Nynas, one of the world’s leading naphthenic base oil producers, holds a significant market share in the supply of transformer oils and naphthenic specialty products, which are used in the production of tires, lubricants and greases.
The company, with production facilities in Europe and South America and offices in 30 different countries, has an extensive logistics network and plays a critical role in the transition to a circular economy and sustainable production.
Nynas, preferred in electricity transmission covering 1.2 billion people worldwide and directly impacting people’s lives, is preparing for a future where its global leadership position will strengthen with the increasing demand for electricity.
Nynas demonstrates rapid and stable growth performance in the Turkish market. Since its establishment in Türkiye, the company has become a leader in transformer oils and has achieved a similar success in the tire sector.
In our interview with Güney Devrim İldiri, General Manager of Nynas Türkiye, we gathered information about Nynas’ position and future goals in the Turkish market, as well as the characteristics and advantages of naphthenic oils.
Nynas has a success story spanning over almost a century. How did this long journey begin and what stages did it go through?
The name of Nynas first emerged in petroleum market in 1928. Our esteemed founder, Axel Axelsson Johnson, recognized the impact of personal vehicle ownership earlier than his competitors and invested in a new facility in the early 1930s. This refinery, which was the first of its kind in Swedish history, marked the beginning of Nynas’ national network of petrol stations, which the company operated until 1981. During the years of World War II, Nynas developed methods to produce petroleum products from coal and tar, playing a significant role in Sweden’s energy supply. With a portfolio of nearly 400 product varieties, Nynas continued to grow even after the war.
The first and most crucial stage of the new strategy developed in response to the energy crisis of the mid-1970s was the acquisition of a refinery in Antwerp. Subsequently, in 1992, the refineries in Dundee and Eastham also became part of Nynas. These developments enabled Nynas to become one of the leading suppliers in the European bitumen market with a distinct focus on specialty products. In the later years, Nynas remained focused on niche areas, concentrating on transformer oil and naphthenic base oil production. The company achieved significant market share in the supply of raw materials used in the production of lubricants, tire and greases as well. Indeed, today Nynas’s transformer oils are utilized over 170 countries and in 35% of the transformers worldwide.
As of today, we have production facilities in Europe and South America and our offices are present in 30 different countries worldwide. In addition to our superior transformer oils, by refining heavy molecules we focus on developing high quality products that offer longer service life, reduce greenhouse gas emissions, increase energy efficiency in their production and support circular economy. Thanks to our extensive logistics networks, we are able to ensure seamless and efficient delivery process to our customers’ project sites spread across the world. We collaborate closely with our customers and invest in R&D to overcome challenges, seize new opportunities and create solutions in the transition towards a sustainable society.
Could you share more information about Nynas’ position and activities in the Turkish market?
Nynas started its operations in Türkiye in 1999. Today, as Nynas Türkiye, we supply naphthenic transformer oils, base oils, process oils and specialty oils to industrial customers in the transformer, tire, rubber, lubricant and chemical sectors.
As Nynas Türkiye, we have been the market leader in the transformer oils sector since the beginning of our operations. Thanks to our investments, we have achieved a similar success in the tire industry over the last 10 years. In 2022, we achieved a revenue of over 100 million Euros. Not only we did surpass India, which we previously set ourselves as our target in terms of sales volume, but also secured the second position after Germany. In the short term, we aim to capitalize on Türkiye’s geographical and cultural position in the region to increase our revenue and sales volume.
Türkiye is one of the countries that Nynas places special importance on. Thanks to Türkiye’s economic dynamism, closeness to Europe and regional significance, we believe it will offer even broader advantages and create new business opportunities.
Nynas holds a global market dominance in naphthenic transformer oil, with Nynas NYTRO being used in over 170 countries and in 35% of transformers worldwide.
General Manager of Nynas Türkiye Güney Devrim İldiri: “Not only we did surpass India, which we previously set ourselves as our target in terms of sales volume, but also secured the second position after Germany. In the short term, we aim to capitalize on Türkiye’s geographical and cultural position in the region to increase our revenue and sales volume.”
What distinguishes Nynas, the world’s leading naphthenic oil producer, from other companies in the industry?
While most petroleum companies refine crude oil to produce fossil fuels, Nynas on the other hand focuses on creating long-lasting products that create sustainable value. Instead of fuel from crude oil Nynas produces high quality bitumen and naphthenic specialty oils that in most cases can be 100% recyclable or reusable. Even though our products are made from crude oil-based materials, they contribute to sustainable development in many application areas.
The product’s lifecycle, efficiency, reusability, and recyclability are not only connected to the value of the product’s lifecycle but also linked to resource and energy efficiency. Focusing on circularity is part of Nynas’ vision of evaluating the entire lifecycle of its products. If circular product flows can be achieved, the carbon footprint of the products can be significantly reduced.
In this context, as Nynas, we believe that sustainable products should not only meet but exceed the performance requirements in the applications they are used in. Through this approach, we aim to contribute to our customers’ sustainable development goals. Products can be manufactured using unprocessed, renewable or circular raw materials. Increasing the share of existing products in circular product flows is vital for the efficient utilization of limited resources.
What are the advantages of using naphthenic oil?
The key to the success of naphthenic oils lies in their high solvency properties. Solvency power plays a significant role in all production processes where the oil is used. The high solvency power provides formulators with the flexibility to use different raw materials, add higher levels of additives and achieve shorter processing times.
For instance, in grease production, naphthenic base oils often have significant advantages compared to paraffinic oils. This information is generally accepted in many parts of the world. The key to these advantages lies in the favorable solubility properties offered by naphthenic oils. Another important aspect is that metalworking fluid manufacturers can achieve more stable emulsions when using naphthenic base oils instead of paraffinic base oils in their formulations.
Nynas anticipates its customers’ needs by conducting research and development, innovation and technology improvement activities, enhancing its customers’ competitiveness with the products it brings to the market.
Did the recent challenges faced by Group I base oil producers provide any advantage to naphthenic oil producers?
The growing shortage of the Group I oil is not easily substituted with highly refined paraffinic Group II and III oils due to limitations arising from viscosity values and chemical composition differences that affect the solvency properties. Insufficient solvency significantly affects the key segments of industrial lubricants, metalworking fluids and process oils in a negative manner. Therefore, to overcome the current and expected supply shortages in Group I oils, industrial lubricant formulators need to choose between I) transitioning to Group II or III oils ii) starting to use naphthenics (API Group V) or iii) choose among a custom blend of the first two options.
Additionally, some of Group I producers can remain as actors in a niche market where oils are offered at higher prices. Indeed, there will likely be a demand for Group I aromatics in applications that require the high viscosity and solvency properties they offer from a technical standpoint. In the not-too-distant future, the Group I supply may become insufficient to meet the demand in mainstream markets such as shipping, metalworking fluids and other major industrial applications. In this scenario, I foresee that specialized naphthenic oil producers like Nynas will increase their market share.
For example, our Nynas NYBASE® product is designed in a way that it can be used as a substitute for Group I without the need for major re-formulation in many cases. The greatest advantage of this product group is its wide availability worldwide as a base oil for lubricants and greases, as well as a process oil for the chemical and rubber industries.
The rapid proliferation of electric vehicles is predicted in the near future. How will this transformation in the automotive market affect Nynas’ position in the market?
As of today, Nynas transformer oils are being used in the transmission of electricity reaching 1.2 billion people worldwide. With the increasing population, growing economy and improving living standards, the demand for electricity worldwide is continually rising. Coping with the challenges of a growing population and the increasing demand for electricity grids means offering the best solutions at the lowest costs.
With the world population projected to reach 8.5 billion by 2030, I foresee a 30% growth in global electricity demand over the next 7 years. Consequently, the need for new smart transformers focused on renewable power sources will be more significant than ever. These transformers will require oils that preserve power quality, reduce greenhouse gas emissions, adapt to smart grids and help minimize electricity losses while empowering the future.
I believe that the importance and market share of companies producing environmentally friendly and high-performance transformer oils and specialized oils used as raw materials in manufacturing will increase in response to changing trends and growing demand. Accordingly, I am confident that Nynas will strengthen its market leadership as a result.
Nynas contributes to its customers’ sustainable development goals by producing high quality bitumen and specialized naphthenic oils that are, in many cases, 100% reusable or recyclable.