Continued from page 37 A moving map

In terms of shifts in geographical influence for the lubricants industry, most of us predict overall growth of both supply and demand but with a continuing change in world balance.

According to UEIL President, Valentina Serra-Holm: “The production footprint is not likely to change dramatically over the next decade. Asia will continue to play an important role as demonstrated by, for instance, the impact of the Industry 4.0 program kicked off by the Indonesian government at the end of 2018. This was designed to improve the flow of goods, empower SMEs, increase foreign investments and strengthen the national digital infrastructure and will generate new opportunities in automation and robotics, IoT, and advanced production methods, which will likely positively impact the lubricant industry.”

However, almost without exception, the experts cite the ongoing trade war between the US and China as arguably the most significant political influence on the lubricants industry. According to ILMA: “As 2019 came to a close, it appeared that progress was being made toward resolution of trade issues between the US and China. If there’s an agreement to be made, it will happen early in 2020 and will be fairly modest in scope. If negotiations drag out through Spring, all bets are off.”

Most also believe that Africa will emerge as a more important region, with growth being predominantly driven by direct investment from China, India and the Middle East. Valentina states: “On the demand side, an upside could be represented by a growth in demand in Africa, as most of the developed countries in the region are focusing on mechanisation in their key sectors, such as mining and agriculture, supporting an increased lubricant demand.”

For some, such as Jim Douglas, Senior VP of Warren Distribution – the picture is more confusing: “Africa and India to me are enigmas because, as regions, the adoption of better technology and use of high quality lubricants have economic impacts that the growth doesn’t appear able to support at this point. It seems the cost aspect can only change through the development of regional production, but it hasn’t fully begun as yet.”


However, Jim sees trouble ahead in Latin America. “The most recent conflict in Chile has impacted our Distributor partner there very hard and thus we are seeing reduced volume. Likewise, the continued unrest in Ecuador, Honduras, and Guatemala continues to affect not only our distributor relationships in those countries, but also the region overall. All this potentially leads to further instability and from a macro-economic basis, it can impact lubricant sales in the respective countries and regions.”

emissions by the amount needed. Fossil fuel companies will continue to fight it whilst trying to not be seen to be the villains and a key concern will be avoiding throwing low income families into fuel poverty. Carbon dividends for citizens, as advocated by the oil industry, address this but do not appear to be a preferred option for Governments at this time.”

Terry Dicken, Chairman of ELGI, thinks: “lubricant companies will continue at a pace to develop bio derived products, where the performance of such products can now match that of conventional petroleum-based lubricants... but sales will not take off without Government incentives”.

The changing nature of the automotive industry, due to electrification and changing vehicle ownership patterns, is leading to huge consolidation amongst the OEMs – evidenced by the latest merger between Fiat Chrysler and PSA. The impact on the Lubricants industry will be enormous and will start to bite in this decade, but it will also drive significant innovation.

While it is clear that EVs are here to stay, there are mixed opinions regarding how quickly the adoption tipping-point will arrive – or even arrive at all – this decade. The outcome of the battle for dominance between electric and hydrogen cell technology, according to ILMA, is also likely to be decided by the middle of the decade.

The current climate The climate emergency, which is driving the development of bio-fuels/lubes and alternative- powered vehicles, is set to be a major theme in this decade. Independent consultant and BP Castrol’s former Technical Manager, Brian Utton, summarises: “Climate change will increasingly drive markets and policies as the effects become more and more visible. Carbon taxation will become more punitive as people realise current levels are ineffective in reducing CO2

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