TBY talks to Michel N. Jeanbart, General Manager of Sharlu, on four decades of operations, longer-term growth plans, and the effect of falling oil prices.

Michel N. Jeanbart
Michel N. Jeanbart is the General Manager of Sharlu.

Over its 40 years of operation Sharlu has become a market leader in the oil lubricants market. What are the reasons for your continued success?

Established in 1975 by a group of investors from the UAE, Sharlu was the first privately-owned blending company in the region, delivering high-quality products. In our four decades of existence, we have had many partnerships with virtually all oil multinationals to produce lubricants. Our commitment to quality and services has driven us to be the first company to offer customers the convenience of direct onsite delivery, and the first to offer bulk product to workshops in the UAE and the wider GCC region. To cope with our growth, we relocated our facilities in 2007 from the center of Sharjah to a plot outside the city, which will enable us to maintain our growth rate.

How would you describe the role of government in supporting industries in Sharjah and their current efforts to open up the Emirate to greater foreign investment?

We greatly appreciate our relationship with the government, which has been excellent since our first day of operation in Sharjah. Throughout those years, we have received all the necessary support, as the government is aware of our needs and concerns, and is highly committed to addressing these. The open-door policy that exists in Sharjah and the UAE is unique, and runs through every government department. The support we have received has, for example, enabled us to move from city to the Plant where we are now and to establish a tank farm to store base oil, the capacity of which have grown from 14,000 tons to 50,000 tons within five years. Of course, the fact that we follow their rules and regulations is a boon. And as we are a business entity like any other, I believe that the government extends a helping hand to other companies as well.

Can you talk about Sharlu's medium to long-term growth plans?

We have been blending for the most prominent Japanese car and engine makers for over 30 years as their most important supplier by volume, and are looking to expand this partnership. We have also been appointed by one of the major base oil suppliers as one of their exclusive four worldwide distributors of base oil for small quantities in the region. All in all, we are always looking to expand, and we are growing our market share for our two main brands Sharlu and Falcon by addressing the local industry and in our exports to Africa, Asia, and the MENA region and beyond. Additionally, we are focusing on diversifying our business.

Can you comment on how the price of crude oil has impacted your business?

The price of crude oil does not have a direct impact on Sharlu since the base oil that we use is a byproduct of the refineries, and there is a lag between crude oil price and base oil price. Our problem, however, is that our clients refrain from importing or buying, especially the major distributors, because they note that price of crude is too low. This is the only way it affects our business. It is definitely a period we must watch closely and be tight in our supply of raw material. We do not speculate on the product, as we sell, buy, and produce to order.

What are your company's expectations for the coming year?

The government is acutely aware of the potential, economic risks, and is keen to mitigate unsavory developments in the sector. I do not foresee an imminent major impact. I believe the UAE will continue to grow more substantially and sustainably. This goes for Sharlu as well. We are looking to expand, and will be breaking into new markets. We have been operating at the new plant for eight years, but it needs more fine-tuning and streamlining to enable us to increase our export to other markets. From a financial perspective, Sharlu is healthy and sufficiently stable to weather any competition, which is fierce in this business, and we will be enjoying continued YoY growth.