18 October 2019

Industry Focus-Lubricants & Engine Oils

Lubricants market poised for growth

 

India’s fast track rollout of EPC infra projects, and opening of the mining sector due to the Mining Ordinance is generating substantial demand for lubricants.  However, the demand gradients are slippery with plenty of players in the market, and only branded lubes co-developed with equipment OEMs will sell more reports, CONSTRUCTION OPPORTUNITIES.

 

 

Fast Facts

  • The India lubricant market is expected to register a CAGR of 4.64 per cent, during the forecast period, 2018-2023.
  • The Indian lubricants sector is a 2.8 mmtpa market with the automotive segment holding 42 per cent volume share, industrial 23 per cent, transformer and white oils 23 per cent, process oils 8 per cent, and greases 4 per cent.
  • The rising trend of partnerships between original equipment manufacturers.

 

 

According to a report “Indian Construction Equipment Market Outlook 2018,” published by RNCOS, the Indian construction equipment market is projected to grow at a CAGR 19 per cent during the forecast period 2013-2019. Another report by IBEF projects Indian construction equipment market to grow threefold from 2015 to 2020, clocking a phenomenal CAGR of 50.9 per cent by FY20 at a projected value worth $ 22.7 billion, from $ 2.9 billion in FY15. A report by AT Kearney, ‘Building India’s Earthmoving and Construction Equipment Industry,’ projects India’s ECE industry at a robust CAGR of 20-25 per cent next few years. Such robust CAGR projections will generate concomitant demand for lubricants used in machineries – ranging from off highway equipment to stationary crushing & screening, batching plants, etc. The mining sector is also opening up majorly due to the mining ordinance, fueling major demand for mining equipment which use lubes. With both sectors projecting a robust growth rate, it will have a multiplier effect generating concomitant demand for lubes and engine oils in the Indian market.

The Indian automotive lubricants market stood at $4.9 billion in 2017 and is projected to reach $10.3 billion by 2027. Increasing preference for vehicles for personal mobility and easy finance options are driving sales of automobiles in India, which, in turn, is increasing demand for automotive lubricants. Moreover, low and stable crude oil prices are providing opportunities to automotive lubricant manufacturers to earn strong margins.

Additionally, continuously growing replacement market due to increasing awareness among consumers is further anticipated to propel the demand for automotive lubricants in India. Furthermore, awareness among consumers regarding the use of highly efficient engine oils and other lubricants is contributing towards the growth of synthetic base oil market in India. Overall lubricant consumption in India is projected to grow at an annual rate of 2.5 percent over the next five years, according to Kline’s “Opportunities in Lubricants: India Market Analysis,” a comprehensive assessment of the Indian lubricants market focusing on key trends, developments, challenges, business opportunities and major suppliers.

Kline expects the consumer segment to grow the fastest at a projected 6.6 percent per year, while the commercial and industrial lubricant segments will exhibit a moderate growth of 2.3 and 1.6 percent per year, respectively. In general, the overall subdued economic growth of the Indian economy will continue to affect the growth of commercial automotive lubricants, although economic growth is expected to pick up after 2015.

Ranking third after the United States and China, India remains one of the most important lubricant markets. Historically, India has been one of the fastest growing major economies. However, since 2010, the economic growth rate has successively dropped from 9.3 percent in 2010-2011 to about 5.3 percent in 2013-2014.

Automobile production in India has experienced a strong growth of 14 percent from 2007-2008 to 2012-2013. Like most Asian countries, India has a large percentage of two-wheelers, accounting for more than three-fourths of the total automobile production in 2012-2013. India is the world’s second-largest manufacturer of two-wheelers and exported 12 percent of them in 2012-2013. Consequently, motorcycle oil is the largest product category in the consumer automotive lubricants segment, with about 60 percent of the consumer automotive lubricants. Overall, consumer automotive lubricants account for 13 percent of the total market.

The market for commercial automotive lubricants declined in 2013 due to the retarded economic growth, as well as its impact on such sectors as logistics, construction, mining and agriculture. In India, more than half of the commercial automotive lubricant market is controlled by nationalized oil companies. Industrial lubricants is the largest market segment in India, with more than 54 percent of the total market. Power generation, chemicals, automotive and other manufacturing, railways, marine, and metals are the leading end-user industries, accounting for nearly 80 percent of industrial lubricant consumption.

India is a huge market for process oils as well, with 53 percent of the overall industrial lubricant demand. Rapid expansion of the power generation and distribution infrastructure has also created a strong demand for transformer oils in India. Industrial engine oils (including marine and railroad), metalworking fluids and hydraulic fluids are other important product categories.

The per capita lubricant consumption in India is quite low compared to developed countries. However, a comparison with other developing countries like China and Indonesia reveals significant potential in India for growth in lubricant consumption.

 

 

Top trends

 

Aqueous Lubricants

 

Wouldn’t it be interesting if topping up an industrial fluid could be done by water alone? The idea of replacing conventional organic lubricants or solvents by water-based solutions is both appealing and exciting for many applications and in many different areas. Such solutions may not only have a high potential for improvements, but they also help address environmental concerns. Conventionally, these have been widely used in metal-working applications for a long time, where usually an aqueous solution of an organic, polar, surface-acting composition, which is a phosphate or phosphite of an alcohol-ether and soluble in water at room temperature, is used. Mineral or even synthetic oil-based lubricants suffer from the drawbacks of flammability, disposal problems and other hazards. Accordingly, for some time there has been increased interest in developing water-based lubricants.

A series of recent patents on aqueous lubricants include applications as metal-working lubricants, drawing lubricants, cold-forming lubricants, lubricants for conduits and raceways, lubricants for saw chains, non-flammable electric-discharge machining fluids, lubricants for plastic working, pre-lubricated cable fluids, smart cutting fluids, anti-traction compositions and many others signifying this fast-developing field. Such products use many compounds including PEG, polsymeric polyelectrolyte acrylates, polyalkine oxide compounds, polyacrylamide compounds and various others.

 

Slick and Super-hard Solid Lubricant Coatings

 

High-tech self-lubricating coatings can be applied to almost any metal-using engines and  machinery. Compared to uncoated surfaces, in both laboratory and engine tests, such coatings can reduce friction by up to 80 per cent and can greatly minimize wear and scuffing. Such coatings will be of considerable interest for use with newer lubricant alternatives, such as bio-lubricants, especially the ones that are biodegradable, non-toxic and sustainable. The sectors that may particularly benefit from these include shipping and railroad, yard equipment,construction equipment, conveyors, and many others. Such coatings today are looking at molybdenum, copper, silver, antimony and tin.

High-tech vaporization, cold sprays, evaporation and vacuum technologies are used in their preparation. These coatings can also be nano-structured and/or in nano-composite forms. These provide better performance under very severe sliding conditions. The coatings can be coupled with smart surface engineering strategies such as micro-texturing or patterning. For some applications, these coatings are now commercially available. The shortcomings of such coatings are to be clearly understood before deciding on a particular application.

 

Conclusion

 

After a decisive victory in the 2019 general election, the Indian government has a mandate to carry out its program of economic reform and infrastructure development. This cements India’s position as one of the fastest-growing large economies. Improving consumer spending, accelerating infrastructure development, and stronger FDI inflows in India are creating the potential for rapid growth in the lubricants industry. Poor air quality is forcing the Indian government to tighten emission limits and improve fuel quality. The introduction of Bharat Stage VI in 2020 will drive lubricants quality improvement.

Eventually after a sluggish start and growth, the Indian lubricant market has been witnessing a good time from the last two years. Their role in reducing friction and thus maintaining the durability and the functionality of any machine or product is a game changing one in each sector. Continued momentum in personal mobility space coupled with some recovery in commercial vehicle and industrial segments is driving the demand for lubricant in India. Though rising oil prices may pose a challenge, pick up in mining and infrastructure activities will brighten the prospects of lubricant makers and lubricant manufacturing companies can expect to augment demand for automotive lubricants in India over the next five years.

 

 

 

With introduction of BS VI emission norms from April next year , GS Caltex is already ready with its futuristic portfolio to meet the demands of the industry. We have already invested in developing our PAO based Kixx range (Kixx DX EURO 15W40– API SJ4) to meet future demands of the sector. Product categories meeting API CK4 and API FA4 standards are also ready for launch and will be in market as India moves to stricter emission norms towards BS VI.

Jayanta Ray, GM, Industrial & OEM, GS Caltex India Pvt Ltd

 

 

 

 

 

One of our technology for construction and mining is DYNAVIS® technology and its value proposition is “More Power Less Fuel”. Even at low temperatures, DYNAVIS® formulated hydraulic fluids allow for a quick start-up and easy flow to lubricated areas. From start-up to shut down, DYNAVIS® formulated fluids do more work in fewer hours, providing more power with less fuel.

Sanjeev Taneja, President & MD, EVONIK India