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AMSOIL develops formula for windmill market
Photo: AMSOIL chemists spent years developing a synthetic oil suitable for windmill gearboxes.
The growing use of windmills to generate electricity is creating opportunity for a Superior manufacturer.
AMSOIL Inc., a maker of synthetic oils, has used its expertise to formulate a product specifically designed to lubricate the expensive commercial gearboxes that transfer wind energy from large windmill blades to electric generators. Mounted high within today’s large windmills, those gearboxes are difficult and expensive to maintain, which convinced utility companies to seek AMSOIL’s assistance in formulating a lubricating oil that provides maximum protection with minimal downtime.
“The oil is expected to last a long time. When we began, the period was three years.
As we progressed forward, that changed to five years. Now it’s seven years,” explained Alan Amatuzio, AMSOIL executive vice president and chief operating officer.
Gaining market acceptance wasn’t a simple proposition. It wasn’t a matter of taking an existing gearbox lubricant and slapping on a new label.
“When we first entered the market, a lot of other manufacturers had taken an existing product and tweaked it,” explained David Meyer, director of AMSOIL’s wind turbine business. “We designed a lubricant specifically for wind turbines.”
The effort to engineer a new product proved to be “a long, arduous process,” Amatuzio said, citing stark differences between the company’s existing motor vehicle oils and the advanced type of lubricant needed in windmills.
“Wind turbines pose some particular challenges, such as controlling foaming and resisting moisture. Lubricants also must be compatible with gearbox filters, seals and hose materials, certain paints, gaskets and lock-tight materials. They must remain viscous when temperatures are cold and maintain lubrication properties when temperatures are hot,” he said.
Two years of laboratory work preceded field testing, Meyer said. Then came the difficult task of convincing windmill owners to try AMSOIL’s new product. Most of the existing gearbox lubricants were manufactured by big-name petroleum firms that are well-known in the market. Among industrial users, AMSOIL was the new kid on the block.
“The customers (windmill owners) and gearbox manufacturers are risk averse. It can cost a half-million dollars to repair just one,” Amatuzio explained. Even though company chemists had developed reams of data that proved the product’s quality, finding that first customer wasn’t easy.
“They always asked ‘who are your other customers,’ and there weren’t any,” Amatuzio said. But finally, AMSOIL made its first sale. “It was a slow process, but it worked out very well. Now, that company is our largest customer.”
Through that relationship, multi-year field data was collected, but gaining product acceptance required AMSOIL to prove its mettle to more than just windmill owners.
“It takes a number of years from start to finish for each brand of gearbox and each brand of turbine,” Meyer said.
After moving beyond that stage, many companies would jump directly into marketing their new product. But given the enormous amounts of money at stake for windmill owners, AMSOIL execs decided to offer an added service.
“We’re more than just an oil provider. We assist customers by providing training - by providing installation procedures. We’ve drafted a four-phase conversion procedure that removes a former product of a lower quality. It ensures there’s a zero percent contamination factor,” Amatuzio said.
“We really don’t have a sales staff. We have technical advisors. We are viewed as an industry go-to person in terms of oil,” Meyer added.
Durability, longevity and maintenance reduction are AMSOIL’s key selling points, he said. Even increasing filter change periods is a big deal because it reduces downtime costs for windmill operators.
To ensure quality and consistency, the lubricant is tested at prescribed intervals in the production process.
“We know with absolute certainty that the oil going into a gearbox is exactly what it’s supposed to be. There is no variation,” Amatuzio said.
The effort is paying off.
“We entered the market as a nobody and emerged as a viable player. We have a strong presence in North America – about 15 percent market share in the megawatt-class turbines,” Amatuzio said.
By the end of 2014, AMSOIL lubricants will be used in over 5,000 turbines in the United States, including several owned by ALLETE Inc. and Minnesota Power.
There’s room to grow. There currently are about 32,000 megawatt-size turbines in this country.
“We’re in a good position because we’re still growing our market share. We have a great product, a competitive price and a service model that beats the competition,” Meyer said. “We still have a large chunk of market share we can go after in the U.S. but we also are actively pursuing Europe and China as well.”
AMSOIL’s international presence is growing, and the company’s headquarters staff of 200 in Superior includes a dedicated department and personnel that pursue business worldwide. Oils currently are being tested in Spain, and the company is working with gearbox manufacturers in China and Germany.
“We’re doing well. We’ve earned the industry’s respect,” Amatuzio said.
Transportation-related lubricants remain the firm’s bread and butter products, and they will continue to be sold by independent distributors.Previous BusinessNorth Exclusives Articles:
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