6 March 2013

Supply security

A year ago in this blog, my colleague Thomas Guinot talked about the impact of force majeure we had declared just three months earlier on two of our products. Tight collaboration with all stakeholders and a seasonally slow demand had helped us to limit the impact on our customers and get away unscathed. But still, it has put everyone involved through a lot of stress, including our customers.

With supply chains becoming longer and more complex, supply security moves into the focus of organizations. Even small disruptions at one part of the chain have the potential to impact on costs and the relationship with the end customer. A fleet owner left without lubricants supply might have no other choice than to buy from competitors and for first fill business the cost of a supply disruption can be enormous. These are worst case scenarios of course, but they can happen. Rightly so, Neste Oil, like any other strategic base oil supplier, receives more and more questions about supply security and contingency plans.

When starting our joint venture base oil plant in Bahrain, supply security was a key driver for us. We can now react more flexibly on potential challenges in production because we are able to manufacture products of the same slate in two different locations. While in last year’s force majeure case flexibility on the customer side and being able to provide alternative formulations played an important role, the situation clearly demonstrated the benefit of having two production sites.

We are now happy to make one more step forward in offering our customers peace of mind: at the beginning of this year we have started production of NEXBASE® 3060 in our plant in Bahrain. It will nicely complement our established production of NEXBASE® 3043 and NEXBASE® 3080 at this location and further improve our supply security. Like all NEXBASE® grades it will be part of our global base oil slate and supported by an extensive portfolio of approvals. NEXBASE® 3060 will be commercially available from April 2013.

Sebastian Brandstetter
Sales Manager, Base Oils