The Participants ExxonMobil � Total � Castrol � Citgo � Vickers
Shaara Blome Global Marketing Manager ExxonMobil
Jeffrey Green Marine Strategic Advisor Global Marketing ExxonMobil
Patrick Havil Marketing and Analysis Department TOTAL Lubriciants
Paul Lowther Global Marketing and Communications Castrol Marine
Nigel Rushworth Sales & Commercial Director Vickers Oils
Alan Suan Marine Products & Services Marketing Advisor ExxonMobil
Roger E. Tucker Product Manager - Industrial Lubricants CITGO Petroleum Corp.
The economic crisis: how does a protracted decline in vessel operations affect your business? ExxonMobil ExxonMobil has been serving the lubrication needs of the marine industry, in good economic times and in bad, since the 1880s. The fact of the matter is, in good times and bad, shipping companies are always looking for new, innovative ways to improve their fleets' operational efficiency and lower costs. We constantly strive to develop technology solutions that will help our customers remain competitive. Many shipping companies have had to make significant changes recently, not the least
of which is reducing costs quickly and safely. We understand. And we have the expertise and technology to help them succeed. TOTAL Clearly, the economic crisis has affected our business, along with that of all our customers and competitors alike. The second half of 2008 was not a good period in terms of volumes of sales and at this time we had forecasted a similar bad situation for beginning 2009. But the early part of 2009 has been better than expected, and the first-quarter results show that seaborne trade is starting to pick up again, even if demand for lubes is
not yet back to the levels we were experiencing before the onset of the economic crisis. In some parts of the world, volumes are still low. In Asia, for example, demand for marine lubricants has dropped by 25 per cent, while in more dynamic regions, we witnessed a period of stabilization. Demand for lubricants has also dropped as a result of the large numbers of ships going into lay-up, remaining idle and spending longer in port as a result of the worldwide economic downturn. The future remains uncertain. Increasingly, there are reasons to be more optimistic as the economy starts to improve and more ships come onto the mar-
ket, which of course is good for the lubes business. But new ships coming onto the market increases competition and, even though the economy is improving, there can be no denying that there are still too many ships for the number of cargoes available. Freight rates are not at the same buoyant levels achieved before the start of the economic crisis, with the result that shipping companies are not in a position to increase their expenditure on lubricants. This, of course, will work to keep down the price of lubes in a competitive market. Nevertheless, customers are demanding better products as they continue to search for improved per-
September 2009
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