What is the potential of the

biggest lubricant market in Europe?

Elmira Gabidullina, Evnika Polovinkina, GBC Ltd

Over the last couple of years, Russian lubricant producers, both large and small, have been eager to increase their market share and replace international brands. Since prices of imported lubricants went through the roof along with the Euro and USD exchange rate, some local companies have focused on modern technologies and on improving their products in order to reach the level of their overseas counterparts. The outcome was fast, and in 2016 major players started talking about the growth of sales.

On 23-25 May 2017 in Moscow, the CIS Base Oils and Lubricants conference gathered together industry experts and professionals from Russia, CIS region, their international peers, and global and local think tanks. The event shed light on what we can expect from the largest lubricants market in Europe in the near future.

Global trends Apu Gosalia from Fuchs Petrolub, entitled his presentation “Markets in Motion,” a title which perfectly reflects the current feeling of a changing environment which is making producers and market players reconsider their strategies.

Analysing the lubricant market development over the last 10 years, Apu Gosalia pointed out that, in volume, global lubricant demand is stable, however, on a regional level we can still see sharp contrasts between regions such as the Middle East (growth of 0,7%) and Southern America (decreased by 0,8%). Nevertheless, even taking regional difference into account, experts do not expect any significant changes from lubricant consumption globally and the demand growth will continue to slow down.

Why is there a feeling of motion in the stagnating market? The business environment itself is changing with new drivers and disruptors. That is something the lubricants industry has to react to. Apu highlighted some of the influencing factors and “disruptors” which are changing the usual business patterns. The main driver is competitive landscape change, which is about new players coming to the market from other industries, from NOCs “globalisation” and major restructuring, as shown in Figure 1.

Digitalisation is the main “disruptor” which can change relations between consumers and producers. Start-up companies are approaching lubricants consumers directly and are offering them services to optimise the whole plant or digital solutions on how to choose specific lubricants. In this case, lubricant manufacturers become just blenders, rather than solution providers.

Changes are happening very fast, but the main question remains: “What will the demand for the lubricant industry products be?”

Industrial Lubricants Market Presenting at the CIS Base Oil and Lubricants conference in Moscow, Sharbel Lusuriaga from Kline said that, according to the research, projections for 2017 remained positive, despite uncertainty surrounding the policy mix to be adopted by the new US administration, and geopolitical and crude oil price instability. The Russian lubricants market, currently at 1,640 KT, is expected to recover after consecutive years of contraction.

Kline suggests that the Russian energy, extractive and heavy manufacturing industries continue to drive the demand for industrial lubricants with the following breakdown, see Figure 2.

Figure 1.



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