Gazprom Neft updates motor oils business development strategy 2025

18 March 2013

Gazpromneft Lubricants, the Gazprom Neft subsidiary that specializes in the production and sale of motor oils, lubricants, and technical fluids, has updated its long-term development strategy by defining targets to be reached before 2025.

Gazpromneft Lubricants plans to grow its overall motor oil production to 633,000 tons by 2025, which is 40 percent higher than the 2012 level. That figure includes 330,000 tons of high-grade packaged oils to be sold both in Russian and international markets. The company expects to take approximately 18 percent of the Russian lubricants market as a result of the growth.

In the mid- to long-term, Gazpromneft Lubricants will complete a number of its major investment projects, among which is the building of a dedicated production capacity at the Omsk Lubricants Plant for groups II and III base oils, which are currently not produced in Russia. The company is also planning to expand the Moscow Lubricants Plant’s capacity and modernize its lubricants production facilities. Construction of the second line of the motor oils mixing, dispensing, and packaging facility at the Omsk Lubricants Plant will be completed in 2013. The first line was commissioned in May 2012. The company will invest a total of 20.8 billion rubles in lubricants infrastructure between 2013 and 2025.

Gazpromneft Lubricants intends to grow its competitive advantages by expanding its range of products and developing products that fit the latest specifications with the assistance of leading international auto manufacturers, and to develop specialized technical services for its clients. The company will continue to build its distribution network and to actively promote its products in premium sales channels, primarily at service stations.

At present, Gazprom Neft’s lubricants production and sales business is actively growing both in Russia and abroad. In 2012, Gazpromneft Lubricants exceeded key target indicators set in the company’s development strategy for that period. The company’s product range was expanded by 50 percent to over 1300 commodity items issued under 400 product names. New product lines have been launched, including Texaco brand marine oils, synthetic oils for commercial vehicles, and G-Energy Antifreeze engine coolant. Gazpromneft Lubricants’ share on the Russian motor oil market rose in 2012 from 10 to 14 percent. The sales volume of G-Energy premium brand motor oils in Russia reached 10,000 tons per year. Over the past year, the company increased its packaging capacity by 70 percent, up to 172,000 tons. It invested 5.5 billion rubles in developing production in <nobr>2008-2012.</nobr>

“Expanding Gazprom Neft’s motor oil business in combination with long-term industry forecasts will allow us to maintain current growth rates until 2025 and strengthen the company’s market positions. One of Gazpromneft Lubricants’ competitive advantages is its strong engineering base and its aspiration to implement the latest world-class technologies at Russian production sites in order to provide quality products to Russian consumers,” noted head of Gazprom Neft Commercial Directorate Levan Kadagidze.

REFERENCE

Gazpromneft Lubricants LLC is the subsidiary of Gazprom Neft that specializes in the production and sale of motor oils, lubricants, and technical fluids. It was created in November 2007. Gazpromneft Lubricants has five productions sites in Russia, Italy, and Serbia. Its total production volume amounts to 450,000 tons of high-quality motor oils, lubricants, and technical fluids per year.

The company supplies its products to the assembly lines of automobile manufacturers including Mercedes Benz Trucks Vostok, the Avtodor group of companies (for General Motors automobiles), KAMAZ, and GAZ. Consumers of Gazprom Neft’s industrial products include the companies Severstal, Sibur, Gazprom, Evraz, and MMK.

In 2012, the company substantially expanded its range of products, introducing 35 new premium products. In cooperation with leading automobile manufacturers and companies that operate motor vehicles, Gazpromneft Lubricants is improving motor oil formulas and developing new products. At present, the company’s portfolio includes motor oils for gasoline and diesel engines in cars and trucks, transmission fluid, hydraulic fluid, machine oils, service products, and coolants under the G-Energy and Gazpromneft brand names. In 2012, the company also began producing marine oils under the Texaco brand name. The company’s range of products includes over 400 motor oil and lubricant product names for all market sectors (including over 1000 commodity items).

The company has a 14 percent share of the lubricants market in Russia, and it also operates on the South European, Serbian, Ukrainian, Belarusian, Kazakhstan, and Central Asian markets. The company supplies products to a total of 38 countries.