Asian lubricant manufacturers draw attention to “unhealthy” competition and rising costs

Cost is the number one issue for Lubricant Manufacturers in Asia, says Paul Nai, Director-Product Management, Lubrizol Additives, Asia Pacific, Lubrizol Southeast Asia Pte Ltd. Nai, speaking at the Asian Lubricant Manufacturers Union (ALMU) Annual Meeting & Global Leadership Summit at the Grand Hyatt Singapore on 5 March 2019, presented the results of a comprehensive survey of ALMU members conducted between September 2018 to February 2019.

Members of ALMU are unhappy about the impact of low cost, low-quality suppliers on the local market, with many citing concerns around unethical practices causing unhealthy competition. Feedback from members suggests many low-cost suppliers are neglecting performance expectations.

Rising costs are also a key area of concern, says Nai, coupled with the increasing difficulty of passing increases on to customers. Escalating costs were attributed to the price of raw materials, base oil supplies, and a high cost of distribution. Nai also highlighted a mounting cost of regulation as companies strive to adhere to environmental and compliance protocols.

Nai identified several other high-profile concerns including variations in raw material quality and reliability of supply, and uncertainty around technological advancement. Specifically, Nai cited fears around the impact of electric vehicles on engine oils and lubricants, and how digitisation is affecting the way individuals consume goods and services. There is a desire for strong technical support within the industry, he says.

Survey responses also addressed issues around knowledge, with members feeling the value the industry creates is not always appreciated or understood by those who use our products. Several companies also identified an unwillingness of OEMs to share information on new specifications as they are developed.

Finally, Nai identified regulation and government relationships as a primary issue. A lot of governments do not consult with the industry, or there may be only a select group included in the consultation. Members called for enhanced collaboration on legislation and enforcement.