Lubricant Market Feasibility Study for Manufacturing Entry
The client lacked sector-specific intelligence on lubricant consumption trends, base oil import flows, and blending capacities within the Kingdom. There were also uncertainties around regulatory approvals, local workforce skills, and logistics for raw material imports. While initial estimates showed high demand, the client had no clarity on margin structures, pricing benchmarks, or long-term demand growth. Access to industrial land and understanding local port logistics were also barriers.
We delivered a detailed market research and feasibility study, including a 5-year demand forecast segmented by lubricant type (PCMO, HDMO, industrial), competitive benchmarking of 15 local and regional players, and identification of gaps in the current value chain. We assessed raw material supply chains (Group I–III base oils, additives), site feasibility near Dammam port, and regulatory requirements including SASO compliance and SFDA overlap. Financial modeling was conducted under three CAPEX and demand scenarios.
Conducted 32 stakeholder interviews across blenders, regulators, and distributors.
Compiled data from 80+ public and private sources to estimate consumption.
Benchmarked local vs imported brands across pricing and performance.
Modeled three investment scenarios: toll-blending, full plant, and hybrid model.
Conducted SWOT and PESTEL analysis for market entry.
Mapped licensing and approval timelines for each option.
Start with a hybrid toll-blending model to reduce upfront CAPEX.
Localize packaging and logistics first while scaling formulation R&D.
Partner with export zone regulators to enable regional distribution.
Target under-served B2B sectors such as small fleet operators and light industry.
Reassess full blending investment after 24 months based on volume milestones.
Based on our feasibility study, the client moved forward with a SAR 18 million toll-blending setup and local packaging line. They achieved breakeven within 15 months and captured 1.7% of the automotive lubricant market within 2 years. The project created 38 direct jobs and allowed the client to qualify for local manufacturing incentives. The consulting ROI was estimated at 4.1x from project acceleration, regulatory clarity, and market insights.
