| SK Lubricants’ profit parade in all quarters of 2020 despite the gloomy oil market and COVID-19 pandemic
As previously reported in SK Innovation’s announcement of last year’s business results, SK Lubricants has made remarkable records despite various obstacles of the pandemic and the overall recession in oil industry. In particular, the company recorded an increase in operating profit rate for four consecutive quarters in the whole year of 2020. It showed a steady growth through each quarter, and in particular the operating profit rate of the last quarter was 4.3 times higher than that of the Q1.
Regarding this positive performance, SK Lubricants explained, “This is the result of our accumulation of leading technology to respond to the high quality and diversification, along with the preference for eco-friendly products of the current global lubricant market. Our steady development is responding to customer values.”
| SK Lubricant’s Group III lube base oil standing firm as the world’s No. 1
The basis of SK Lubricants’ competitiveness lies in its Group III lube base oil, a raw material for high-end lubricants. After successfully developing its Group III lube base oil product called “YUBASE” with its own technology in 1995, the company has been continuously expanding its market share. With a total global market share of 35%, SK Lubricant’s YUBASE has been the unrivaled world’s No. 1 player in Group III lube base oil for years.
Lube base oils are classified from Group I to Group V according to their usage and characteristics. Among them, except for Groups IV and V, which are special oil, Group III products are classified as premium lube base oils with excellent fuel efficiency and durability. Besides, compared to ordinary base oils, Group III has less sulfur so it emits less greenhouse gases. With the rapid growth of the Group III lube base oil market to meet the recent environmental regulations and the obligation to reduce CO2, SK Lubricants’ YUBASE is expected to keep growing in the near future.
▲ (Left) SK Lubricants-Repsol JV ILBOC produces lube base oil Group II and III in Cartagena, Spain / (Right) SK Lubricants signed premium lube base oil deal with PetroChina in 2019
With lube base oil production facilities in Korea, Indonesia and Spain, SK Lubricants is supplying Group III products to major lubricant companies in more than 50 countries. Among which, one of the most recent big deals of the company is the contract to provide premium lube base oils to China`s largest oil and gas producer PetroChina in June 2019. All of these achievements proved that SK Lubricants has become a true global top player, even though it came from a country that relies almost entirely on crude oil imports.
| Aiming to lead the EV lubricants as well
SK Lubricants is also leading the next-generation lubricant market by expanding its portfolio of eco-friendly products and lubricants for electric vehicles (EV). SK Lubricants continues to develop and produce highly functional eco-friendly lubricant products through its own lubricant brand, SK ZIC. The new ZIC ZERO, launched in September of last year, is a representative eco-friendly lubricant product of the company. It received a lot of attention for not only improving fuel efficiency and enhancing engine protection performance but also being the first product ever that has the entire packaging container made of recycled materials
SK Lubricants responded proactively to the recent EV fever. It has been developing lubricants* for EVs over 10 years ago and supplying them to global automakers since 2013. In the future, SK Lubricants plans to rapidly expand the supply of products in the EV market by developing lubricants specialized for EVs. Regarding this, the industry evaluates that “SK Lubricants is the world’s first and practically No. 1 supplier in the EV lubricant industry.” The global EV lubricant market is expected to grow at a high rate of over 24% per year by 2030. Accordingly, market expectations for SK Lubricants, which is playing a leading role in this field, are also increasing.
(*) Lubricant is used in internal combustion engines of general automobiles, but it is used in motors and gearboxes in the case of EVs. Lubricant for EVs quickly cools down the heat of batteries and gears around the motor and cuts off unnecessary electricity flowing inside the vehicle to reduce energy loss and wear.
Meanwhile, SK Lubricants has announced its goal to provide lubricant solutions for vehicles and various eco-friendly areas such as wind power plants. The company plans to target the lubricant market for renewable energy facilities by developing and supplying lubricant products necessary for onshore and offshore wind power generation facilities. This is interpreted as another preemptive response of SK Lubricants for further future growth while the demand for wind power energy increases by an average of 10% per year. Besides, SK Lubricants plans to solidify its position as a company that contributes to eco-friendliness through the development and market expansion of bio-degradable products.
“With the motto of ‘Beyond Lubricants, We accelerate sustainable future,’ we will grow into a global company focused on ESG management by expanding our portfolio for eco-friendly energy/mobility/the future,” said a representative of SK Lubricants.