UKLA President’s Report
The post Brexit decision economic news remains largely positive despite the economists’ forecasts that the UK would immediately plunge into a major economic downturn. That said there is clearly a long way to go before the full impact of the decision will be known and perhaps delays in investment by business until there is more clarity on the real impact.
On the 7th March the UKLA relocated to a new build office facility which will provide the opportunity to host some of our training courses in our own premises. This will generate organisational efficiencies and increased flexibility for members. The team has worked hard to ensure that member services operated seamlessly during the relocation and are now looking forward to a home that is designed to accommodate the needs of the association as we increase our member services.
The UKLA membership survey has just been launched and all members should expect to receive a call to gain feedback on the services we provide today and what members would like to see improved or added to what we have to offer. I hope you will take the opportunity to participate so that we can continue to provide value for money for the subscription fees.
David Wright is working with the University of Chester with the objective of developing a UKLA Registered Lubricants Professional Degree apprenticeship. This is intended to address the consistent message we hear about the difficulty in recruiting
new young talent into the industry and I would encourage any members who are considering apprenticeships to get in touch with David to discuss their interest.
Finally, I would like to take the opportunity on behalf of the UKLA board to thank Sebastian Crawshaw of OATS, who will soon be retiring from his position on the board of UKLA. Following the recent announcement of the sale of OATS to Haynes Publishing, Sebastian will step down from his position as Chairman of OATS and is looking forward to taking time with his wife to travel the world. Sebastian has been a valued member of the board and has contributed a great deal to the association and its members over many years. In particular he has been the custodian of EuropaLub as President; a task which has benefited greatly from his boundless tenacity. I am sure all members join me in wishing you a happy and healthy retirement.
Steve Mayo UKLA President
UEIL President’s Report
The first quarter of 2017 has been marked by the 21st ICIS World Base Oils and Lubricants Conference in London where representatives from base oils and lubricants companies gathered to discuss the latest devlopments impacting the industry.
A lot of focus was on base stocks and in particular on the impact of low crude oil price levels on base oil capacity outlook and new investments. According to Steve Ames, the pace of investments in new base oil plants and expansions should slow down in the coming years, partly as a consequence of the current supply surplus, but mostly due to oil companies reducing expenditures because of the protracted lower crude oil prices. However, the projects that are at an advanced stage will be completed, adding a combined 4 million tpa of API Group II and III capacity by 2021, which will further exacerbate the current oversupply that he estimated at 5 million tpa. The supply unbalance will be compensated by closures – with 6 million tpa capacity likely to disappear over the coming 5 years, according to Ames’ estimates. The production rationalization should impact primarily Group I plants.
The first provisional figures published by lubricants companies for the financial year 2016 seem to indicate that 2016 was a rather positive year for the industry, even if the global demand for base oils and finished lubricants seemed to have been flat in 2016 compared to 2015. In mature markets such as the US and Europe, demand actually declined slightly due to ongoing efforts to increase performance and efficiency leading to a lower lubricants consumption. While slight growth in demand in emerging economies balanced these losses, the overall market remained flat due to lower than expected rates of expansion in countries like China, India and Russia.
With the mature markets continuing on the trend towards increased performance and lubrication efficiency and therefore declining lubricant demand, the demand outlook for 2017 will be dictated by the economic outlook of emerging economies, with – once again – the attention being focused on markets like China and India, and on the long awaited recovery from recession of Brazil.
In Europe during 2017 sustainability
will be a hot topic on the agenda of many companies, since in the EU companies with more than 500 employees will have to prepare an annual sustainability report, starting on 1 January 2017 – possibly a first step of a process that might eventually also encompass smaller companies. Understanding how to develop sustainability standards for the European lubricant industry will therefore be of paramount importance. This will certainly pose a challenge to our industry, but will as well offer opportunities for development and innovation.
Innovation and sustainability will be the focus of the UEIL yearly congress that will take place on 25-27 October 2017 in the beautiful city of Bologna in Italy and that will represent an excellent occasion to discuss how our industry can be innovative and forward looking.
Valentina Serra-Holm UEIL President
LUBE MAGAZINE NO.138 APRIL 2017
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