SK Enmove is joining forces with American oil giant HF Sinclair to build a strategic supply chain aimed at expanding its distribution in the North American lubricants market.
On Wednesday, SK Enmove held a signing ceremony at the SK Seorin Building in Seoul’s Jongno district to formalize their collaboration on the supply and distribution of Group III lubricants in North America. This follows a long-term supply contract signed by the two companies on August 3.
Key figures attending the ceremony included SK Enmove President Kim Won-ki, SK Enmove’s Base Oil Business Unit Head Heo Jeong-wook, HF Sinclair Senior Vice President and President of Lubricants and Specialties Matthew Joyce, and Vice President Leanne Cleland.
Lubricants are vital materials for industrial and automotive applications, reducing friction between parts and dissipating heat. Engine oil is a prime example.
Base oils are the foundation for these lubricants, serving as the crucial raw material in their production. They are categorized based on their source materials and refining processes.
Group III base oils are classified as premium lubricants, produced through advanced refining of crude oil. Compared to Group I and II oils, Group III base oils contain fewer impurities and boast a higher viscosity index, maintaining more consistent viscosity across a wide temperature range. This allows for stable performance in diverse driving conditions.
Recent geopolitical tensions in the Middle East have disrupted refining operations, leading to supply shortages in the Group III base oil market.
SK Enmove exports and sells Group III lubricants to over 40 countries worldwide, including markets in the Americas, Europe, and Asia. The company has established Group III base oil production facilities in Ulsan, South Korea, as well as in Spain and Indonesia.
Under the new agreement, SK Enmove will provide HF Sinclair’s lubricants and specialty division with high-quality Group III base oils on a long-term basis.
HF Sinclair plans to use SK Enmove’s YUBASE lubricants to manufacture its own lubricant products and will have exclusive distribution rights for YUBASE in certain North American regions.
The partnership aims to bolster market competitiveness by combining SK Enmove’s reliable, high-quality base oil production capabilities with HF Sinclair’s extensive North American sales network.
This deal is expected to significantly expand SK Enmove’s North American distribution channels for Group III base oils, further strengthening its global market presence.
President Kim stated that by leveraging SK Enmove’s stable supply capabilities and HF Sinclair’s broad distribution network, it’ll provide a more reliable product supply base for our North American customers.
HF Sinclair, headquartered in Dallas, Texas, operates refining facilities across Kansas, Oklahoma, and New Mexico.
The company is a major player in the North American lubricant industry, producing engine oils and specialty lubricants that it supplies to over 80 countries.
SK Enmove functions as an independent corporate entity under SK On and is approximately 90% owned by SK Innovation. Recently, SK Enmove has emerged as a key revenue generator for SK Innovation.
In the second quarter of this year, SK Enmove reported revenues of 1.98 trillion KRW (about 1.42 billion USD) and an operating profit of 691.9 billion KRW (roughly 497 million USD).
