How to Start a Lubricant Oil Production Company

A lubricants main job is to increase efficiency or reduce friction between mechanical parts. Many lubricants are produced from by-product of petroleum. The base oil is processed and used for many applications.

There are different petroleum products such as liquefied petroleum gas, dual purpose kerosene and low pour fuel oil. Others are automotive gas oil, diesel and petroleum motor spirit.

There are two major types of lubricants the natural petroleum by-product and synthetic oil. The oil is produced from hydrocarbon based pologlycols such as polyalphaolefins.

Entrepreneurs can leverage on the wide array of petroleum products to launch their own business. Lubrication oil production is capital intensive and highly competitive.

You will find different types of lubricants in the market. Top petroleum distribution companies manufacture their own brands of lubrication oils.

The oil has both industrial, home use in generators, and factories applications. The good news is that lubricant oil production can be done small or large scale.

Learn the Trade

Understanding the manufacturing process is very important before you start your business. Learn the trade through information gathering and seminars.

Sign up for training seasons, or study at an industrial trade institute. Read books on lubricant formulation and buy information products.

Another way to learn the trade is an apprentice training program with a manufacturer. Alternatively hire an expect chemist to manufacturer the product.

Register your Business Venture

Register your business name to reflect the nature of your enterprise. Make it a limited liability company and get insurance.

Find out other permits and patent the product name you create. Other things to do are write a business plan to highlight your future goals, growth potential and company structure. Include a mission statement and operational cost considerations.

 Lease a Property

The size of your operation dictates the amount of space you need. Large companies work from warehouses to produce the lubricant.

Small producers can produce in small factories or shed. You need proper containment, storage and handling of your product.

Due to the harmful chemicals you handle your location should be away from residential areas. The best location for your factory is in a designated industrial area.

You might also consider opening a wholesale outlet for your product. The outlet can sell to other wholesalers at a subsidized rate or to retailers.

Other things to think about when leasing a property are distance to your market and transportation costs.

Choose a Niche

You have to determine the type of lubricant you want to produce. Are you interested in producing synthetic lubricants or those produced from petroleum by-products?

The chemicals you use including production process, impacts on the price of the product. Some are very expensive because of the functionality and product quality.

Many small home base manufacturers focus on the cheaper or more common ones such as mineral oil. Choose a niche, source your product setup the manufacturing process.

Then bottle your product, label and market the brand.

Technical Information

Lubricant oil produced in the market fall into three major categories. The lubricants common in the market are viscous oils, medium oils and light oils. 

The production process involves mixing the base oil in a blending plant and adding additives such as anti-corrosion chemicals and dispersants.

Once the heat and agitation process is conclude it is left to cool. The next process is filling the plastic containers or drums before labeling.

 Learn the entire production process from the sourcing of raw materials, formation and production process. Don’t forget branding and marketing your product.

Focus on good quality control, consistency and well blended product. The quality of your product is your biggest marketing tool. Customers will seek your product if you do a good job.

Funding

You need moderate amounts to start a small manufacturing company. Approach a commercial bank in your area for a loan. You can target save or borrow from friends and family. Approach investors or try a partnership arrangement.

Raw Materials

Raw materials to produce lubricant are readily available. Countries that produce crude oil have lots of by-products for lube producers.  An abundance of Base oil from refineries guarantee lots of supply for your lube business.

Some raw material includes dioctyl sebacate, silicon oils and vegetable oil. Others are fats, hydrogenated oils, castor oils and polyalkylene glycols.

Marketing

The business venture is highly competitive so you need advertisement. Advertise in both print and electronic media to attract customers.

Create a good brand name and produce quality lubricant. Build a website for your business and sell through the site. Engage independent sales representatives to push the product.

Do direct marketing to lubricant wholesalers or retailers and offer discounts. Organize promotions and interesting events to attract patronage.

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