Staying ahead of the curve


MUCH has been said about the computer nerds who have won it for Microsoft, Apple and Facebook. Less well known, but no less brilliant, are the chemical geeks who have won it for Shell Lubricants, making them No. 1 in the global lubricants market by volume for seven years in a row to 2012.

World sales figures from 2013 are not yet out.

And while Bill Gates, Steve Jobs and Mark Zuckerberg personify nerdy genius at Microsoft, Apple and Facebook respectively, there has been no such defining personality to represent the geeky brilliance found at Shell Lubricants.

What they have at Shell Lubricants is a crack team of chemical engineers.

To be sure, it’s not just the chemical engineers, but a whole array of impressive talent at their disposal – from marketing to branding to the product applications specialists.

Shell Lubricants, which is really a general term to refer to Shell Group’s lubricants businesses, retained their No. 1 position for the 7th time and commanded 12% of the global lubricants market in 2012, according to industry reports such as Kline & Company’s.

An obsession with being on the cutting edge of oil and lubricant technology explains much of its success. In 2012, Shell Group, whose official name is Royal Dutch Shell plc, invested nearly US$1.3bil (RM4.3bil) on technology to help anticipate future energy challenges and develop industry-leading products.

Last year, the oil and gas giant made a net profit of US$16.5bil (RM52.8bil) on the back of US$451bil (RM1.4 trillion) in revenue. It has 92,000 employees in over 70 countries.

In the second quarter of this year, its profit jumped 33% to US$6.1bil (RM19.5bil), beating analyst expectations.

“For Shell Lubricants, innovation is about helping our customers’ business to work more efficiently,” said Dr Selda Gunsel, vice president, global commercial technology, recently in Shanghai during a Shell global media event to promote the company’s latest heavy duty diesel engine motor oils.

At the same event, Aimin Huang, the general manager of the newly launched Shell Shanghai Technology Lab, says “on top of product research and development, an important part of our work is providing hands-on technical services to customers, working closely with them to help deliver more fuel efficient products.”

Such statements can sometimes be dismissed as standard corporate drivel, but Shell, as this reporter observed during the Shanghai global media event, is a company that walks the talk.

And it shows up in ways both big and small.

World class

From the get-go, the company’s way of doing things shone through as we were reminded quite firmly to use the seat belts as we - the media and some Shell customers, boarded the bus to get to the hotel in downtown Shanghai.

The next day, the same refrain as we boarded the bus – “Don’t forget the seat belts.”

At first I thought that China must have really stringent road safety laws, but then I began to notice that many of their motorcyclists were zooming around Shanghai - the biggest city in the world on a population within city boundary basis, did not wear helmets, and it dawned on me that this could not have been the legacy of Mao Thought.

So I asked a Shell staff: What’s the fixation with the seat belts?

The answer that came back was ...um... deathly simple: “We don’t expect people to die for the company.”

She went on to explain that Shell is a company that takes the safety of its employees (and customers) very seriously. True enough, when it rained, the company ensured that someone was at the bus door, holding an umbrella to shield us from the slight drizzle and to warn us to watch our steps as we alighted from the bus.

It’s all part their adherence to the company’s strict HSSE (Health Safety Security Environment) policy.

But it was in the media briefings and the tour to the Shell Shanghai Technology Lab, where the chemical, automotive and mechanical engineers spoke of their work, that the heartbeat of the company was revealed. These media briefings, two full days of it, were really engineering lectures in disguise. It was mind-numbing for some, including this writer. I had to be lubricated with lots of tea and coffee to get my engine started.

At the Shanghai lab, one quickly understands why Shell Lubricants is a serial world champion seven times over.

This is a place where the engineers speak of engines, oils and molecules the way you would your pet dogs and cats, or children.

If there is a geek heaven, this place is it. At this juncture, it would be wise to reflect on Bill Gates’ advice: “Be nice to nerds. Chances are you’ll end up working for one.”

During the lab tour, we were surprised to learn later from Richard Tucker, the Shell Lubricants global technology manager, that some of the people manning the lifts were PhD holders.

They were chemical engineers helping out with lift duty. “We have the most qualified lift attendants,” said a chuckling Tucker, himself a PhD graduate in chemical engineering from Cambridge University.

Later on at a truck stop on the outskirts of Shanghai, it was impressive to see Tucker’s fellow Cambridge alumni, Seow Lee Ming, standing in the rain in her raincoat and seemingly oblivious that the edges of her pants were soaking wet, pushing the case for Shell Rimula in the midst of journalists and rough-and-tumble Chinese truckers, switching between English and Mandarin effortlessly.

Some of these examples of Shell at work may seem mundane, but they are symptomatic of how a world class company operates and an embodiment of what it preaches – that it reveres technological prowess, values talent and pays close, extraordinary in fact, attention to customers.

And that brings us to the latest variants of the Shell Rimula series of heavy duty diesel engine motor oils.

The Rimula

Production applications specialist Frank Machatschek is proud of what Shell Lubricants have done with the latest variants of the Shell Rimula series, especially the flagship, fully synthetic R6 LME.

Machatschek: ‘The Rimula R6 LME piston cleanliness test showed amazing result.’

But what impresses Machatschek most is how the premium motor oil passed Daimler’s piston cleanliness test with flying colours.

“We have exceeded the most demanding Daimler specification for piston cleanliness by 56%. This is an amazing result,” he says in reference to the engine test called MB OM 501 LA.

The R6 LME was developed in collaboration with Daimler and is a 5W-30 viscosity grade oil. This lower viscosity translates to better fuel economy for the user.

“Shell Rimula oils are designed specifically to provide outstanding protection against acids, deposits and wear,” says Tucker, the global technology manager. “The biggest driver of OEMs (original equipment manufacturers) now is to improve the fuel efficiency of their vehicles,” he adds. “It’s about trying to reduce the total cost of ownership for the transport operator.”

According to Shell Lubricants, in trials carried out with a fleet of trucks operating for Wm Morrison Supermarkets in the United Kingdom, the customer confirmed that Shell Rimula R6 LME realised up to 2% fuel savings over 100,000-km oil-drain interval compared with a typical 10W-40 oil.

Fuel efficiency and cost savings derived from good vehicle maintenance are the mantras used by Shell Lubricants when selling its lubricants and motor oils. It is a strategy that has worked well.

“Shell Rimula is consistently in the top three positions in key markets (around the world),” says Seow, the Malaysian global brand manager.

The reputation of their heavy duty motor oils has won Shell Lubricansts support from major automotive players, in the key market of China and elsewhere around the world.

Apart from Daimler and many other leading OEMs, Fast Group - China’s top commercial vehicle gearbox maker, is an industry partner while in Malaysia, Mitsubishi, well known for its pick-up trucks, has been recommending Shell motor oils to their customers.

Future challenges

In thinking about how Shell would respond to major challenges in the future, it is interesting to bring in the example of Eastman Kodak, the once pre-eminent film company in the world.

It is not the best example to compare an oil company with a film company, but both companies do share striking similarities.

For one, the two companies use the colour yellow for their brands, secondly both their products are derived from chemical engineering and thirdly, both brands are exceptionally strong.

Or rather, in the case of Kodak, it was exceptionally strong.

But where Eastman Kodak went belly-up in a film-less world dominated by digital photography, will the Shell clam up when the oil stops flowing?

It seems highly unlikely from the vantage point of the year 2014 that Shell Group would do a Kodak, but the film company must have felt pretty invincible too in the days before digital photography.

Eastman Kodak emerged from bankruptcy sometime late last year.

In any case, Shell has been making the necessary adaptation and transformation.

“We are transforming ourselves more into an integrated energy company.

“We are putting much more emphasis on gas these days. We are thought of more as an oil company, but actually we produce more gas than oil these days,” notes Tucker.

Shell is the global LNG (liquefied natural gas) leader with the world’s largest fleet of LNG carriers and the company has also been making significant headway in gas-to-liquids technology.

No one knows what the future brings, but at least one can be fairly certain of how this old, legendary company would react in times of crisis – and that is it would fight tooth and nail to remain relevant and profitable, molecule by molecule if need be.

Which is why Mark Twain (or whoever the hell it is that came up with the quote), should really have said: “Go to Heaven for the climate, Shell for the company.”

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Business News

CPO futures may undergo technical correction next week
Blackstone-backed Patria eyes expansion in Latam, Asia
METALS: Tin, aluminium, copper prices down
Oil price falls on China's COVID-19 cases, high crude build
IBM, Intel slump weighs on Wall St as coronavirus concerns rise
GLOBAL MARKETS-Weak data, earnings drag stocks lower
Getting through tough times together
Keeping the economy moving with stimulus
How economic stimulus matters for countries
Short Position - Siletrra, AirAsia, ESG

Stories You'll Enjoy