Lube market set to take off
Despite a slowdown in overall mining investment, the mining lubricant market in Australia is anticipated to grow steadily over the next few years, market analyst Frost & Sullivan predicts.
As the mining industry shifts focus to enhanced production, Frost & Sullivan’s analysis finds that the mining lubricant market earned revenues of $446.3m in 2013 and estimates this to reach $650.5m in 2019.
Market analyst Frost & Sullivan says the mining lubricants market will continue to grow rapidly, despite slowdowns in other areas.
Also, while biodegradable products are gaining customer attention, mineral oil-based products are expected to continue dominating the market in the short to medium term.
“The Australian mining sector leads the world in the deployment of advanced mining technologies,” said Frost & Sullivan’s chemicals, materials and food senior consultant Sarah Wang. “As various mining equipment incorporate high level of automation and productivity metrics, the demand for quality lubricants will remain high.”
Price remains the first point of discussion, and pricing pressures affect revenues in a market where product differentiation is minimal. Generic types of lubricants still comprise 40% of the lubricants consumed in the mining sector, curbing market development. Moreover, the dominance of the market by the five largest suppliers makes market entry extremely challenging.
Manufacturers that offer products which can significantly improve the productivity of equipment will earn entry into the Australian mining sector. The consultative sales approach, combined with demonstrated substantial return on investment will further provide suppliers a key competitive edge during slow growth periods.
“Offering customised solutions and demonstration of efficiency has proven effective in winning new contracts,” noted Wang. “Being a highly specialised product group that is directly linked to operational performance and cost, technical support is highly valued by customers.”
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