Navigating South Africa’s lubes market

In this edition we feature Boston Moonsamy, the Managing Director of Azelis South Africa. Boston has over 34 years of experience in the Southern Africa lubricants industry. He talks to us about his journey in the industry, the operations of Azelis in Southern Africa and gives us insight about the lubricants market and its outlook.

1 Would you take us through your journey in the lubricants industry?

I completed my BSc in Chemistry and Biochemistry at the University of Durban Westville, followed by an Honors Degree in Biochemistry in 1990. I began my career at Chevron Lubricants as a Research and Development Chemist (1991-1995), focusing on lubricant formulations. From 1996 to 2000, I managed Supply and Planning, overseeing procurement and production planning.

In 2001, I joined African Petroleum Additives and Chemicals, driving operational and commercial excellence. In 2005, I co-founded UMONGO PETROLEUM ADDITIVES, serving as CEO and focusing on business development and sales. We expanded into the base oil market in 2008 and introduced Chevron Group II base oils in 2014.

OMNIA HOLDINGS acquired a majority stake in UMONGO in 2017, and I continued as CEO. In 2022, Azelis acquired OMNIA’s shares, and I became Managing Director of UMONGO, now Azelis South Africa. Since April 2024, I have been MD of Azelis SSA, covering South Africa, Kenya, Ghana, and Nigeria.

With 34 years in the lubricants industry, my journey spans R&D, operational, and commercial excellence across SSA.

EXPERT INTERVIEW

Boston Moonsamy, the Managing Director of Azelis South Africa

2 You are the Managing Director of Azelis South Africa; what does your work entail?

My core role involves developing and implementing adefined strategy to drive the vision and mission of Azelis across South Africa. This also includes the development of the business across SSA and the expansion of the Lubricants and Metalworking Fluids market segment business structure across Middle East and Africa.

Aligned to above, my responsibilities and accountabilities involve building and leading a cost-efficient customer and principal service organization based on principal and customer value propositions and driving/creating value for Azelis via performance accountability linked to financial parameters.

The roles and responsibilities include a daily leadership in terms of fostering business ethics and our company values, driven by effective and open communication.

The mining sector is one of the largest consumer of petroleum products in Southern Africa. High performance lubricants is key to maintaining productivity through equipment reliability and efficiency.

3 What market segments does Azelis supply to the South African market, and what new market segments do you plan to venture into?

Azelis is a leading innovation service provider of specialty chemicals and food ingredients, active in the Life Sciences and Industrial Chemicals segments. The first encompasses Pharma &Healthcare, Personal Care, Food & Nutrition, Agricultural & Environmental Solutions, Animal Nutrition, Home Care &Industrial Cleaning, and Flavours &Fragrances. The latter encompasses CASE, Performance Chemicals, Advanced Materials & Additives, and Lubricants & Metalworking Fluids.

We are continuously looking to strengthen our offering in the markets we serve. We look forward to introducing products and product lines in line with our strategy with a focus on sustainability and bio-based products.

4 What other markets do you supply to besides South Africa, and how have these products been received?

Azelis is present in Europe, Middle East and Africa, Asia Pacific and the Americas. In Europe, Azelis is headquartered in Belgium and has a strong footprint across Europe. We supply a wide range of products to various industries, including personal care, pharmaceuticals, and industrial chemicals. The European market appreciates Azelis’ innovative solutions and extensive product portfolio.

In the Asia-Pacific region, Azelis serves markets in countries such as China, India, Japan, Australia, New Zealand, Malaysia and Korea. The reception has been positive, with afocus on sustainability and innovative formulations tailored to local needs.

Azelis also operates in North and Latin America, providing innovative formulations in the United States, Canada, Mexico, Colombia, and Brazil. The market response has been favourable, especially in the life sciences and industrial chemicals sectors, where Azelis’ expertise and customercentric approach are highly valued.

Azelis has a significant presence in Sub-Saharan Africa, including countries like Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia, and Zimbabwe. The products have been well-received, particularly in the industrial and food sectors, due to our high quality and the technical support provided by Azelis.

The Middle East and Africa (MEA) region is an important market for Azelis, where we supply specialty chemicals and food ingredients. The products are well-received due to our quality and the comprehensive support we offer to our customers.

Overall, our products and innovative solutions are well-received globally, thanks to our commitment to quality, innovation, and customer support. Our ability to adapt to local market needs and provide tailored solutions has been a key factor in our success.

5 Azelis is aproduct distributor. What kind of support do distributors require from their principals, be it in marketing or product accessibility, to ensure the success of both parties?

Principals can support distributors through co-branded marketing campaigns and providing promotional materials. Training programs to educate distributor teams about product features and benefits are essential, as are sharing market research and consumer insights to help tailor sales strategies.

Technological advancements have significantly impacted the industry. New machines demand innovative lubricant specifications, and oil additive manufacturers have had to adapt quickly. For example, the power density of internal combustion engines has increased, placing more stress on lubricants.

Ensuring a steady supply of innovative products and implementing user-friendly ordering systems and providing technical support helps distributors manage stock levels and address customer queries efficiently.

Regular updates about new products and company news foster strong partnerships, while establishing feedback channels allows distributors to share insights on products and market conditions. Comprehensive support in these areas builds strong, mutually beneficial relationships, boosting sales and market presence for both parties.

6 South Africa is one of the largest lubricant consumers in Africa and has attracted major lubricant producers: How does Azelis position itself to ensure it grows its business?

Azelis has strategically positioned itself to grow its lubricant business in South Africa through several key initiatives:

• Acquisitions: By acquiring Umongo, Azelis has strengthened its presence in the industrial specialty chemicals market and broadened its product offerings.

• Technical Support and Innovation: Azelis offers advanced technical support and innovative solutions through its application laboratory, providing customized solutions to customers.

• Sustainability Commitments: Azelis focuses on sustainability by increasing workforce diversity and partnering with principals who have strong sustainability agendas, offering bio-based oils and solutions that reduce friction and energy losses.

• Lateral Value Chain: Continuous investments in innovation and digitalization strengthens Azelis’lateral value chain, ensuring long-term value creation and better customer service.

Azelis leverages these strategies to enhance its market presence and drive growth in the South African lubricant industry. The company’s local presence, dedicated team, and strong relationships with customers enable it to provide tailored solutions and maintain its leading position. Azelis also focuses on upgrading lubricant quality and diversifying its portfolio to meet the needs of petrochemical customers. With support from global blue-chip principals, Azelis is well-positioned to increase its market share and continue its growth trajectory.

7 The mining industry is a big one in the Southern Africa region. What products does Azelis have for this market segment?

High performing proven lubricant &fuel additive technology for the latest/most modern machinery used in these harsh environments, together with complimentary specialty chemical products that helps keep productivity levels at an optimum level.

The mining sector is one of the largest consumer of petroleum products. High performance lubricants is key to maintaining productivity through equipment reliability and efficiency. Our partners in lubricant technology, continue to invest heavily in developing new products that are required by modern machinery. Via our lubricant marketers, we offer complete solutions for specialized equipment in mining and construction industry. Within our LMWF division, we have very strong technical capability to formulate and support growth.

8 You have been in South Africa’s oil industry for over 30 years. What changes have you witnessed in the industry, especially regarding lubricants?

Despite the lack of legislation governing lubricant quality, there has been asteady increase in the consumption of higher-performing lubricants. The use of GRP I base oils is decreasing, and lesser-known international and regional players are competing for market share, creating opportunities for local manufacturers and marketers.

Technological advancements have significantly impacted the industry. New machines demand innovative lubricant specifications, and oil additive manufacturers have had to adapt quickly. For example, the power density of internal combustion engines has increased, placing more stress on lubricants. The American Petroleum Institute (API) introduced four new HDDEO specifications between the mid-1990s and 2006. Environmental regulations from the EPA in the US and AECC in the EU have driven changes in engine combustion technologies and the development of catalytic converters, necessitating new compatible products from additive manufacturers.

In the industrial sector, higher output turbines and compressors require higher performance lubricants. The marine industry has also seen significant changes due to IMO regulations on GHG emissions, pushing vessels to adapt to lower sulfur fuels and driving the need for new lubricants. As the IMO targets near-zero GHG emissions by 2030, both marine engine builders and additive companies face the challenge of developing new products to meet these stringent requirements

The South African lubricants market is expected to grow from an estimated 419.90 million litres in 2024 to 454.14 million litres by 2026, at acompound annual growth rate (CAGR) of 4%.

9 What does the lubricant market outlook and future growth look like for South Africa?

The outlook for the lubricant market in South Africa is promising, with several key trends and growth drivers:

• Market Growth: The South African lubricants market is expected to grow from an estimated 419.90 million litres in 2024 to 454.14 million litres by 2026, at a compound annual growth rate (CAGR) of 4%.

• Automotive Sector: The automotive industry remains the largest consumer of lubricants, accounting for a significant share of the market. This sector is expected to continue its dominance due to the high volume of engine oils and gear oils used in vehicles.

• Power Generation: The power generation sector is projected to be the fastest-growing end-user industry, driven by the rising demand for energy and the increasing installation of wind turbines.

• Product Types: Engine oils are the most consumed product type due to their high usage and frequent replacement in vehicles. However, greases and hydraulic fluids are also expected to see significant growth, particularly in the construction, mining, and agriculture sectors.

• Sustainability and Innovation: There is a growing emphasis on sustainable and eco-friendly lubricants. Companies are investing in bio-based lubricants and other innovative solutions to meet environmental regulations and consumer demand.

Overall, the South African lubricant market is set for steady growth, supported by advancements in technology, increasing industrial activities, and a strong focus on sustainability.