ICIS London 2018 Apu Gosalia

Data, Digitalization, Decarbonization
– Do Disruptions Damage Durability?

| Apu Gosalia
| VP Sustainability & Intelligence
| 22nd ICIS World Base Oils & Lubricants Conference
| Park Plaza Westminster Bridge | London | 22nd February 2018
.
– Do Disruptions Damage Durability
01 ▪Data
02 ▪Digitalization
03 ▪Decarbonization
l2
Data
Development Global Lubricants Demand*
36.1
35.9
35.7 35.6 35.7
35.4 35.5
35.1 35.1
34.4
31.9
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
l3
*Million Tons / Without Marine Oils
Data
Development Regional Lubricants Breakdown
Demand (Million Tons)* Middle

East
Asia-Pacific & MEA Americas Europe Africa 5% (4%) Asia
6% (6%)
Pacific
35.9 36.1 Western 43% (35%)
Europe
23% 19% 11% (13%)
27% Eastern 2017

32% Europe (2007)
8% (10%)
Latin
54% America
45%
9% (10%)
North
America
2007 2017 18% (22%)
l4
*Without Marine Oils
Data
Development Regional Lubricants Demand
2017 : 2016
*Variance (% )
North America 0.0
Latin America -2.0
Western Europe 1.5
Eastern Europe 0.5
Middle East -0.5
Africa -3.0
Asia-Pacific 3.0
World 1.0
l5
*Rounded Up/Down
Data
Ranking Top 20 Lubricant Countries*
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
,0
l6 2017 2007
*Thousand Tons
Data
Development European Lubricants Breakdown
Demand (Million Tons)*

Western Europe Eastern Europe Russia Germany
18% (19%) 14% (13%)
8.4
UK 10%
6.8 (10%)
43% Ukraine
5% (5%)
45% 2017
Poland
(2007)
4% (3%)
France
8% (9%)
57% Other
55% Eastern
Europe Other
18% (16%) Western
Europe
2007 2017 23% (25%)
l7
*Without Marine Oils
Data
UEIL Industry Statistics Committee
l8
01 ▪Data
l9
Digitalization
Digit(al)ization
Digitization Digitalization
• Automation of existing • Use of digitized technologies

manual or paper-based and digitized data for
processes …
 generating revenue
• … enabled by the change  improving, replacing and/or
of information … transforming processes
 creating an environment to
• … from an analogous to a make digital business
digital format practices more effective
l 10
Digitalization
Digit(al)ization
Digitization Digitalization
• Automation of existing • Use of digitized technologies

manual or paper-based and digitized data for
processes …
 generating revenue
• … enabled by the change  improving, replacing and/or
of information … transforming processes
 creating an environment to
• … from an analogous to a make digital business
digital format practices more effective
l 11 ➢ There is no Digitalization without Digitization!

Digitalization
Lubricant Value Chain
• Data collection throughout the whole value-chain will be widened

compared to todays standards
• Direct and automated usage of information generated at a later step of

the process will affect all steps before
• An extended exchange in between customer and lubricants company

will allow for new services and therewith add extra value to business
l 12
Digitalization
Lubricant Development Tools
• Transform product development from being

empirically-driven to using data and simulation
approaches
• In doing so, application related information such as

field data or test field results serve as a statistical
backbone
• A more focused development will be granted by

implementing the later application into product
development by introducing simulation approaches
into R&D
l 13
Digitalization
Lubricant Value Creation
➢ Turn exclusively empirical

evidence driven product
development into a
digitally supported
➢ Monitor fluids’ life
product development ➢ Use data to predict
and incorporate this
➢ Apply simulation future sales
information into e.g.
approaches and design of ➢ Introduce E- product
Experiments (DoE) Commerce Tools development
Product After-Sales
Production Sales Distribution
Development Services
➢ Use data to enhance the ➢ Introduce Track &

production of lubricants Trace of Deliveries
➢ Use simulation to
optimize the location of
production
l 14
Digitalization
Drivers
Big & Smart Data

Data Usage & Analytics
Predictive Maintenance Sensor Technology
Track & Trace Delivery Development
Drivers
Digital Business Design of Experiments

Model Innovation Cyber Physical System
Simulation/Modelling
Condition Monitoring
l 15
Digitalization
Disruptors
Third Party
Third Party Third Party
Third Party Third Party
Third Party
l 16
Digitalization
Today
l 17
Digitalization
Tomorrow
l 18
Digitalization
Threat
l 19
01 ▪Data
l 20
Decarbonization
Corporate Carbon Footprint*
(in kilogramm CO2e per ton produced)
l 21
*FUCHS Production Locations 2014
Decarbonization
CO2-Distribution Combustion Engine
l 22
Source: BMW / Status 2015
Decarbonization
CO2-Distribution E-Mobility
l 23
Source: BMW / Status 2015
Decarbonization
Lubricant Specification
l 24
Decarbonization
Sustainability Initiative
▪ In 2016, the sustainability initiative NaSch* was

established as a working group in Germany
▪ Members: AVIA BANTLEON, FUCHS, ROWE,

KLÜBER LUBRICATION, ZELLER+GMELIN,
German Lube/Oil Associations VSI & UNITI
▪ Objective: Establish sustainability standards,

KPIs, benchmarks for the lubricants industry and
emphasize its value for society (image campaign)
▪ UEIL cooperation with NaSch* carrying sustainability

forward to the level of the European lubricants industry
l 25
*Nachhaltigkeit Schmierstoffindustrie

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Data, Digitalization, Decarbonization

– Do Disruptions Damage Durability?

Demand (Million Tons)* Middle

27% Eastern 2017

North America 0.0

Latin America -2.0

Western Europe 1.5

Eastern Europe 0.5

Middle East -0.5

Demand (Million Tons)*

• Automation of existing • Use of digitized technologies

• Automation of existing • Use of digitized technologies

l 11 ➢ There is no Digitalization without Digitization!

• Data collection throughout the whole value-chain will be widened

• Direct and automated usage of information generated at a later step of

• An extended exchange in between customer and lubricants company

• Transform product development from being

• In doing so, application related information such as

• A more focused development will be granted by

➢ Turn exclusively empirical

➢ Use data to enhance the ➢ Introduce Track &

Big & Smart Data

Digital Business Design of Experiments

Third Party Third Party

Third Party Third Party

▪ In 2016, the sustainability initiative NaSch* was

▪ Members: AVIA BANTLEON, FUCHS, ROWE,

▪ Objective: Establish sustainability standards,

▪ UEIL cooperation with NaSch* carrying sustainability

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