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Food For Thought |
It seems not a day goes by where Jobbers
World isn’t hearing something about a pending
or completed merger or acquisition in the
lubricants business. Sometimes these
communications are about lubricant
manufacturers and other times they are about
distributors. They come in the form of
rumors, unconfirmed “facts,” “have you
heards?” and “heads ups” And from
time-to-time we get the official word via
e-mails and press releases announcing that a
deal has been done.
Scuttlebutt about mergers and acquisitions is
always interesting, sometimes entertaining,
occasionally old and stale, and in a
surprisingly number of cases, spot on. So
what do we do with the most recent rumor
grinding through the mill? The one about a
leading highway hospitality business with
service centers and restaurants across the
US, refining assets in the west and an
extensive distribution network and presence
throughout the country. Is it true that this
well known company with a highly visible
brand on many of the highways and byways of
the US might acquire a very large fuel and
lubricant jobber in the Silver State?
Let’s for a moment say it is true. Let’s
imagine such a deal does get done and a
Lucite tombstone attesting to that fact is
sitting in someone’s office nestled near the
Wasatch Front on the west flank of the Rocky
Mountains. If such a deal is consummated
could it signal the start of the all to
played out catch phrase, the infamous
“paradigm shift” in how lubricants are
distributed? Imagine that for a moment. A
lubricant distributor acquired by a company
that has the ability to produce base stocks,
blend lubricants, and distributes them
nationally under their own brand name at
their own stores, with their own trucks.
As I said, scuttlebutt about mergers and
acquisitions is always interesting, sometimes
entertaining, occasionally old and stale, and
in a surprisingly number of cases, spot on.
It will be interesting to see if the
oddsmakers in Reno are right about this one.
By Tom Glenn
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Lyden Acquires Spartan Oil |
Lyden Oil, a leading lubricant distributor in
Ohio, announced that it has acquired Spartan
Oil. Spartan Oil Corporation is Michigan’s
premier distributor of lubricants and
accessories for automotive, fleet,
agricultural and industrial applications.
Spartan houses one of the largest inventories
in the Midwest. It’s inventory includes
700,000 gallons of bulk lubricants, and more
than 2,000 drums. In addition, Spartan has
50,000 square feet of storage space. And if
you think that’s impressive, consider that
Lyden drums up close to 8 million gallons a
of lubricant a year. When you put this
together with Spartan’s roughly 6 million a
year you get a very formidable player in
Mid-west market.
"The completion of this acquisition
represents a significant step for Lyden in
our strategy to accelerate growth by
expanding geographically and managing our
costs," said Paul Lyden, Vice President of
Lyden Oil. Lyden continued: "We are now
squarely focused on the attractive
opportunities this transaction has created
for us to drive growth as well as achieving
significant cost synergies in transportation
logistics, supply line management, and
general and administrative expenses.”
With the Spartan Oil acquisition now
complete, Paul says “Lyden will have
increased capacity to reach new customers and
the ability to provide enhanced products and
services.” Moreover, he continues, “This
acquisition brings together two companies
with 142 years of combined experience in the
lubricants business.” Because of this, says
Paul, the combined talent of our employees
creates the most knowledgeable team of sales
and service professionals in the industry.”
Other winners in this deal appear to be
CITGO, Shell, and ConocoPhillips. Unlike some
of the other recent acquisitions in the
lubricants business where there is clear
indication of brand, and even channel
conflicts, both Lyden and Spartan are aligned
with similar suppliers, notes Jobbers World.
As an example, both Lyden and Spartan are
among CITGO’s top 15 suppliers (Lyden is
reportedly ranked as CITGO’s fourth largest
lubricant distributor). In addition, both
companies handle an impressive volume of
Shell and ConocoPhillips brands.
Another advantage of this acquisition, says
Paul Lyden, is that “both Lyden and Spartan
share similar corporate cultures.” Both
companies believe in excellent service and
that customers value choice in brands.” Both
Lyden and Spartan feel that long-standing
relationships with major suppliers guarantees
such choice and Paul Lyden says “Our strong
supplier links also mean we can provide our
customers with more for their dollar.”
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ExxonMobil Increases PAO Production Capacity |
ExxonMobil Chemical reported the completion
several debottleneck projects at its Beaumont
polyalphaolefins plant in order to increase
the capacity to produce high viscosity
SpectraSyn 40 cSt and SpectraSyn 100 cSt
polyalphaolefins (PAO). Completion of this
project increases its capacity to produce
these grades of PAO by 15%.
SpectraSyn high viscosity PAO products are
typically used as blend components to
increase basestock viscosity and to upgrade
the quality of other base stock types used to
produce lubricants.
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Chemtura Announces Restructuring to Improve Performance, Accelerate Growth, Better Serve Customers |
Chemtura Corporation announced
that it is implementing an industry-based
business model in order to improve
performance and accelerate growth. By
focusing on end-use markets, Chemtura
believes it will be better able to serve
current customer needs, anticipate their
future requirements and target rapidly
growing industry segments.
By redirecting our commercial emphasis to
the end-use priorities of our customers,
Chemtura will better leverage the
considerable technical and applications
expertise that already defines its leadership
positions in flame retardants, urethanes,
lubricant additives, crop protection,
recreational water purification and numerous
additives used in the processing of polymers.
Our commitment to industry specialization
will improve existing customer-supplier
partnership, and enhance our preparedness to
meet rapidly changing industry demands in the
future.
The new organizational and reporting
structure streamlines leadership and decision
making while giving each business better
accessibility to the tools they need to
succeed and more direct accountability for
results. Each business will have
responsibility for its own production
facilities, operational and financial
forecasting, sourcing decisions, process
excellence initiatives, and technical
development efforts.
Organizational streamlining is expected to
result in a reduction of the company's global
workforce by approximately 10 percent (620
positions), resulting in an annualized cost
reduction of approximately $50 million
beginning in 2008. The company expects to
record charges related to the restructuring
in the range of $25-$35 million.
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