What exactly is a blender?

[widman]

I know some blenders that are dirt-bags, not really blending correctly, saying "meets or exceeds" API, etc. I also know others that are excellent. I bring in an outstanding CI-4/SL with an oronite to moly formulation from a blender in Tulsa that also blends for some of the companies that make their own in other part of the country. Last time I was there they had the contract for blending the Conoco oils needed in the Tulsa area because it was cheaper for Conoco to contract them than to pay shipping from Houston. If the blender has standards, it works. (Even McDonald's has a half dozen "blenders" of Big Mac sauce scattered around the U.S. to reduce freight).

 

[Mystic]

Some people have already brought some of this stuff up, but I think what is important to this discussion is some economics 101.

If there are four companies that dominate the world market for chemical additives for motor oils, those companies are in competition with each other (it is in their economic interest to sell good additive packages because otherwise the customer will look elsewhere). But if they are also developing additives for their own motor oils, it is not in their economic interest to sell somebody an additive package better than what is in their own motor oils.

In addition, the customers have differing viewpoints. Maybe one company merely wants for its motor oils to just meet requirments (so that it can buy additives at the lowest cost and sell motor oil at the lowest cost). Another company may be eager to sell extremely high quality product. One company may be willing to pay a premium price for a primium additive package-another company merely looks at the lowest cost.

Some companies may feel that if they refine their basestocks carefully, they do not need a lot of chemical additives and a premium additive package. Other companies may be trying for the best possible base oils and the best possible chemical additive packages.

And I am convinced myself that all of these oil company mergers will someday mean less competition and less choice (and higher prices).

 

[Last_Z]

quote:

---

Originally posted by Mystic:


If there are four companies that dominate the world market for chemical additives for motor oils, those companies are in competition with each other (it is in their economic interest to sell good additive packages because otherwise the customer will look elsewhere). But if they are also developing additives for their own motor oils, it is not in their economic interest to sell somebody an additive package better than what is in their own motor oils.

---

Hmmm...Mystic, the custumer makes the market, not the other way around. Just because a company makes the best of X product doesn't mean they don't have a downgraded version to sell for cheap. All the major oil companies don't care about exotic stuff because their customer don't care, don't know or don't demand it.
Example: People who buy Valvoline oil don't know/don't care what's in the oil, most people believe in their ads, so the assume is the best oil out there, which we know isn't true. You see, regular Joes are happy with regular oil, so that's exactly what Valvoline provides to them. Everybody is happy.
On the other hand, see if Valvoline can sell a lot of oil here, especially their Synthetic (which we know is a fake)....we know better, so we demand better, so we pay more.
So, the point of my thread is that those four companies you mentioned don't need worry so much about competing with each other in terms of quality as much as quantity. They all have good and excellent additives, so there is no diffenrence between them.
Rick

[ July 19, 2003, 07:25 PM: Message edited by: Last_Z ]

 

[QuadDriver]

quote:

---

Originally posted by Terry:
and was the only supplier in the US ??????

---

Lubrizol holds the patents and disclosures for nearly every additive technology used in the lubrication biz, and either outright owns or controls many of the other 'suppliers', and this is not restricted to the US but rather worldwide. (last years purchase of chemron knocked your #2 supplier off your list no?) You might be surprised if you did a search to follow the money.

Or better yet, show a 'major' motor oil that does not source additives from lubrizol.

addenum:

of the worldwide additive market: here are the players accounting for 97% of global sales:

The global lube and fuel oil additives market is valued at US $ 4.8 Billion and is dominated by four companies; Lubrizol (35%), Exxon-Shell (31%), Ethyl (19%), and Chevron (12%).

[ July 19, 2003, 12:31 PM: Message edited by: QuadDriver ]

 

[Mike_dup1]

I have been to seminars where Lubrizol and Ethyl reps (the 2 oil additive partners with Amsoil in research and product development) have spoken and they have said that Amsoil is the only company who uses the top of the line additives in their lubes. Many of the so called best oils only want their oils meet the spec's. Think of the spec's are qualifying for a race. They all want to qualify but don't really care to win. Amsoil wants to win. They claim (Lubrizol and Ethyl), Amsoil is always wanting the best and most costly technology available while the other's just want to use what meets the minimum spec's to have a product for market.

The big companies have to show a profit in a product. Often the big companies (pick one), have several sources for additives. They (bean counters) will always go for the lowest price to meet the minimum spec's. They will not go and buy a more expensive additive that far exceeds the spec's when they make an additive in house that meets the spec's.

Amsoil is driven to be the best, the big ones are driven to show a return on the investment. Amsoil thinks that by using the best available they will capture the market the big oil companies don't care about, people who want the best available, not the minimum acceptable product.

Where the oil companies are today, Amsoil was there 5 yrs ago and have moved on to higher ground.

FYI
One another aspect, I know a local oil distributor (QS)+ BP fuel/oil distributor. He just told me that the prices on motor oil is going up quite a bit lately. All these oil mergers have an effect on the supply of product and it costing them more and more every shipment. Whats more, they are pushing product on him that the market does not want around here. They are consolidating products, dropping ones that are unprofitable where as in the past they would supply the niche market and absorb it in other products). He says 99.9& of his customers buy only on price, these companies realize that so they are cutting corners to be competitive. He is always getting calls from customers saying J. Doe Inc can sell me 100 barrels of 10w30 joejuice for 1 cent cheaper per gallon, meet it or lose the account. The end user has no idea whats happening.

5 yrs ago there were something like 15-20 oil companies (marketing engine oils), today there are 5 or so.

[ July 19, 2003, 12:43 PM: Message edited by: Mike ]

 

[BOBISTHEOILGUY]

Mike, I'm sorry but that last response sounded more like a sales pitch for amsoil so I'm calling your hand on this one.

I am not willing to believe that amsoil is the only one that uses the top of the line additives. Sorry, but too much of a leap of faith on your statement IMO. That's not to say they(additive companies) didn't say that but I fail to see that statement to be true unless they are only comparing strictly otc major conventional oils only to themselves. To state and include that about le, rp, schaeffers, hydrotex, nope, I don't believe it applies to those.


As for amsoil being ahead of everyone else, Again, I for one don't agree with that at all. They, a long while back was indeed ahead of many but now the market has changed in the process of refining and such and that they don't appear to be changing anything in the 2 and 3000 series where as though the xl7500 has changed(down grading to a group III base oil if memory serves). I may be incorrect and expect one of the amsoil reps to correct me if I'm wrong,but when has the last reformulation been taken by amsoil other than the downgrade of the xl7500? To say they are way ahead, look at the oil analysis section, show where amsoil is leaps and bounds beyond other specialized or synthetic oils. Thanks. b.

You must have added the FYI edit while I was writing this, so my comments are only about the above post above the fyi section.


[ July 19, 2003, 12:52 PM: Message edited by: BOBISTHEOILGUY ]