Issue: Jul 2012


Semi-annual sales of the German motor oil manufacturer increased across the group by 19 percent



by Jon Knox

LIQUI MOLY continues on its path of growth. This is shown by the semi-annual figures of the German motor oil and additive specialists. Of the full year target of €400 million, €203 million have already been 'run in' from January to June. That amounts to a plus of €33 million in comparison to the same period of the previous year and an increase of 19 percent. Earnings also kept pace with increasing sales, despite increasing procurement costs.

While the price of crude oil dropped in the second quarter, this had no tangible effect on the costs of base oils and other raw materials. Base oils are already refined and provide the basis for the manufacture of lubricants such as motor oils. 'Taking this under consideration, the stable earnings situation represents a special company achievement', says LIQUI MOLY managing director Ernst Prost. The medium-sized company is not able to entirely pass on the higher procurement costs, as it must orient itself to the price policy of the competition. 'Corporations like Shell, BP-Castrol and Exxon-Mobil achieve their earnings from oil production or at the gas pump', Ernst Prost explains. The figures in the motor oil business do not play the same role as at LIQUI MOLY. Correspondingly, calculations are made differently there.

The rising raw material prices are a factor in the decision to advertize considerably less in Germany. A second factor is the strong market position LIQUI MOLY enjoys in Germany. Additional market shares can only be won with a great deal of effort. The third factor is the increasing importance of foreign business. In the meantime, LIQUI MOLY makes around half of its sales outside of its German domestic market. While domestic sales in the first half of the year increased by ten percent in comparison to the same period in the previous year, export sales increased by 28 percent.

'We still have enormous chances for development in export', Ernst Prost is sure. And these are being used. One example is Myanmar, formerly Burma. As the first lubricant company, LIQUI MOLY has gained a foothold in the former granary of Southeast Asia and exhibited its goods at a trade fair in Rangoon. 'That we found our way into this formerly isolated market before the larger competitors underlines the advantages of a fast, decisive, medium-sized company, and makes us justifiably proud', says the managing director. The goal is to increase sales of the group to €1.5 billion in eight years. The long-term vision is: world market leader.

The promise of quality of 'Made in Germany' is very important here. LIQUI MOLY produces exclusively in Germany to ensure the highest possible quality. ''Made in Germany' has tradition, an excellent reputation, and enjoys unlimited confidence', says Ernst Prost. This quality refers not only to the products themselves, but also to research and development. An additive especially for diesel particle filters is currently in development. A motor oil has been developed for utility vehicles that meets the most recent manufacturer and environmental requirements of Europe, North America and Asia. A new automatic transmission oil for special uses has also been included in the program, as has an asphalt separating agent for roadbuilding, various cooling lubricants and corrosion protection oils. 'The market is in constant movement. We must keep up with technical developments and fulfil customer wishes, ath the very highest level', according to Ernst Prost.

Sales growth has resulted in very high utilization in both factories. 'This is both a blessing and a curse', says Ernst Prost. Investments in people and machinery are indispensable. For this reason the number of employees has increased to 569 in past months. Technical updates are also taking place: a new dispensing system for additives and additional tanks and machines help master the increase in sales. The new tank farm will also be commissioned soon. Ernst Prost: 'The first tests went smoothly.' Soon 18 million liters of raw materials will be stored there. These are important steps toward the goal.

About LIQUI MOLY
LIQUI MOLY GmbH from Ulm in South Germany offers a wide range of qualitative high-quality products such as motor oils, additives, vehicle care products and service products. The range includes some 4000 items. LIQUI MOLY develops and tests their products in their own laboratories, manufactures exclusively in Germany and markets all of their products themselves. LIQUI MOLY was founded some 50 years ago and is now one of the leading companies in the industry. The products are sold in Germany and in 100 other countries.

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