Two major issues have stood out for me this month: China has announced tightening of its national emission controls and Africa’s population is growing twice as fast as the rest of the world.
In China the smog we commented on in the OATS China Bulletin earlier this month has triggered the government to move with unusual speed to tighten the emission controls.
Some of us still remember expressions of “going down the smoke” about visiting London. Prior to the Clean Air Acts of the 1950s and '60s, London suffered from smog on a regular basis. Even in the 1970’s I can recall being unable to drive in London because you could not see a few yards, or metres, ahead of the front of the car. And there were relatively fewer cars then.
Mexico City in the early 80’s had a continuous haze of falling truck pollution. As recently as the 1990’s, Athens was frequently trapped in a haze of vehicles emissions, which were only really cleared up when the Olympics came.
According to experts, China is having to address both coal pollution and vehicle pollution simultaneously. Global legislation really is changing in this regard when the world’s fastest growing economy starts to address its vehicle pollution. This will have an effect across vehicle production, fuel and lubricants businesses.
The fuel producers (Sinopec, CNOOC) will have play an imporant role in helping to create a cleaner environments and Chinese manufacturers who have dominated the truck business will be seeking more joint ventures and mergers along the lines of the Volvo/ Dongfeng (DFGV) deal. This can only accelerate the wider spread implementation of the latest European and US technologies to allow greater control of air quality. Good for producers of high quality lubricants.
Meanwhile, in Africa, the population is growing twice as fast as the rest of the world. This, combined with a new post-colonial “rush for Africa” to grab the continent's valuable mineral resources, means Africa is accelerating economically in a way not previously seen. South African lubricants demand has already risen on the back of the mining businesses. Now, a 14% boost in car sales at the start of this year alone, is further boosting the local lubricants market. Of course, in North Africa the aftermath of the Arab spring has left a different economic hiatus which will take time to resolve itself.
Elswhere, the US economy continues to pick up after the pre-fiscal cliff pause. PMI has jumped to 53.1. Stock markets are moving again as the risk associated with the Eurozone break-up or meltdown eases. All of this suggests that we might just be about to see some sustained growth globally. Good for lubricant demand, outside the Eurozone, where cars sales continue to plunge!
At OATS we are continuing to build new systems that allow companies all over the world to address the challenges of lubricant recommendations, wherever they are, Europe, Americas or Asia, with the documentation to support all types of lubes business activities. Our new website is coming soon, so watch this space.
In the meantime, as always, if you would like to comment or offer content for the OATS Lubes Resource Centre and Bulletin, we would be delighted to hear from you.
Sebastian Crawshaw
Chairman, OATS