Today 40% of the world’s lubricants market is in Asia, where over half of the planet’s vehicles are manufactured. Repsol entered the region through Indonesia. It used to export its oils to this country but in 2006 local manufacture began and the business took off.
On that continent, its lubricants are sold in eleven countries, to be joined by Thailand, Vietnam and Pakistan this year. Asia is a key world region in the company’s international strategy “because our technology, our know-how and our brand, known in many places thanks to MotoGP, give us competitive advantages”, affirms Portela.
The demand for lubricants is growing in Asian countries, linked to the growth in the vehicle pool. “Here China is worthy of distinction. A market that makes sense just for itself” and which in 2013 absorbed 25.7% of world vehicle sales, according to the international organisation of motor vehicle manufacturers OICA. “China, also, seems to back lubricants with European technology levels, sophisticated and environmentally friendly, where we have more to say” continues Pascual.
The Asian market covers diverse realities from countries in the throes of industrialisation such as Vietnam to very competitive markets like Japan, a difficult country for foreign lubricant firms “but where we have to be present because it is a technological and cultural reference for all of Asia”, asserts Pascual.
Repsol manufactures lubricants in China, Japan, Indonesia and Malaysia. All Asian factories work with a “Do it for me” contract, whereby the local partner takes care of production and Repsol charges “royalties for sale of the know-how, which is not only the technology, but also the brand and commercial track record”, explains Portela. The company markets 1,500 references worldwide and in many countries local ranges are manufactured to adapt “to the long list of product nuances, aesthetic tastes or environmental sensitivities of each market”. Indonesians, for example, prefer a 800 cm3 container for motorbike lubricants whereas in the rest of the world it is distributed in 1L canisters.
China absorbed 25% of global car sales in 2013
Technological efforts are also directed at generating biodegradable lubricants conceived for more specific uses, such as farming machinery or outboard engines. Industrial and automotive oils, which are the major share of consumption, are recycled in most European countries. In Spain, the integrated management system (SIGAUS) makes sure that used lubricant oil is collected from workshops and industrial plants and is used to produce regenerated oils or for recovery as a power source.
Fuel-economy lubricants help to reduce emissions by saving fuel
Lubricant bases are grouped together on the basis of their mineral or synthetic origin. Traditional lubricants, known as Group I, are manufactured from mineral bases obtained from crude oil distillation. Among synthetic bases there are semi-synthetic lubricants, which come from oil, to those manufactured through pure chemical synthesis, such as ester. More costly to produce, synthetic bases provide however better performance and require less frequent oil changes.
This year, next to the Cartagena refinery a new production plant will be inaugurated for Group III lubricants, the most commonly used synthetic bases. The new factory, with the capacity to cater for almost half of European demand, is a joint venture between Repsol and SK. The Korean group is the world leader in this type of lubricants and only has three production centres in the world: in Korea, Indonesia and now in Spain. An industrial alliance devised for an automotive lubricants market where “the future, which is already here, is in synthetics” concludes Portela.
The Cartagena plant will cover 40% of European demand for Group III, the automotive lubricants of the future