The independent blenders acquisition in April of 39-year-old, privately owned Nulon – a local blender and packager of hundreds of products for the automotive aftermarket – is probably the first time an arm of Fuchs has branched out into the retail market, said Wayne Hoiles, managing director of Fuchs Lubricants (Australasia), a unit of Manheim-based Fuchs Petrolub.

That was a significant acquisition and a strategically important acquisition for our business, said Hoiles, adding that in Australia, the industrial market has declined significantly over time. Weve had to adapt to whats available in the marketplace, so us moving into the automotive retail sector with a secondary brand is probably a little new in the Fuchs group.

Hoiles spoke to Lube Report in a telephone interview about the recent acquisition. We will continue now with a two-brand strategy: the Fuchs brand in the B2B and trade market and the Nulon brand, which is a very strong retail brand, he said.

Manufacturing has been in decline for decades in Australia, but the closure of the countrys last automobile factories in recent years has been particularly tough on the big lubricant brands in the local market because they supplied lubricants for factory fill of vehicles and for industrial machinery. Holden, a subsidiary of General Motors, was the last car maker in Australia. The company shut its factory in Adelaide, South Australia, in October 2017. Earlier, Ford and Toyota closed their factories in Australia.

Fuchs is among the top five brands in Australia, alongside BP, Caltex, Valvoline and Shell, which is distributed by Viva Energy.

Fuchs will keep the Nulon brand and local production at the Nulon factory in western Sydney, which makes coolants and has facilities to fill small packs, up to five liters, which are ideal for the retail market. Fuchs branded lubricants and engine oils are designed for the mining, transport and industrial sectors and come in much larger packs.

It dovetails beautifully because they do coolants, which we dont do; we do a lot of 20-liter and 200-liter [packs], whereas they do a lot of small packaging. We can supplement them quite nicely with our business, said Hoiles.

A year ago Fuchs opened a new blending plant about 180 kilometers north of Sydney, which has capacity to grow from a single daily shift to as many as three. Planning for the facility, in Beresfield, New South Wales, allows for future expansion, including addition of bulk storage tanks and additional warehousing. Its one of those plants that can be scaled up over time, said Hoiles.

Meanwhile, Nulon just a year ago faced a community backlash over its own plans to expand and build a new facility. That proposal has now been axed, and Fuchs will manage demand and production using three facilities – the existing Nulon plant, the Beresfield facility and Fuchs other Australian plant in Melbourne, Victoria.

The Fuchs-Nulon hook-up reflects a trend towards consolidation in Australia as existing local brands and players battle in a market thats shrinking and which is characterized by new and increasing competition from overseas imports.

Its really a battle between Australian-made and imports, and its continuing. You have to become more efficient to compete with those international models, said Hoiles.