Elbow grease: Industry profit margins slip as input prices increase

The Lubricants and Other Petroleum Products Manufacturing industry produces a range of vital lubricant, grease, fluid, oil and bituminous goods. Industry products are broadly used throughout society to run vehicles, machinery and equipment, to construct roads, and in general manufacturing. The industry is expected to generate revenue of $1.6 billion in 2017-18, down 1.2% on the previous year due to base stock prices falling. Industry operators have struggled due to export declines over the past five years as global production increased, while competing imports also decreased. Industry revenue is expected to decline at an annualised 4.2% over the five years through 2017-18, due to lower prices and volumes.Exports are forecast to generate 12.9% of industry revenue in 2017-18...read more.

Industry Statistics & Market Size
Revenue
$2bn
Annual Growth 13-18
-4.2%
Forecast Growth 18-23
Profit
Employment
1,998
Businesses
149

Industry Threats & Opportunities

  • Bituminous materials output has increased due to higher road construction activity
  • Industry input prices have increased due to higher base stock costs and a falling Australian dollar
  • Profit is forecast to decline due to lower revenue and higher imported base stock prices
  • Industry Report - Starting a New Business Chapter

    Although entry barriers to the industry are generally high, these do vary across the industry's various product segments. Economies of scale, refining equipment requirements and branding generally limit potential new entrants to the industry. Barriers to entry are highest for lubricant production, which requires substantial investment in a manufacturing site and tanks, as well as blending knowledge and expertise. Substantial barriers to entry also exist for automotive and industrial oil producers. These barriers include strong branding for existing market participants, particularly within the consumer market. For example, Valvoline has a 140-year history in Australia, while Fuchs' oils are popular for high performance vehicles...purchase to read more.

    Additional Insights for the Lubricants and Other Petroleum Product Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Lubricants and Other Petroleum Product Manufacturing Industry are

  • Ability to expand and curtail operations rapidly in line with market demand
  • Upstream vertical integration (ownership links)
  • Ability to accommodate environmental requirements
  • IBISWorld analysts also discuss how external factors such as World price of crude oil and Demand from transport, postal and warehousing in the Lubricants and Other Petroleum Product Manufacturing industry impact industry performance..

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    What's in this report

    What is the Lubricants and Other Petroleum Product Manufacturing Industry?

    The industry produces a range of petroleum and lubricant products manufactured using base stocks consisting of oil, grease and organic compounds. These products include automotive oils, other transport oils, industrial oils, greases and other lubricants. Industry firms also manufacture bituminous materials and coal products such as petroleum coke and coal coke.

    Industry Products
  • Bituminous materials and coke products
  • Diesel engine oils
  • Petrol engine oils
  • Other lubricants and oils
  • Hydraulic oils
  • Transmission oils
  • Gear oils
  • Greases
  • Industry Activities
  • Bituminous material (excluding hot-mix bituminous paving)
  • Automotive fluids production
  • Benzene
  • Coal tar production
  • Fuel briquette (except charcoal)
  • Lubricating oil and grease
  • Mineral turpentine
  • Motor oil
  • Petroleum coke and petroleum coke product
  • Recovery of oil and grease from petroleum waste
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • World price of crude oil
  • Demand from transport, postal and warehousing
  • Number of motor vehicles
  • Demand from heavy machinery repair and maintenance
  • Demand from mining
  • Demand from road and bridge construction

  • Current Performance
  • Declining revenue
  • Oil and base stock prices
  • Employment and establishments
  • International trade
  • Vehicle trends
  • Chart: Revenue Growth

  • Industry Outlook
  • Oil prices and profit trends
  • Future industry declines
  • Industry rationalisation
  • Future industry drivers
  • International trade
  • Table: Lubricants and Other Petroleum Product Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Lubricants and Other Petroleum Product Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Road and Bridge Construction
  • Petroleum Product Wholesaling
  • Fuel Retailing
  • Hardware and Building Supplies Retailing

  • Key Selling Industries
  • Black Coal Mining
  • Petroleum Refining and Petroleum Fuel Manufacturing

  • Products & Services
  • Diesel engine oils
  • Petrol engine oils
  • Gear oils
  • Hydraulic oils
  • Transmission oils
  • Bituminous materials and coke products
  • Other lubricants and oils
  • Greases
  • Chart: Lubricants and Other Petroleum Product Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Transport companies
  • Manufacturers and other sectors
  • Exports
  • Industrial and mining companies
  • Automotive companies
  • Primary producers
  • Road and bridge construction companies
  • Chart: Major Market Segmentation for the Lubricants and Other Petroleum Product Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Lubricants and Other Petroleum Product Manufacturing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Lubricants and Other Petroleum Product Manufacturing Industry

  • Industry Globalization
    BP Australia Investments Pty Ltd, Viva Energy Holding Pty Ltd, Caltex Australia Limited, Valvoline (Australia) Pty Ltd, Fuchs Lubricants (Australasia) Pty Ltd,
  • Table: BP Australia Investments Pty Ltd - financial performance
  • Table: Viva Energy Holding Pty Ltd - financial performance
  • Table: Caltex Australia Limited - financial performance
  • Table: Valvoline (Australia) Pty Ltd - financial performance
  • Table: Fuchs Lubricants (Australasia) Pty Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Lubricants and Other Petroleum Product Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Lubricants and Other Petroleum Product Manufacturing Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Exports (2009-2023)
  • Imports (2009-2023)
  • Wages (2009-2023)
  • Lubricating Oils & Greases (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Asphalt
  • A surfacing product manufactured from a mixture of graded aggregates, sand, filler and bitumen.
  • Base Stock
  • A base oil that has undergone a series of processes to remove unwanted material and that meets required performance levels.
  • Coke
  • The solid residue obtained when coal is heated to a high temperature in the absence or near absence of air.
  • Fractional Distillation
  • The process of separating a mixture into fractions. The parts are separated according to boiling point. Upon heating, the fractions vaporise at a desired temperature and are individually collected.
  • Hot-Mix Bituminous Paving
  • A heated mix of aggregate and binder to manufacture a bitumen product for roads and highways.
  • What Our Customers Say

    Why buy this report?

    The Lubricants and Other Petroleum Product Manufacturing market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Lubricants and Other Petroleum Product Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Lubricants and Other Petroleum Product Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Lubricants and Other Petroleum Product Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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