INTERVIEW Continued from page 23
then you can expect that kind of downturn, but if we look at the big growth that’s coming into Asia-Pacific with so many people moving into the middle class, and we look at the demand for cars and for crude oil, that’s projected to steadily go up over the next 25 to 30 years. So, even though the pace may moderate, there is still good growth in this sector.
A good relationship between additive companies and OEMs is essential. The future operating environment presents challenges for both the additive companies and the OEMs and it’s important that we are working together to help enable new technologies to be introduced. For instance, things like evolving our offerings for the higher requirements in terms of lower emissions and delivering improved fuel economy that the next generation of vehicles require.
In Europe, and possibly America as well, the average age of cars is increasing, with people retaining their vehicles for longer. In terms of formulating new additive packages to respond to new regulatory demands for lower vehicle emissions, how do you create that balance between the need to keep existing customers happy at the same time as satisfying regulators with new products that will meet their demands?
DK: It’s a huge challenge, but one we have been able to meet for many years. However, it is getting more difficult. For example, if we look at the GF6 delays, a lot of those were due to the large number of increased tests that we are required to make. We certainly expect the new products to be backward compatible, but GF6 has taken so long and cost so much, and that has had an unbeneficial knock-on effect for customers, because it takes so long to get these new products to the marketplace and to have the impact that we hoped GF6 would have. We’re very encouraged that the industry has come together to look at the entire process for automotive engine oil development.
The new challenge is meeting the higher expectations of engine performance, but is also ensuring that older vehicles aren’t disadvantaged.
In 2017, Chevron Oronite celebrated 100 years of the brand, and over that time we’ve seen the world fall in and out of love with the motorcar.
24 LUBE MAGAZINE NO.144 APRIL 2018
Do you have any further thoughts on what challenges the next 100 years might bring to Oronite’s business?
BC: Most forecasts expect global energy demand to rise, as populations grow, incomes rise and people all over the world strive for higher living standards. For lubricants and additives this means sustained growth in developing markets, even accounting for conservation, energy efficiency improvement and new technology such as electric vehicles and hybrids. In the area of government policy and regulation, policies addressing environmental, economic and energy security needs will continue to push emission reduction and fuel economy to their technological limits, demanding continuously improved performance from lubricants and additives, while potentially impacting the scope and speed of change in the consumers’ transportation choices.
As far as industry investment is concerned, we’ve seen strong financial performance and sustainable growth models lead to some selected investments in the additives industry. We think the majority of such capacity additions are likely behind us for now, but businesses and markets are constantly changing their investment decisions based on their perceptions of what the future will bring, so we’ll see if this picks up again.
In the area of technology, I think internal combustion engines and hydrocarbon fuels will remain a leading choice, however, the increasing diversity and complexity of vehicle technologies, fuel mix and power sources will increase significantly. This will likely moderate the pace of additive demand growth, especially in cars and light duty vehicles longer term.
And finally, what advice would you both give to newcomers to the lubrication industry?
DK: Come on in! It’s a really exciting business. 20% of Oronite’s workforce is in technology. The additives side of the business is very high-tech and is making a big difference to society. We should not underestimate the important role the lubricant industry plays in helping society meet its goals.
LINK
www.oronite.com
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