Jamie Ryan acknowledges that Azerbaijan would not have been a place where British lubricant marketer Millers Oils thought to build its second blending plant. But that didnt matter because Azerbaijans Academy of Sciences found Millers and convinced the company that the two were a good match.
The result was formation of a joint venture and construction of a blending plant that opened in November. The plant is now operating, offering growth opportunities to Millers and a chance for Azerbaijan to gain technical know-how in manufacturing.
Photo courtesy of Millers Oils
U.K.-based Millers Oils and Azerbaijans Academy of Sciences formed a 50-50 joint venture, Millers Oils Azerbaijan, to build a lubricant blending plant in Baku in November last year.
Millers Oils is a 130-year-old, independent lubricant company, based in Brighouse, Yorkshire, U.K., and offering a broad range of lubes – from engine oils for racing, classic cars, farm and commercial vehicles to a wide variety of industrial applications. According to Ryan, the companys managing director, two of Millers distinctions are the amount of resources it develops to research and development and the efforts that it makes to find solutions to lubrication challenges.
It was these traits, Ryan claimed, that helped connect the company to Azerbaijans central government.
They approached us at the end of 2016, Ryan said. Their president had tasked the National Academy of Sciences to attract high-tech manufacturing so that they could make better use of their natural resources, including oil.
Ryan allowed that academys inquiry seemed a bit odd at first blush. But officials at Millers also saw overlapping interest between their company and the academy.
They actually have quite a bit of base oil, he said, referring to a plant in the capital of Baku operated by SOCAR, the State Oil Company of Azerbaijan. They wanted to know if we could make a high quality lubricant using their raw materials.
We put a lot of money into R&D. We also look at ourselves as solutions providers, and finally, our third value is inclusiveness, which means we believe in training and developing young workers. Thats something that the academy focuses on as well, so were both aligned in what we want to accomplish.
Academy officials visited Yorkshire to tour Millers Oils facilities, Millers representatives returned the favor, and the two sides agreed to form a 50-50 joint venture, Millers Oils Azerbaijan, that would build a blending plant in the Azerbaijan National Academy of Sciences High Tech Park using equipment manufactured by Millers. It opened in November, just a year after the initial contact.
They were great to work with and made it very easy to bring everything together, Ryan said
The plant has capacity to make approximately 13 million liters of lubricants per year. It initially produced automotive engine oils and hydraulic oils but has since expanded the varieties of lubes it makes and will continue doing so.
Azerbaijan is not a large lube market – Ryan estimated annual demand at roughly 60 million liters per year – but Millers still sees opportunity for significant sales.
The country imports a huge amount of lubricants, he said, so we believe it is open to locally manufactured products if we can make them of high enough quality. We anticipate [sales] growing quite quickly.
The joint venture has also begun exporting to neighboring countries, and the companies expect those volumes to grow, too. Millers did have previous experience selling in the region, having done so through distributors. The company just never expected to manufacture there.