With these guys exiting the market theres room for us independents to expand our market A. S. Harrison & Co. Chief Executive Officer Justin Roia said following a March 4 by-invitation seminar here. With changing markets there are always opportunities.

To be sure, there will be intense competition, as multinational exit deals mean their markets arent about to be handed up for free. Shell has sold its refinery in Geelong, its lubricants and chemicals, supply, distribution, sales and marketing units among others to Vitol, which will trade under the brand Viva in Australia. Beginning in 2010, ExxonMobil sold its retail fuels business, closed its only Australian lubricant blending plant and started using distributors to sell finished lubes here.

The March 4 seminar was held by A. S. Harrison, a unit of the 92-year old Australian Harrison Group of companies, which includes a toll lubricant and grease blending business and a lubricant additive packaging and distribution business. Representatives from some of Harrisons additive suppliers including Chevron Oronite and Vanderbilt Chemicals attended and made presentations as did some of its customers – themselves additive packagers and blenders.

There are a lot of technical challenges idiosyncratic to the Australian market that will ensure theres always a role for local additive packagers, blenders and distributors, speakers said. In the automotive segment, which accounts for 55 percent of Australian lube demand, engine oils and transmission fluids must accommodate the wide temperature range that vehicles may traverse in one trip, from freezing conditions in the Snowy Mountains of the southeastern corner of the continent to the hot, humid climes of tropical Queensland in the north. Then theres the dusty, sandy desert conditions typical of most of the continent. The road trains that are widely used in Australia – heavy-duty tractor cabs pulling up to three trailers – exert extra demands on lubes.

Australian Bureau of Statistics data show the countrys vehicle parc numbered 17.6 million units last year, up 12.5 percent from five years earlier. About 75 percent of the total registered vehicles are passenger vehicles and about 3 percent are trucks.

The demise of local car manufacturing had pundits at Harrisons seminar suggesting that average passenger vehicle ages in Australia are set to lengthen. Thats not hard to believe, given a sharp decline in the Australian dollar exchange rate from U.S. $1.05 in April 2013 to about U.S. $0.78 last week. A lower exchange rate makes imports more expensive. In addition, rising unemployment is seen as stanching new car sales growth. The jobless rate hit 6.4 percent in January, the highest level since 2002.

For the Australian lubricant industry, an older fleet means less uptake of newer technology blends and additives – the more profitable part of the supply mix, speakers said.

Further eroding the outlook for growth in the Australian lubricant market is the winding back of expansion plans and mothballing of mines in the coal and iron ore industries where commodity prices have collapsed.

Still, Australia holds a significant role in the lubricant and grease industry, seminar participants said. Their estimates suggest the volume of the market is between 350,000 metric tons and 450,000 tons a year. Australias heavy-duty trucking and mining industry vehicles are regarded as among the more extreme on the planet, demanding significant product development for the lubricants they use. And, the countrys passenger vehicle fleet is considered modern, mostly Asian-based models but increasingly sourced from Europe.

All in all, Australia is the 18th biggest market in the world for lubricants and greases. Importantly, its a place of early adopters of technology and of harsh climates and terrains that can be rugged on vehicles and their lubricants.

These characteristics will ensure Australia remains a key market.