among factors intensifying rivalry, according to Apu Gosalia, head of competitive intelligence at Fuchs Petrolub. “It’s quite challenging,” Gosalia said at the 18th ICIS World Base Oils and Lubricants Conference in London.

The answer for European providers is to focus on niche, high-quality lubricants, and look toward the growth markets of eastern Europe, including Russia and Ukraine, he said. The top 10 lubricant makers, led by Exxon Mobil (XOM) Corp. and Chevron Corp. (CVX), account for more than 50 percent of sales.

Chevron is poised to begin production at its $1 billion Pascagoula base oil plants in Mississippi. Final testing of equipment is underway, according to Brent Lok, the company’s global manager for base oils. The U.S. company has transformed what was a regional operation serving the U.S. west coast into a global business.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.