Afton Chemical improves the substances that make things go and that make them go more smoothly. Afton manufactures additives that improve the effectiveness of fuels and lubricants for machinery, vehicles, and other equipment. The company was formed in 2004 from the additives division of parent company NewMarket (previously named Ethyl Corporation), which switched to a holding company structure and divided its business into two operating subsidiaries: Afton and Ethyl. Afton's own products include fuel additives, which improve the refining process and boost the performance of gasoline and other fuels; and lubricant additives, which improve the performance, functionality, and durability of oils.
With 11 manufacturing plants spread across the globe, Afton serves customers worldwide. Its customers include oil companies and refineries, other specialty chemical companies, OEMs, consumers, and service dealers. Affiliated company Ethyl provides contract manufacturing services.
Among Afton's brand names are HiTEC petroleum additives, octane booster mmt, a line of metalworking chemicals called TecGARD, and performance additives designed for biofuels called BioTEC. Afton added to its metalworking fluid additives business with the 2010 acquisition of Polartech, which maintains manufacturing facilities in China, India, the UK, and the US. The purchase also helped it expand in the industrial additives market, which -- in addition to metalworking additives -- includes hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications.
Afton, which makes up the petroleum additives segment of NewMarket, produces most of the parent company's revenues. In 2010 the parent company achieved record profits, and Afton contributed significantly to those profits with high sales volumes and strong operating margins. Petroleum additives netted $1.8 billion for NewMarket that year. Sales to one customer alone, Royal Dutch Shell (and affiliates), chalked up $217 million in 2010 (12% of the parent company's total revenue). NewMarket cited a return of product demand to pre-recessionary levels as key to the record sales. However, the sales were partly offset by higher costs in raw materials and a less favorable product mix because of a decrease in shipments of some of its high-margin products.
The company pursues opportunities for acquisitions and joint ventures as part of its business growth strategy. In 2008 Afton expanded its product line of fuel additives by buying the North American fuel additives business of GE Water and Process Technologies. The next year it boosted its operations in the high-growth Asia/Pacific region, constructing a manufacturing facility in Singapore, building an R&D center in China, and expanding another in Japan. In 2010 the company expanded its R&D facilities, and by the end of 2011 it opened a new fuel and lubricant additive research lab in Suzhou, China. The facility will enable Afton to provide more technical support for its customers in the region.
In 2012 Afton expanded again in the Asia/Pacific market by announcing the construction of a new chemical additive plant on Jurong Island, Singapore. The company plans to invest more than $100 million in the new facility. The plan is in addition to Afton's manufacturing facilities in the region in Suzhou, China, and another on Jurong Island that are operated by Chemical Specialties Singapore. – less