"SYNTHETIC OILS ARE THE PRODUCT OF THE FUTURE"

Anatoly Skoromets, CEO of Gazpromneft-Lubricants, talked about the main trends of the automotive and industrial lubricants market, business development and the RBC+ research base.

— The oil market is very competitive, but Gazpromneft-Lubricants (GPN-SM) is actively strengthening its role in both Russian and foreign markets. Is today the right time for it?

— In 2020, when the pandemic significantly reduced the volume of transportation by all modes of transportation, oil refineries around the world froze their capacity, resulting in a shortage of base oils. During the quarantine period, against the background of reduced demand, this was not very noticeable, but as activity returned, the need for lubricants increased. Not all companies that reduced production were able to immediately return to previous volumes. We have secured our market share through quick response and extensive distribution network. Domestic deliveries increased by 10% in 2021.

We manage our own technological areas in Russia and abroad, building a system of partners connecting production enterprises in targeted development regions. This eliminates many logistical problems and allows us to quickly meet emerging global demand as well as local specialized needs. Therefore, based on the results of the difficult 2020, we operated the most important categories of high-margin products for us at the pre-pandemic level, and in 2021, sales growth was 9%.

Now the situation is favorable. Our share of the Russian packaged oils market is approaching 24% from 22% three years ago. I mean our flagship products - about 320,000 tons of oil under the G-Energy and Gazpromneft brands worldwide.

— So, during the pandemic, you announced yourself as a strong international player?

— Thanks to the active actions and competences of the team for the development of international markets, we were able to work these two years as efficiently as possible. We have significantly increased the volume and geography of deliveries. Now our products are delivered to 103 countries. This year, the share of exports in total sales reached 36%. For comparison: in 2019, exports amounted to 31%. An interesting fact about the recognition of our oils abroad is that today we export every second "Gazpromneft" and "G-Energy" motor oils in 1-5 liter packaging for car drivers.

This year Canada, Austria, Guinea, Qatar, Saudi Arabia, Oman, Jordan, Kuwait became new destinations for GPN-SM. We managed to increase the sales volume in Europe by 32%. Most of our products are consumed in Italy, Spain, Bulgaria, Greece, Baltic countries. For example, we have a 10% share in the industrial oils segment for a wide range of industrial equipment in Italy.

Now we see good growth prospects in the Middle East and Africa. Deliveries to Morocco have doubled this year - both motor and industrial lines, the share of packaged premium products is almost 60%.

One of the company`s strategic goals is to sell almost 70% of our premium products in foreign markets by 2030. But now our capabilities allow us to actively participate in the formation of key global market trends, such as the introduction of digital technologies to reduce the costs and time for maintenance, and the increase in the share of electric cars and hybrids. reducing carbon footprint, increasing need for extended replacement interval products.

— How difficult is it to compete with well-known global manufacturers both on world markets and in Russia?

— The competition is still high, but now we play on an equal level with the world leaders. In the late 1990s and early 2000s, many cars and equipment were imported into Russia, the recommendations indicated the use of only foreign oils known to foreign equipment manufacturers. The Russian market lived in this situation for quite a long time, but over time, its own high-tech products appeared. When we initially contacted OEM (Original Equipment Manufacturer), we often met with skepticism from them, we had to prove the properties of the products through tests under harsh conditions, and then invite independent laboratories to verify the result. For ten years, GPN-SM has been doing great things and we have been able to overcome consumer barriers with our brands.

Now we produce an average of more than 60 new products per year, which often exceed foreign analogues in a number of parameters. Every year, our specialists conduct about 15,000 laboratory tests, some formulas undergo several hundred tests. Thus, G-Energy Synthetic Active 5W-40 synthetic engine oil passed about 800 tests before it was released on the market - now it is one of the most popular products among Russian and foreign car owners.

In total, our products have already received more than 500 approvals from the world`s leading OEMs.

- It seems that I have a strong enough scientific-research base

Is it not possible to improve the quality of products and maintain competitiveness?

— This is one of the main business areas in which we are actively investing. A lot comes from working on the committees of ATIEL - Association of European Lubricants Formulators and Manufacturers, which organizes industrial dialogue between equipment, oil and additive manufacturers. Therefore, we are the first to learn about changes in demand, and we structure our business in such a way that we already have a ready offer by the time equipment or new requirements are introduced to the market.

For this, it was of strategic importance to reduce our dependence on external research laboratories and test advanced developments on our own equipment. Therefore, in 2021, a GPN-SM research center (SRC) equipped with state-of-the-art tribological equipment was launched, and its certification and calibration was recently completed. In the coming years, the research and development center will focus on the development of a wide range of products and special components for high-tech oils. Now specialists are already conducting the first trials of additives for marine marine oils and heavy-duty commercial vehicles.

To increase the speed of working on recipes, we digitize the process, we have our own software - in-house development based on artificial intelligence technology. The digital product is based on machine learning algorithms that model the physical and chemical properties of the future oil based on a research base accumulated over ten years. It is, in fact, a computer simulation of the component composition of lubricants, taking into account the required properties. Thanks to this, the number of test samples for each research project was reduced by three times, and the time to develop the target recipe was reduced by 40%.

Technologically advanced lubricants are products with very fine parameters, with the help of which the oil becomes an integral part of the structure, not a consumable. We are now starting to patent a digital maintenance service that will remotely monitor operating oil parameters and use them to diagnose equipment condition. We have repeatedly tested this program in the most difficult conditions - rally raids, field conditions, quarries, where the equipment works. Our diagnostics allow you to solve the problem before the mechanics notice the first signs of an impending failure. For businesses, this means uninterrupted and scheduled equipment operation. Now, expert technical support from oil selection to operational monitoring and subsequent replacement is our successful commercial service. There is a good demand for it, this year we have performed about 8 thousand such services for enterprises with a wide range of equipment.

- It turns out that you are changing the consumer`s expectations by bringing such services and products to the market?

— Here we are more responsive to general changes in consumption — timely and personalized offers are important. We have almost completed the digitization of interaction with Russian distributors, now all work is carried out through personal online cabinet - accounts, which reduces daily operations and order processing time by half; foreign partners will join the system at the beginning of next year.

In September, a convenient electronic platform for the wholesale sale of oils was launched, which is available to Russian and foreign participants. The online format ensures transparent pricing and takes into account the logistics of each transaction. During this period, we sold nearly 30,000 tons of products and reduced the time from purchase to delivery to the consumer by half.

We have changed the representation in retail sales - almost all oils for personal vehicles and small equipment, and these are 250 names, are presented in the largest online stores. Sales in this channel increased by 4% in one year.

— What key trends can you identify in the overall lubricants market?

— The whole business is adapted to maximum efficiency, so the equipment now works under very difficult conditions - higher loads, pressure, temperature fluctuations. At the same time, OEMs improve part manufacturing accuracy by reducing clearances between friction surfaces. This means that low-viscosity, energy-saving lubricants are needed for the operation of new equipment, and there is a greater demand for synthetic oils that provide reliable protection during operation under high loads.

I consider "synthetics" to be the product of the future. In 2020, its share in the Russian Federation was 23%, and 28% in the world. According to our forecasts, in ten years the numbers will increase by 10 percentage points and will only increase further. This year, the share of synthetic and semi-synthetic oils in the total sales of GPN-SM was 31%, which is 6 percentage points more than in 2019 before the pandemic.

We are ready for the "synthetic" future of the market and with Omsk lubricant We are implementing the construction project of the hydroisodemum treatment complex (HIDP) at the plant. GIDP will be the main technological resource in 2023 to provide us with our own base for synthetic oils. In parallel, tests of our own sulfonate supplement were conducted during the year. Next year we will integrate it into production. This will allow replacing up to 35% of imported components in the total volume of additives. Thanks to these projects, by 2030 we expect to increase our market share in the Russian Federation to 25% and increase our presence in the global market.

www.autoprofi.az official distributor of Gazpromneft-Lubricants