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Metalworking News

COMPOUNDINGS Magazine Article Review, "Lubes Wanted"

Posted by Hill and Griffith Company on Jan 29, 2019 5:18:26 PM

Demand for industrial lubricants to continue in Asia in 2019

Asia’s demand for industrial lubricants is expected to continue in 2019. Increased foreign investments during the trade war between the U.S. and China in 2018 and mega development projects implemented by governments will continue to spur industrial growth.

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Article by Lam Lye Ching and published in the January 2019 issue of COMPOUNDINGS Magazine, published by the Independent Lubricant Manufacturers Association. Read the entire article here.

“Demand for industrial lubricants in developing countries is anticipated to grow faster through 2021 than in the developed world. Higher levels of new capital formation, particularly in India and China … and faster-growing levels of trade will increase lubricant demand in manufacturing and transportation equipment applications, respectively,” The Freedonia Group, a Cleveland-based industry research firm, said in its Global Industrial Lubricants report.

“Asia-Pacific, already the leader in demand for industrial engine oils, will undergo the most volumetric growth,” it added.

For metalworking fluids, “the [Asia-Pacific] region is likely to retain its global share by 2025 and witness maximum growth. Rapid industrialization, along with increasing automotive sales, are major factors propelling the product demand in this region,” said U.S.-based business consultancy Global Market Insights Inc. The company said the market for metalworking fluid reached more than $10 billion in 2017. With the imposition of U.S.-China trade tariffs, including on lubricants and additives, in 2018, Southeast Asian countries’ geographical proximity to major markets including China and India attracted manufacturers wanting to move their Asian bases out of China.

In the first half of 2018, net foreign direct investment (FDI) flow into Southeast Asia increased 18 percent to $73 billion compared to the same period in 2017, according to the U.N. Conference on Trade and Development.

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Southeast Asia was also the top destination for U.S. companies in China considering relocating manufacturing facilities, according to a survey by the American Chamber of Commerce in China, conducted after the U.S. imposed duties on $200 billion in Chinese goods between Sept. 21 and Oct. 10, 2018.

“Thailand is the manufacturing star of Southeast Asia, particularly when it comes to automotive and food and beverage manufacturing,” said Goh Teik Chuan, analyst in the Manufacturing Technology group at IHS Markit, a London-based information provider.

The machinery market in Thailand is expected to achieve 9.9 percent year-over-year growth in 2019, exceeding the $3.8 billion of 2018. “That momentum is predicted to continue at a compound annual growth rate (CAGR) of 8.1 percent, from 2017 through 2022,” said Goh.

However, the “machine tools landscape has not changed much; there are big machine builders in the United States like HAAS, but we do not see it overtaking the Germans and Japanese anytime soon,” he added.

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“Machines in Thailand are diversified, and for the industrial sector, we will continue to expand our product range, especially greases,” he said.

“Machines are from U.S., China, Europe and Japan. It is very important for lubricant companies to fulfill their requirements in a unique way. As a small manufacturer of oils and greases, we can meet these specific needs very well,” he added.

The company, which toll blends grease, described that “it is very common for a sugar factory to have a modified crusher and different materials of plain bearing used in their mills. The factory also applies different lube centralization systems. Therefore, they require customized products with a special EP [extreme pressure] property, a specific hardness greases or extra corrosion-resistance property.”

The company supplies greases to several industries in the region, including mining, construction and steel mills, and plans to expand its product ranges to other applications in the food and windmill industries.

Asia’s economic giant, India, is expected to continue its growth. “India’s [gross domestic product] over the next three years is expected to be in the range of 7.4 percent to 7.7 percent. Industrial lubricants is estimated to grow by 4 percent, which would be higher than the global rates,” Shailendra V. Gokhale, managing partner and founder of Rosefield DAA International Consultancy LLP, told Compoundings. The company is based in Mumbai, India, and specializes in business consultancy for the lubricant industry.

Gokhale says that the Indian lubricant market involves two segments: the low-end commodity, or general market, lubricants and the high-performance lubricants.

“Also, it is important to note here that most of these players are blending and selling products locally, so they are preferred over imported lubes in India,” he added.

Blending in India may also be an option for foreign players, especially with the reduction in the goods-and-service tax (GST) for base oils to 18 percent last year. “With reduction in GST, it would be absolutely an attractive option allowing foreign players to be closer to their customers,” said Gokhale.

Although barriers to market entry have eased, local knowledge is key. “Indian industrial users always feel more comfortable working with local companies producing and offering the products at local level, purely from a service point of view. They will go to foreign blenders only if they are not getting cost-effective solutions from local players,” he added.

Gokhale sees potential in the Indian market. “India is growing exponentially, and the Indian government has embarked on an ambitious initiative called ‘Make in India.’ So, there are enormous opportunities for industrial lubricant blenders from the United States and, in my view, this is a right time to enter India,” he added.

Ching is a journalist and freelance writer based in Singapore.


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Tags: metalworking fluids, metalworking lubricants, industrial lubricants

 


Hill and Griffith Customer Service

We're known for our hands-on approach. Let us visit your plant and recommend metalworking fluids that suit your needs. Products that represent the latest in technology and ongoing research that enhance competitiveness and increase productivity.

Hill and Griffith Samples

Product Samples

We are pleased to provide samples in quantities large enough to allow you to "try before you buy." Metalworking fluids, Die casting and squeeze casting lubricants, Casting operations products, Water glycol, Trim press lubricants, Surface protection for casting storage, Corrosion protection for die storage, Cleaners for machines and dies, Corrosion protection for machines, Heat treatment quenchants, and Heat-transfer fluids. Also, Industrial lubricants Griflube®, Hydraulic fluids with fire-resistant and anti-wear properties, Bio-Syn natural ester-based hydraulic fluid, and Way oil knuckle lubes.

Contact us for Product Samples

Hill and Griffith Customer Service

Technical Services & Support

On-site process surveys, Defect investigations, Product testing, Tooling start-ups and Statistical process controls and much more. Also, lab facilities are available to provide testing upon request.

Arrange a Metalworking Solutions Visit

Bulletins and Technical Papers for Metalworking Products