The United States still has the largest overall vehicle parc at about 265 million vehicles on the road in 2016, he said, with some growth yet to be had. While Chinas light vehicle fleet is around 180 million vehicles this year, that amount is expected to nearly double by 2021. India is also expected to experience a near doubling in light vehicle fleet size, he said, though in that case to around 50 million vehicles by 2021.

Fleets in countries such as Japan, Germany, France, Brazil and Russia are projected to either remain flat or experience only modest growth through 2021. Emerging markets have a significant opportunity to grow vehicle parc, which obviously has implications for both OEM supplier and aftermarket alike, Wall said.

Although light vehicle sales are expected to top 100 million per year by 2021 and keep growing through 2023, he said, the rate of growth is expected to peak at close to 3 percent in 2019 before declining during subsequent years to about 2 percent in 2023. IHS Markit ny projects China will lead with 26 million vehicle sales for 2016, followed by the United States at 17.4 million, Japan with 4.8 million, Germanys 3.6 million, India at 3.4 million, France with 2.4 million, Brazil at 2 million and Russia with 1.4 million.

Total to Blend in Russia

French oil major Total broke ground in October on its first lubricants blending plant in Russia, a project that could dovetail with the countrys emphasis on localizing production and reducing reliance on imports. The plant will have initial capacity to produce 40,000 tons per year of finished lubricants, with the ability to increase that number by 35,000 t/y, Total Vostok, the Russian subsidiary of Total, said in its press release.

The plant will be built on a 17-acre plot in Vorsino, Kaluga Oblast, in the center of the European part of Russia. The U.S. $50 million plant is expected to be ready by 2018, under an investment agreement signed by Kaluga Gov. Anatoly Artamanov and Total Vostok General Director Fabien Voisin.

Total Vostok said the plant will produce a wide range of automotive and industrial lubricants. It will feature flagship Total brands such as Quartz passenger car motor oils, Rubia heavy-duty vehicle engine oils, and Azoll and Equivis hydraulic oils, as well Seriola and Carter industrial oils and other products. Total and Elf, another brand of the French oil major, are among the top 10 most popular motor oil brands sold in Russia, according to consultancy Ernst & Youngs Moscow oil and gas center.

The plant is being built in an industrial park with direct links to European Russias main road and rail infrastructure. The plant is expected to employ about 50 people when completed.

Rosneft Buys Control of Bashneft

The Russian government approved Rosnefts bid to buy a majority stake in Bashneft, a regional player in the oil and lubes sector. The government is selling its 50.08 percent stake in Bashneft as part of a broader asset sell-off aimed at raising cash.

The deal consolidates control of the nations base oil and finished lubricant sector. Rosneft is Russias second-largest finished lubricant producer, producing a combined 779,000 metric tons of base oils and finished lubes in 2015 compared to Bashnefts 170,000 tons.

According to Russian news reports, some members of Vladamir Putins cabinet argued that the government should not sell its stake in Bashneft to another state-controlled oil company. Federal agency Rosneftegaz holds a 69 percent stake in Rosneft. The Economy Ministry has said it will sell a 19.5 percent stake in Rosneft by next month.

Bashnefts Novo-Ufa refinery includes an API Group I base oil plant with capacity of 220,000 tons per year and a lubricant blending plant. Moscow-based Rosneft markets lubricants through its RN-Lubricants unit. It also operates one 200,000 t/y Group I plant in Angarsk and another of the same size in Novo-Kuibyshev.

After the Bashneft nationalization, the Russian governments plan has been to sell it to a private investor, preferably domestic, to fill the budget gaps in an environment characterized by recession and a stagnant economy. Igor Sechin, chief operating officer of Rosneft and a Putin ally, jumped into the game, offering 330 billion rubles (U.S. $5.3 billion) for the governments stake. Its a price that no other Russian oil company, including Lukoil, has been willing to offer.

Bobokovs Regain Prista Ownership

The majority owners of Bulgarian lube maker Prista Oil Group have repurchased a 30 percent stake held jointly by an institutional investor and a private equity firm. Brothers Atanas and Plamen Bobokov said the four-year involvement of the European Bank for Reconstruction and Development and ADM Capital helped stabilize the company and that it is prepared to resume a growth track under the Bobokovs full control.

Prista Oil operates blending plants in Ruse, Bulgaria, and in Turkey, and it has operations in 40 countries worldwide. Prista said its buyback was financed by a 50 million loan extended by UniCredit Bulbank. The transaction includes refinancing of shareholder debt and refinancing of project financing.

Prista Oil Groups primary businesses include production of finished lubricants and greases, controlled by Prista Oil, and manufacturing of car batteries, operated by Monbat, one of Europes largest battery makers. Prista also owns part of the Central and Eastern European operations of the United States-based Chevron, including rights for limited production, distribution and marketing of Texaco-branded products in 14 states in Central and Eastern Europe and in Central Asia.

Good News for Nigeria, South Africa Lube Markets

Nigeria and South Africa rely heavily on imported raw materials for automotive lubricants. However, the volatility of oil prices and the devaluating currencies in both countries are set to provide a huge boost to the local production of automotive lubricants, according to a recent study by Frost & Sullivan.

The consultancy noted in a news release that a combined market in the two countries of U.S. $2.14 billion is driven mainly by the demand for engine oils. But there has been a perceptible rise in demand for other lubricants like transmission oil, gear oil and coolants.

The study found that the hike in demand for lubricants stems from a rising prominence of the middle class in both countries, which has boosted vehicle sales. Nigerias annual motorization rate is 8.5 percent and is tied to the countrys gross domestic product, which increased by 7 percent in the past 10 years.

South Africa is a well-established vehicle manufacturing hub, and Frost & Sullivan noted that this sector is expected to flourish over the next three to seven years, translating to a more expansive market for automotive lubricants.

The vehicle parc, including old and new vehicles, presents a myriad of opportunities for automotive lubricant manufacturers. According to Visionary Science Industry Analyst Lynessa Moodley, The market is ultimately gravitating toward higher-quality, specialized and synthetic lubricants due to an increase in end user awareness about the importance of lubricants. This can primarily be attributed to pending government legislation regarding emissions, improved engine technology and original equipment manufacturers requirements for fuel efficiency.

Access Analysis of the Automotive Lubricants Market – Nigeria and South Africa at frost.ly/yo.

HollyFrontier BuysPetro-Canada Lubes

HollyFrontiers acquisition of Suncor Energys Petro-Canada lubricants business for U.S. $845 million will diversify HollyFrontiers base oil portfolio to include API Group II and III base oils and also make it a prominent player in the finished lubricants market. HollyFrontier expects to fund the transaction with a combination of debt and cash on hand.

Subject to regulatory approval and closing conditions, the transaction is expected to close in the first quarter of 2017. HollyFrontier forecasts $20 million of synergies from the acquisition, not counting any benefits from feedstock optimization.

Petro-Canadas refinery in Mississauga, Canada, has a base oil plant with 11,600 barrels per day of API Group II capacity and 4,000 b/d of Group III capacity. Reuters reported on Oct. 21 that Suncor was auctioning the Petro-Canada lubricants business. Besides the Mississauga plant, HollyFrontier receives a perpetual exclusive license to use the Petro-Canada trademark in association with finished lubricants.

Acquired assets also include a blending plant that includes three inline blenders and a multistep batch blending operation. Packaging capabilities range from 1-liter to bulk containers.

Chevron Expands Multisols Territory

Chevron Belgium N.V. announced that it has renewed its contract for European distribution with the base oil and additive distribution company Multisol Group, based in Daresbury, U.K. As part of the extension to 2019, the territories covered in the contract were expanded to include Croatia, Slovenia, Bosnia & Herzegovina, Serbia and Slovakia.

Multisol first began supplying European customers with Chevron API Group II premium base oils in 2009. In addition, the company offers the lubricant components necessary to blend a full spectrum of finished lubricants, including PAOs, Group III base oils and additives. Multisol maintains storage tanks for Chevrons base oils in Antwerp and operates blend plants in Rouen, France, and Irlam, U.K.

Shell Supplies K-stans from Russia

Shell has started supplying lubricants to Kazakhstan and Kyrgyzstan from its lubricant blending plant in Torzhok, Russia. The plant has the capacity to produce 200 million liters of lubricants per year, and this plan provides a significant increase in its capacity utilization.

Shell said in a news release that supplies started flowing to the two countries early in the summer and have increased through September. Shell did not announce the exact volume being shipped.

Brenntag Acquires Noco Division

Brenntag has signed an agreement to acquire the lubricants business of Noco Inc., headquartered in Tonawanda, New York, United States. Markus Klhn, CEO Brenntag North America, said in a news release, Nocos lubricants business ideally complements our lubricants business in New England, which we established last year with the acquisition of G.H. Berlin-Windward. We will be able to leverage existing infrastructure, add additional talent and solidify our leading market position.

Noco supplies lubricant products to a broad range of industries in the Northeast region of the United States and parts of Ontario and Southern Quebec. The acquisition does not impact Nocos energy distribution or retail businesses.

The business is expected to generate total sales of approximately U.S. $209 million in financial year 2016. Closing of the transaction is subject to contractually agreed conditions.

White Oils to See Myriad Changes through 2020

The global demand for white oils is estimated at 1.6 million tons in 2015 and has been increasing only moderately over the past four years, according to Kline & Co. research. Global White Oils: Market Analysis and Opportunities shows that Asia-Pacific is the largest white oils consuming region, followed by North America and Europe. South America saw a dip in white oil demand since 2011 due to Brazils contraction as a consequence of economic crisis.

According to Kline, close to 70 percent of white oil demand in key markets is for products based on API Group II base oil. Traditionally, white oils have been made from paraffinic Group I and naphthenic basestocks. However, the consultancy said Group I usage has been shrinking, whereas Group II, III, and gas-to-liquid suppliers have been successful in creating a market for themselves.

Chinese national oil company Sinopec is the leading supplier in key markets, with a 25 percent market share. Calumet is the leading supplier in North America, and it also supplies Brazil and other countries. Markets in India, the U.S. and Europe have intense competition because of the presence of many producers and blenders, resulting in thin profit margins.

Due to the heavy dependence on imports, Latin America and Africa are among the most lucrative markets offering good opportunities to expand sales of white oils, said Sushmita Dutta, project lead, energy, at Kline. As the regions economies grow, demand for pharmaceuticals, cosmetics, and toiletries will also increase.

The demand for white oils is expected to grow at a compound annual growth rate of 1.3 percent from 2015 to 2020 for the key markets analyzed. India will witness the highest demand growth of 1.8 percent.

The report is available at www.klinegroup.com/reports/global_white_oils.asp.