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Evonik is the market and technology leader in high-performance additives to optimize the lubricating and flow properties of engine oils, hydraulic fluids, fuels, biodiesel and industrial fluids. Our additives improve fuel efficiency, i.e. they reduce fuel consumption and CO2 emissions. At the same time, they increase the reliability and service life of engines and hydraulic systems, especially in the automotive, construction and transportation industries. This business is driven by the resource efficiency trend and by the dynamic economic development of emerging markets, principally in the Asia-Pacific region.
Evonik has its own production sites in all regions where there is a significant market for oil additives. These products are manufactured in Darmstadt and Weiterstadt (Germany), Lauterbourg (France), Houston (USA), Morrisburg (Canada) and—since 2008—on Jurong Island(Singapore). We are systematically expanding our position in Asia, which accounts for a third of global demand for lubricants and is the fastest growing market for this industry at present. In May 2015, we inaugurated our significantly expanded Jurong Island oil additives plant after two years of engineering, planning and construction. The capacity of the plant has nearly doubled.
The key customers for our oil additives are in the oil industry and are major suppliers to the automotive industry. Our close cooperation with them has given us a wide knowledge of engines, transmissions, gears, hydraulic systems, and the corresponding oils and lubricants. We can therefore offer high-performance additives tailored to customers' specifications and extensive technical service. Our technology centers and customer competence centers in Germany, the USA, China and Japan play an important role in this. We are also sharpening our focus on our customers' customers: For many years we have had intensive contact and strategic alliances with companies in the automotive sector (OEMs). The VISCOPLEX®, VISCOBASE® and DYNAVIS® brands have been firmly established in the market for many years, giving us a further advantage.
Evonik's high-performance additives result in significant fuel savings in hydraulic systems in bulldozers, excavators, and other construction equipment and can increase their service life. We therefore aim to make construction fleet operators more aware that they can significantly increase the cost-efficiency of their assets by using high-performance oils formulated with custom-tailored additives from Evonik. For example, we are cooperating with SANY Heavy Industries, a world-leading Chinese manufacturer of construction machinery. In addition, a dual-branding concept has been agreed with the Total oil group: our DYNAVIS® logo will appear on the label of Total Lubrifiants' Equivis FE high-performance hydraulic. We will support Total with a full set of marketing tools including fuel savings calculators.
The viscosity of all mineral oils is highly temperature-dependent. They have low viscosity at high temperatures and high viscosity at low temperatures. Without additives, oil could not be pumped through engines at low winter temperatures, preventing them performing their main task: lubricating the engine to reduce friction between moving parts. As viscosity-index improvers, Evonik's high-performance additives maintain the lubricant properties of oils over a wide temperature range. As pour point depressants they make sure oils retain their flow properties even at extremely low temperatures. They are also used to improve the flow properties of biodiesel.
Our polyalkylmethacrylate (PAMA)-based additives benefit from our enormous competence in methacrylate chemistry and our integrated methacrylate technology platform. They greatly increase the operating efficiency of engines, gears and pumps. The lower the viscosity of a lubricant when it is cold, the less energy is lost as a result of internal friction. However, a very low viscosity lubricant also has to remain sufficiently viscous as the operating temperature rises otherwise it cannot lubricate all components and wear and leakage would result at high temperatures. Energy-efficient additives from Evonik optimize efficiency in the widest possible temperature range. In this way, considerable fuel savings can be made.
Experts from Evonik are constantly working on new formulations in close cooperation with customers and scientific institutes. The aim is to gain access to new markets through innovative lubricant technologies, products and applications. The focus is on efficiency-enhancing additives for high-performance yet energy-saving oils and lubricants. Researchers are also working on "smart fluids" with special flow, friction, wear and lubricant profiles or with controlled release mechanisms.
The dynamical development of the market for high-performance oils and lubricants is set to continue. We expect demand for our patented high-performance additives to grow far faster than global gross domestic product. The main drivers are likely to be economic progress in attractive emerging markets and new legislation designed to reduce CO2 emissions in OECD countries. Thanks to our patented high-performance additives, our strong presence in Asia and our network of key customers in the lubricants and automotive industries, we are extremely well-positioned to participate in this growth.
C-IR, May 2015