Not all mineral oils are equal and lower LSM markets shouldn’t have to settle

not-all-mineral-oils-are-equal-and-lower-lsm-markets-shouldnt-have-to-settle
Ridwan Gany

JOHANNESBURGAs technology has evolved many of us drive high-performance masterpieces today that would have been unimaginable just a generation ago. However, in South Africa there are still many vehicles, not least in the older taxi and lower LSM sectors, that use previous-generation engines which makes the lubricant market for these vehicles highly competitive, says Petrocam Lubricants CFO Ridwan Gany.

As with anything, the advancements in synthetic oils are a sight to behold, with massive advancements in performance under extreme temperatures and high-performance environments. “Most modern, higher performance engines were designed for this type of synthetic lubrication, whereas in older engines that cannot cope with synthetics, mineral oils are still the mainstay lubrication. Traditionally, in this sector as the shelf price decreased so too did the product quality, which was a catch-22 for consumers. However, users don’t have to settle for inferior products,” says Gany.

Because of the highly competitive nature of this lower-cost market, there are many cheap brands that use inferior blends or recycled base oils, says Gany. “The key is to present a quality product, made with high-grade virgin base oil that can compete in a price bracket where most users of a mineral oil feel comfortable,” he says, adding that price sensitive consumers have made the market ripe for inferior products.

While the incumbent big brands do offer quality products with proven blends and good base oils, he says they are often excluded from the consideration set of lower LSM mechanics or vehicle owners on price alone. “This is why the sweet spot in the South African market is to bring comparable quality to the big global brands, but at a price point closer to where the consumers are comfortable.”

On the other hand, he says, a producer such as Petrocam Lubricants – which, although newer in the South African market has an established brand in West Africa – needs to be cautious not to present a product at the bottom of the pricing scale because of a preconceived perception that price is directly proportional to quality.

When asked which false perceptions in the lower-end market are the most pervasive, Gany didn’t hesitate: “Perhaps the biggest misconception is that all mineral oils are the same and equal in quality. This is simply not true because virgin base oil and additives must be the best quality for it to translate into a good product. Some blends are even using recycled oil and because of the sheer number of low-spec or even zero-spec products that have flooded the sector. Every reputable brand is fighting these inferior products.”

Petrocam Lubricants sells a full product offering – this includes fully synthetic and semi-synthetic oils, which sell at a higher cost to a higher-LSM market with different vehicles, and mineral oils. However, says Gany, the reason the older vehicle sector has had to contend with so many more inferior products for so long is because the barrier to entry is far lower.

Gany says that from his experience and from what his team has been told on the ground, mechanics and workshops are tired of inferior quality and are more inclined to use a superior product in a range they can afford because it is intricately tied to their own reputation. “This is exactly the pain point that needs to be addressed in this market,” he says.

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