Jobbers World News
April 27, 2009

  • Valvoline up for sale
  • NewMarket Corporation Reports Record First Quarter Results
  • Contact Us With Your News

  • Valvoline up for sale

    The New York Post reported Friday, that Ashland is seeking bidders for its Valvoline division.

    According to the NY Post story (see link below), "the first round of bids came in within the past several days and among those that have made it through to the second round are Prestone and several private-equity firms bidding individually."

    This is big news for the lubricants business for a number of reasons. The first of which is that Valvoline is a major player in passenger car engine oils (PCEO). According to Petroleum Trends Intl., a leading market research and consulting firm in the lubricants space, Valvoline's PCEO sales in the US reached close to 80 million gallons in 2008. This makes Valvoline one of the top four suppliers of PCEO in the US market. So whomever acquires Valvoline, they are acquiring a well recognized and respected brand in the business.

    But in addition to its volume and brand equity, the sale of Valvoline has the potential to significantly shake up the distribution channels. Depending on who acquires Valvoline, some distributors and their suppliers will likely find they are quickly dealing with channel and brand conflicts they may have never planned on when the year started.

    And what if one of the Private Equity firms looking at Valvoline is already connected with the lubricants business and has an equity stake in a large lubricant distributor? If they do, this could be a game changer that brings us back to the old days when a major brand is once again running trucks and delivering lubricants. It could also be a game changer because it gives a large distributor the muscle of a powerful, nationally recognized brand.

    Or what if Prestone (a unit of Honeywell Consumer Products Group), the most widely recognized and distributed brand of antifreeze in North America, acquires Valvoline? Would this too be a game changer?

    Maybe so when one considers that the Honeywell Consumer Products Group also manufacturers and markets FRAM Oil, Air, Transmission and Fuel Filters; Autolite Spark Plugs and Ignition Wire Sets; and Holts Car care products. If this product portfolio is combined with Valvoline's motor oil, fuel and oil additives, Eagle One appearance products, and Valvoline's other car care chemicals, it quickly becomes a very powerful offering to both the DIFM and DIY channels. An offering few others can match.

    But then again, now that Ashland is seeking bidders, maybe someone new will enter the scene... Someone from up North or from across the pond.

    Whatever the case, however this plays out, you can be sure it will shake up the market and make 2009 even more exciting than it has been.

    NewMarket Corporation Reports Record First Quarter Results

    The Board of Directors of NewMarket Corporation declared a quarterly dividend in the amount of 25 cents per share on the common stock of the Corporation. The dividend is payable July 1, 2009 to NewMarket shareholders of record at the close of business on June 15, 2009. This represents an increase of 5 cents per share over the previously paid dividend.

    The first quarter results reflect strong improvement in petroleum additives operating profit which increased to a record $50.1 million, 33 percent higher than operating profit in the first quarter 2008 of $37.7 million. While lubricant additive profits were flat in the quarter to quarter comparison, fuel additive profits increased due to improvements in the company's product portfolio, increased market coverage, and stability in market demand in an environment of rapidly declining raw material costs. In addition, NewMarket says lower cost in R&D, sales and administrative, and plant spending, contributed to the profit improvement.

    NewMarket's President and Chief Executive Officer, Thomas E. Gottwald says, "The impact of the worldwide economic slowdown coupled with destocking of inventories by many of our customers resulted in petroleum additives sales in the first quarter of 2009 of $334.8 million, or a reduction of 12 percent compared to sales in the first quarter 2008 of $380.6 million. The lower sales include a 26 percent reduction in quantities shipped which were especially weak in the first two months of the current quarter. With our petroleum additives products being nondiscretionary to a large degree and vital to the performance of modern machinery, we believe shipping volumes will continue to increase as this destocking process is completed. The drop in shipments was almost entirely in the lubricant additives portion of our business. We are very pleased to see our investments in the fuel additive area showing benefits. These investments have strengthened our product offering, expanded our customer reach, and provided our customers with more cost effective solutions."

    Gottwald adds, "Our company is performing well in this very challenging economic environment, and we are pleased with the speed at which our team has been able to adjust to changing market conditions. Our financial position is strong, enhancing our capability to weather near term storms, invest for future growth and improve shareholder value."

    About NewMarket: NewMarket Corporation through its subsidiaries, Afton Chemical Corporation and Ethyl Corporation, develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated chemical blends to market-general additive components, the NewMarket family of companies provides the world with the technology to make fuels burn cleaner, engines run smoother and machines last longer.

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