15 October 2014

At the cross-roads

Written by Thomas Guinot
Published in Oil products

Due to additional base oil capacities, intense OEM and industry's technical requirements, and supply chain's imperatives (flexible, global and providing business continuity) the lubricants industry is entering a new era, more rapidly than anticipated.

Every stakeholder must understand that our industry is at cross-roads. Therefore, it is all about choices. Base oil suppliers have to address these changes with sustainable strategies. There are different routes to do that:

  • Add non-approved Group III molecules to an oversupplied market
  • Focus on limited capacity
  • Change radically the product portfolio and move to another industry
  • Stay committed to customers and to the market

Neste Oil is choosing the latter route. There are two reasons for this commitment. Firstly, one of our key strategic objectives is to be recognized as a leader in knowing and anticipating our customers’ needs. And secondly, we regularly receive important feedback on NEXBASE's excellent, stable, and consistent quality over the years. The premium lubricants market is rapidly globalizing and therefore, the question of consistent quality is increasingly becoming central for lubricants formulators, blenders, OEMs, and end users.

Therefore, directing our focus and resources to deeper understanding of the industry's value chain is highly critical:

Professional, curious, and committed people (Sales & Marketing, supply chain, technology) are a ‘must-have’ to create excellence in customer's intimacy and anticipate their future needs.

Base oils have not been the strongest element of the lubricants industry's value chain. The value of approved Group III base oils must be enhanced. Neste Oil is amongst the few Group III providers which heavily invest in R&D and product qualification programs in cooperation with the additive companies for the benefit of the finished lubricant blenders and marketers. This has been the case for the last 15 years, and will continue be so, provided the market will value approved Group III molecules at the right level.

Neste Oil shows more active participation in a number of industry meetings (API, ILSAC, ATIEL, ASTM, CEC, CEN, etc.), proving our commitment to influence and evolve with the industry.

Group III suppliers should be involved early in the new product development phases; Neste Oil has started direct connection with certain OEMs to gain better understanding their expectations towards Group III base oils.

Changes = opportunities!

Group III molecules are getting more and more essential to the lubricants industry. They support product portfolio upgrading (performance, supply security and better marketing positioning) in a variety of segments (main and high-tier automotive, certain industrial applications, driveline) while providing logistics optimization.

This increasing responsibility is a real opportunity for us to build new partnerships and cooperation with several industry stakeholders.

Let’s welcome the changes and work together to bring our industry towards this next challenging and exciting era!

Thomas Guinot
Technology and Marketing Services Manager