FUCHS FEATURE

F U C H S L U B R I C A N T S

feature

oiling the

k n o w l e d g e

machine

With the industry changing rapidly, Ian Armitage looks at how this market-leading lubricant manufacturer is adapting with it.

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Fuchs Lubricants SA FEATURE

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s a relative newcomer to the South African lubricants industry, today in competition with major oil companies, Fuchs Lubricants SA, a member of the worldwide Fuchs Lubricants group, believes that its specialised product and reliable customer service are the reasons for its success and continued growth.

“As you say, we are a subsidiary of FUCHS PETROLUB AG, one of the world’s largest manufacturers of lubricants, with manufacturing and marketing companies worldwide,” explains Willie Stoltz. “Our local success is therefore supported by an extensive range of core lubricants, with tailor-made solutions for various niche markets.”

Fuchs Lubricants SA specialises in “three main areas of lubrication” - automotive, mining and industrial, he adds. “Our products and services are continually evaluated and updated depending on the demands of industry. As far as Fuchs South Africa is concerned we are trading with sales well ahead of last year. In terms of profit margins, the industry has however been hit by escalating costs of raw materials.”

Stoltz says the extra demand is from new business, namely “a couple of projects that we picked up towards the middle of last year”.

“We can say that industrial and mining, particularly platinum mining, has picked up a lot over 2009.” Throughout the world, Fuchs’ specialised mining lubricants are market leaders in their various fields. The Ceplattyn range of open gear greases are approved on mills and crushers throughout the industry and its fire resistant hydraulic fluids, and rope dressings are also widely used.

In response to the excellent growth off the back of such products, Stoltz reports that Fuchs Lubricants SA is “expanding operations” at its headquarters in Isando, on the East Rand.

“We have recently purchased a new property across the road to this building to move the warehousing, sales and distribution operations into,” he says. “We are growing and expanding; it is just going all guns.” www.southafricamag.com

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Fuchs Lubricants SA FEATURE

RISING COSTS The industry has been hard hit by escalating costs of raw materials, which have eroded profit margins extensively. As a means to keep costs under control, the company has implemented a number of innovative “cost-saving methods”, like using its product performance development to help customers cut their cost of operation.

“South Africa is a growing market and we will continue to develop new products,” Stoltz says. “What has worked in our favour in recent times is the strong rand,” he adds. “The rand has been good for us and has helped us tremendously. We import quite a bit from our mother company in terms of finished product and in terms of concentrates. So, the strength of the rand helps us here. In terms of our external suppliers, it has helped also, but there was still an overall increase in many raw materials.”

According to Stoltz, Fuchs Lubricants SA is a “top performer”, which has “not been 4

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affected” by the effects of the recession in the way many subsidiaries have. “In 2009 we didn’t see the recession in SA. We had a tremendous year – because of new business and new projects picked up. So for us it wasn’t a bad year. It was tougher for the parent and all sister companies across the globe from what we have heard.

“Why has SA been performing better? It was strange to us. We – Fuchs Lubricants SA – couldn’t really make out what it was.

We haven’t got answers for it, apart from the projects we picked up.”

That said he believes the firm’s diversity has played some part. “Because we are diverse, we spread risk. There was a definite downturn in mining in 2008/09 where a lot of the milling plants were closed for some time and only started operating again in July/August 2009.

Remember, our products and services are continually evaluated and updated depending on the demands of industry and that is our strength.”

M

Y

PETROCHEM

UNICHEM HEM SERVICES (PTY) LTD

SERVICES LIMITED

GLOBAL CHEMICAL SOURCING Tel: (44-20) 7795-6105 Fax: (44-20) 7361-0070

Tel: +27(0)31 576-0600 Fax: +27(0)31 576-0620 Web: www.unichem.co.za

Web: www.petrochemservices.co.uk

ExxonMobil Chemical Synthetics ExxonMobil full range of Synthetic Basestocks

The Elco Corporation

United Color Manufacturing

FMC Lithium

Jindui Cheng (JDC) China

Full range of Industrial and Grease Additive packages, Sulfurized products & components.

Dyes and markers for lubes, greases, fuels & petroleum products.

FMC Lithium Hydroxide Monohydrate for grease manufacturing (South Africa only).

Molybdenum Marketing Co Ltd: Molybdenum D i s u l fi d e fo r g r e a s e manufacturing.

Other

Manufacturer of: Pour Point Depressants, Tack iness Additives, VII’s, speciality additive packages

WORLD CLASS PRINCIPALS - WORLD CLASS PRODUCTS - WORLD CLASS SERVICE

CONSERVATIVE GROWTH and A SKILLS SHORTAGE In terms of future growth, Fuchs Lubricants SA has put its 2011 target down to single-digit percentages“just to be conservative”.

“It will most probably be a year of consolidation. We are looking at some new projects that we want to kick off in the New Year but they are medium to long-term projects. So 2011, although we have plans for it, whether some of them will come to fruition in the year is a bit doubtful. But, we are expanding.”

Stoltz is concerned about the impact that skills shortages in the sector will have in the near future.

“It is a challenge, particularly in technical positions,” he points out, adding that in-house training is one way it is trying to “deal with” the skills challenge.

“The correct technical skills in the right areas will, in the near future, become extremely scarce,” Stoltz says, adding that, to advance skills development, the company is initiating a programme aimed at training

tertiary-level students over the next few years.

“All that said, we are looking forward,” he continues. “Our key strength is – in the oil industry – that we focus on lubricants.

We don’t do fuel or refining, and we have specialised niches in the lubrications market; the majors don’t have that. We are lean and mean. We have the expertise and we are flexible. Our service to our customers is very good and we virtually have 24/7 delivery.

“We will continue to bring out innovative products in the future and are currently focusing on the automotive market in terms of high spec engine oils. We are also focusing in the metal working industry, OEMs, and we are looking at opencast mining, where we want to bring in new technology.

“We are always looking at new niches and areas where we can bring in specialised products.”

FUCHS has just acquired the global food-grade lubricants business of SHELL to strengthen its own activities in that highly specialised field. END www.southafricamag.com

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7 Diesel Road Isando Tel: +27 (0)11 565 9600 Fax: +27 (0)11 392 5686 Email: contact-za@fuchsoil.co.za

www.fuchsoil.co.za