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Rulexx Lubricants looks to export markets for growth

by Dennis Daniel on Feb 12, 2018

Base oil storage tanks at Rulexx Lubricants & Grease Industries.
Base oil storage tanks at Rulexx Lubricants & Grease Industries.
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Abdallah indicates that price is not necessarily the decisive factor for buyers who value quality and after sales service.

“Large enterprises, particularly, calculate return on investment based on quality and after sales service, which are crucial in this market because customers could face unexpected problems anytime. For example, one of our shipments to Iraq was damaged during transportation due to faults in the packaging containers’ caps, which caused leakage of the lubricants. Although, the packaging supplier was responsible for the damage, we took it on ourselves to replace 800 cartons of lubricants because of our customer service commitments,” he says.

To improve its competencies, Rulexx is developing only products that meet international standards such as API’s SN for gasoline engines and CK-4 for diesel engines.

This requires continued investment in its R&D facility and engagement with suppliers of base oil and additives. Currently, Rulexx buys additives from Afton Chemical and Chevron, incorporating their recommendations to achieve high engine performance.

“Currently, only two companies in the UAE, Rulexx and ENOC, manufacture lubricants confirming to the CK standards. Our aim is to find new additives and ways to improve the quality and performance of our lubricants. As the main purpose of our lubricants is to extend the lifespan of engines, we ensure that we source only the world’s best additives, despite having the option to buy cheaper additives from local suppliers. We do not make compromises in choosing the right additives or their right proportions. Therefore, we have never received any complaints with regard to the performance of our products,” says Abdallah.

But maintaining high standards comes at a price, according to Abdallah, who finds it increasingly difficult to compete amidst increasing prices of raw materials, decline in construction activity and falling demand for superior quality products.  

“There are plenty of cheaper lubricant substitutes available in the market, where we are unable to compete only because we do not have a cheaper product. For example, customers are opting for lubricants produced with recycled base oil. We are unable to compete in that category because we only use virgin base oil, which is obviously more expensive. Other major concerns for us are the rising prices of raw materials and reduced activity in the construction industry. These trends make it difficult to project growth of the commercial vehicles market and demand for lubricants in those industries. But there may be new opportunities. Demand for vehicles and lubricants is expected to grow significantly in Saudi Arabia where women will be allowed to drive this year,” says Abdallah. 

“In order to maintain quality, we cannot reduce our prices, but we have to adopt other tactics such as reduction of margins and negotiation of better prices from our raw material suppliers. We may also be forced to find suppliers who can provide additives with near-matching results as those of our current products,” he says.