February 1, 2007

Jobbers World Online News Briefs is a service to Subscribers to the Jobbers World Newsletter.

  • David and Goliath – Feedback
  • Chemtura Completes Acquisition of Kaufman Holdings Corporation
  • ConocoPhillips Lubricants Upgrades Kendall Lubricants Analysis System (KLASŪ) Oil Analysis Program

  • David and Goliath – Feedback

    JW received a significant number of comments about the “David and Goliath” story we ran yesterday (see link at bottom of story). Interestingly, the opinions expressed were very consistent.

    First off, of the nearly 10,000 subscribers we e-mail Jobbers World News Briefs to, there was a time yesterday when I would have sworn I received 12,000 e-mails about how to spell Pittsburgh. Yep, we made a “typo” and left the "h" off of "Pittsburgh." Our apologies go out to everyone in "The Big Little City," But we learned something important. That is, people from Pittsburgh love their "h.” In addition, we learned that many educated people (or at least people who can spell) actually read every word we write in Jobbers World.

    Another common thread in the feedback we received is that there doesn’t seem to be much sympathy from our readership for the David in the story. Our readers don’t see it as big oil beating up on a little guy. Instead they see it as a major doing what it should to protect its business and the business of its marketers.

    As an example, one marketer said, “It may be “David and Goliath” but in my view, majors have gotten slack about protecting their brand. Our supplier sure has. There are signs out on the curb, on buildings, etc., that lead customers to believe that their brand is inside. What’s inside, though, is often private label—usually supplied by a multi-line distributor that has other brand options. When they let their brand value fall to zero, that’ll be it; game over. Branded distributors actually benefit when their suppliers protect the brand and have it mean something. This makes the distributor’s contract and value higher. Shell is just trying to make some noise and I think they should. I wish our supplier (a leading major) would take a stronger position about protecting its brand.”

    Here is what another marketer had to say:

    “No legitimate jobber in the business wants to see mis-branding like this – it hurts everyone in the long run. I think it is great an oil company is policing its branded bulk business.”

    Another example, and maybe one majors and marketers should really think about came from a consumer that just happened to read yesterday’s David and Goliath story. This seemingly unbiased consumer, said:

    “I read you article in Jobber’s World in regards to the Shell lawsuit. I agree with Shell, they have the consumer’s interest at heart. There are a lot of small lube shops that take advantage of people that trust them and the signs they see around. Having a Pennzoil Sign at your premises implies to the consumer they are receiving Pennzoil products. If you are not selling me Pennzoil when I drive into a fast lube with a Pennzoil sign then the Pennzoil sign should not be there. Have a sign made out to reads, “We sell House Brand Lubricants” or "We Sell Wal-Mart Lubricants" and see how your customer responds. Everyday in America consumers are being taken advantage off. Thank you Shell for doing the right thing and setting an example.”

    Okay - enough about our readers throwing stones at the David in this story. Who knows, there are always two sides to every story and we will likely never know them both. Nor will we ever know what truly lies in the hearts and minds of people when they enter into ugly battles like this. But this is not the only battle taking place in this space. In fact, its one of many in the ongoing war in the installer class of trade. It’s a war that pits brand against price. As one reader said after seeing the story, “Perhaps a follow-up article could be titled "Sign of the Times" as more installers say no to higher priced lubricants with ever lessening support and programs to justify the cost.”

    As we said, Jobbers World plans to track this David and Goliath story to its conclusion. We suspect there is a good deal that can be learned and taught from how it plays out. Your comments and thoughts are welcomed. And if you see any spelling errors in this story, please let us know!

    Chemtura Completes Acquisition of Kaufman Holdings Corporation

    Chemtura Builds on Core Competencies Expects High Growth in Lubricants for Hydro Fluorocarbon (HFC) Refrigeration Compressors

    Chemtura Corporation (NYSE: CEM) announced yesterday that it has completed the acquisition of the stock of Kaufman Holdings Corporation in an all-cash transaction. Kaufman has approximately 300 employees and 2006 revenues in excess of $200 million.

    The acquisition includes Kaufman’s two operating companies, Hatco Corporation, a worldwide leading producer of polyol esters used for technically demanding synthetic lubricant applications, including aviation turbine oils and lubricants for HFC refrigeration compressors; and Anderol Inc., a worldwide leader in high-performance, synthetic lubricants used in demanding aviation and industrial applications, such as compressors, bearings, gears and food-grade machinery.

    “The acquisition of these companies aligns with our strategy to add high-performing businesses to our portfolio,” said Chemtura Chairman and CEO Robert L. Wood. “Both Hatco and Anderol are world leaders in their respective markets. “Our existing Petroleum Additives / Lubricants business is core to our growth, and Hatco and Anderol fit in well with this business. There are related product offerings in key customer areas, as well as the opportunity to strengthen alliances with major suppliers. There may be distribution synergies as well, benefiting our global customers,” he said. “Chemtura will add industry expertise, Six Sigma-based products and processes, and new information technology systems that will benefit Kaufman customers.”

    “The acquisition brings together complementary technology and manufacturing experience and will result in our ability to offer customers a broader portfolio of products, technology and service,” said Janet Mann, general manager and vice president of Chemtura Performance Specialties, which includes the Petroleum Additives / Lubricants business. Hatco and Anderol will become part of the Performance Specialties group of businesses.

    “We see many opportunities for global expansion in two high-growth markets: HFC refrigeration lubricants and high-performance synthetic lubricants,” Mann said. “Growth in HFC refrigeration lubricants is driven by the Montreal Protocol, which provides for the accelerating adoption of environmentally friendly refrigerants. Growth also will be driven by the demand for improved fuel and energy efficiency, as well as increased equipment durability, all of which are enhanced by the use of synthetic lubricants.”

    ConocoPhillips Lubricants Upgrades Kendall Lubricants Analysis System (KLASŪ) Oil Analysis Program

    ConocoPhillips Company, the fourth largest U.S. lubricants supplier, today announced several changes to Kendall Motor Oil’s Kendall Lubricants Analysis System (KLASŪ) oil analysis program. Effective January 1, 2007, ConocoPhillips aligned its software service provider with its oil analysis testing laboratory, consolidated contact phone numbers into one comprehensive support line and enhanced training opportunities, according to Steven Tarbox, director of product management, ConocoPhillips Lubricants.

    “In our continued efforts to increase the ease and efficiency of doing business with ConocoPhillips Lubricants, we are pleased to announce these upgrades to our oil analysis program,” said Tarbox. “It is important that our programs and systems improve in tandem so that our customers have a program with maximum function and value. The modifications to our KLAS oil analysis program provide our customers with a more efficient system and increased online support.”

    In 2007, the KLAS Web-based software and management tools for fleet analyses is now provided and supported by POLARIS Laboratories. The new system is very similar to the previous service, but it provides easier web access for remote and multiple users as well as additional management reporting options for distributors and their customers.

    This change in service providers has also led to changes in the KLAS Web site, www.KLAS.net. The site now incorporates all of the new program information along with new reporting capabilities.

    Finally, ConocoPhillips says, training will continue to be an important element of the KLAS program as ConocoPhillips Lubricants adds field training sessions to the existing Web-based training. They say the goal of both online and field training is to help Marketers and customers better understand the oil analysis program and encourage them to take full advantage of the program.

    “The KLAS program will continue to be an exceptional value as distributors and their customers convert their fleets to the ULSD and CJ-4 diesel engine oils,” said Tarbox. “The program is designed to make all users lubrication analysis experts.”


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