It's certainly possible. There's no reason for them to go hard with importing or building facilities until they actually increase their visibility, as they apparently intend to do.
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Total Quartz 9000 Future 0W-20 VOA
- Thread starter HappyLittlePony
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Total has a blending and bottling plant in Guadalajara, Mexico. I don't know if it is big enough for supplying all of North America by itself or just Mexico and perhaps the Caribbean. All Total and ELF oils sold over here are made in that plant, the vast majority are third world products (20W-50 and up) but maybe the good stuff goes to the US.
And since they have to import the components to blend the oil, I assume that it is cheaper to import them from the US than from Europe, and they could use the same provider as Ashland which I think is Infineum but don't quote me on that.
And since they have to import the components to blend the oil, I assume that it is cheaper to import them from the US than from Europe, and they could use the same provider as Ashland which I think is Infineum but don't quote me on that.
When you say "Over Here" are you referring to North America or just Mexico?
The bottles the OP purchased say "Made in USA" on the label as posted by the OP, not "Hecho en Mexico".
The bottles the OP purchased say "Made in USA" on the label as posted by the OP, not "Hecho en Mexico".
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Yes "over here" is Mexico.
Country of origin rules have many loopholes. Like the percentage of value added or the substantial transformation, since Mexico has no refining capabilities an oil that is blended an bottled in Mexico form components refined in the US could be marked as "Made in USA" because the more substantial transformation occurred in the United States. Or the value added in Mexico is less than the value added in the US.
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Substantial Transformation
The traditional substantial transformation rule states that a good originates in the last country where it emerged from a given process with a "distinctive name, character or use." The substantial transformation of a good requires more than just a change in the article -- it requires an article be transformed into a "new and different article" "having a distinctive name, character or use."
Substantial transformation captures the purpose of origin determination in a simple, concise manner: a good is a product of the country where it last underwent substantial transformation.
Value-Added Percentage Test
The value-added test defines the degree of transformation required to confer origin on the good in terms of a minimum percentage of value that must come from the originating country or a maximum amount of value that can come from the use of imported parts and materials. If the percentage does not fall within the accepted range, the last production process will not confer origin. If the determination is for non- preferential purposes, origin will be conferred on a prior country; if it is for preferential purposes, no further origin determination is necessary unless the prior county is also a beneficiary country under a preferential trading agreement with the importing county.
The value-added test can generate substantial compliance costs for companies. Further, it can generate substantial uncertainty because the test ignores exchange rate risk and fluctuations in the price of raw materials, the possible daily changes in status of goods as the currency values or price of raw materials fluctuate, and so forth.
Country of origin rules have many loopholes. Like the percentage of value added or the substantial transformation, since Mexico has no refining capabilities an oil that is blended an bottled in Mexico form components refined in the US could be marked as "Made in USA" because the more substantial transformation occurred in the United States. Or the value added in Mexico is less than the value added in the US.
Quote:
Substantial Transformation
The traditional substantial transformation rule states that a good originates in the last country where it emerged from a given process with a "distinctive name, character or use." The substantial transformation of a good requires more than just a change in the article -- it requires an article be transformed into a "new and different article" "having a distinctive name, character or use."
Substantial transformation captures the purpose of origin determination in a simple, concise manner: a good is a product of the country where it last underwent substantial transformation.
Value-Added Percentage Test
The value-added test defines the degree of transformation required to confer origin on the good in terms of a minimum percentage of value that must come from the originating country or a maximum amount of value that can come from the use of imported parts and materials. If the percentage does not fall within the accepted range, the last production process will not confer origin. If the determination is for non- preferential purposes, origin will be conferred on a prior country; if it is for preferential purposes, no further origin determination is necessary unless the prior county is also a beneficiary country under a preferential trading agreement with the importing county.
The value-added test can generate substantial compliance costs for companies. Further, it can generate substantial uncertainty because the test ignores exchange rate risk and fluctuations in the price of raw materials, the possible daily changes in status of goods as the currency values or price of raw materials fluctuate, and so forth.
OK, but what in this case would be altered in the USA if the oil was bottled in Guadalajara?
For example: crude oil from Venezuela at 0.45 dollars per liter was shipped to the US to be refined and it was transformed into refined oil at $7.00 per liter, then it was shipped to Mexico to be bottled as engine oil at $9.00 per liter. What is its country of origin? Venezuela, USA or Mexico. The rule of added value allows the oil to be branded as "Made in USA" because it was the country that added more of its value.
So you're saying this is what Total is doing?
I know Mexico imports some petroleum products from the US as the domestic refining capacity in Mexico doesn't keep pace with demand, including lube base stocks.
SOPUS doesn't follow the route you've described, they put "Made in the USA from domestic and imported components" on their products in the US.
I know Mexico imports some petroleum products from the US as the domestic refining capacity in Mexico doesn't keep pace with demand, including lube base stocks.
SOPUS doesn't follow the route you've described, they put "Made in the USA from domestic and imported components" on their products in the US.
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Yes, it is a plausible theory. I am sure the deciding factor is money. Which option gives Total a bigger profit. Pay to Ashland to buy basestocks from other companies to blend and bottle their oil with your brand. Or eliminate the middle man and buy yourself the basestocks to blend and bottle your own oil in a factory you already have.
The transportation costs would be much less contracting an established US supplier in this case though. How much savings would the theoretical route you postulated generate vs. the additional freight costs, just to put a "Made in USA" label on it?
It's reasonable to also postulate the Guadalajara plant is bottling for domestic Mexico market demand with Group 1 base stocks based on the info you've supplied, and the demand for refined petroleum in Mexico having outpaced supply for decades.
It's reasonable to also postulate the Guadalajara plant is bottling for domestic Mexico market demand with Group 1 base stocks based on the info you've supplied, and the demand for refined petroleum in Mexico having outpaced supply for decades.
I don't know the size of the plant, maybe they are just two guys with a funnel, or is a first world plant. although is certified by API because they made some API SN, and ILSAC GF-5 oils, but they also made bad oils because is what the Mexican market demands,
But 0W-20 in this thread is synthetic base stock, correct? Not just API SN ILSAC GF-5 that plenty of conventional oil formulations are shown to meet. So the base stock has to follow the route you described for the label to read what it does?
I don't classify Group 1 base stock as "bad oils" personally, I used them for many years and never had an engine lubrication problem.
I worked a job back in 1986 regarding Group 1 base stocks being imported by PEMEX; I was sent to Brownsville, TX where they were in the storage terminal tanks to perform final inspection for quantity & quality before final export shipment. So I know Mexico has imported lube base stocks to meet demand for years. In the early 1991 I was in charge of gasoline blending when we started blending specific Mexico grade specs 87 octane unleaded gasoline for export to Mexico, followed the next year by an assignment for building a pipeline to Laredo, TX to supply a new storage terminal being built there.
I don't classify Group 1 base stock as "bad oils" personally, I used them for many years and never had an engine lubrication problem.
I worked a job back in 1986 regarding Group 1 base stocks being imported by PEMEX; I was sent to Brownsville, TX where they were in the storage terminal tanks to perform final inspection for quantity & quality before final export shipment. So I know Mexico has imported lube base stocks to meet demand for years. In the early 1991 I was in charge of gasoline blending when we started blending specific Mexico grade specs 87 octane unleaded gasoline for export to Mexico, followed the next year by an assignment for building a pipeline to Laredo, TX to supply a new storage terminal being built there.
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Yeah I admit is a convoluted route, but it is a route that is followed by many others, for example, Mexico also doesn't have the capability to produce steel or aluminium, yet they are imported to produce cars and engines that later are exported, the same is true for airbags and safety belts. But these costs are offset by the cheap labor and lack of taxation.
Also it occurred to me now that Total may be looking ahead as the Mexicans now privatized what is left of Pemex and the underground reserves, I bet Total wants a piece of the extraction and refining business, if they put a refinery in Mexico suddenly the Guadalajara plant has an advantage over every other plant in the US.
Also it occurred to me now that Total may be looking ahead as the Mexicans now privatized what is left of Pemex and the underground reserves, I bet Total wants a piece of the extraction and refining business, if they put a refinery in Mexico suddenly the Guadalajara plant has an advantage over every other plant in the US.
But refined petroleum products have not historically followed such a route due to domestic demand in Mexico vs. supply.
The labor & taxation savings must more than counterbalance the transportation costs back to a place where there is an excess of supply, as noted by the export of refined petroleum products from the US. This includes transportation fuels in Mexico.
Total has always been focused on gaining market share - it's a key principle in that company's mission statement, and a wise choice in a global economy with materials like petroleum. Market share in the USA however hasn't been a big focus for Total since they sold all their US refineries in the 1990's; their big investment in the USA is a joint venture steam cracking complex (world's largest) adjacent to the Total (formerly Fina) refinery in Port Arthur, TX (and produces no lubricating oil base stocks). That has paid off handsomely with all the additional natural gas liquids supply that the US continues to produce.
The labor & taxation savings must more than counterbalance the transportation costs back to a place where there is an excess of supply, as noted by the export of refined petroleum products from the US. This includes transportation fuels in Mexico.
Total has always been focused on gaining market share - it's a key principle in that company's mission statement, and a wise choice in a global economy with materials like petroleum. Market share in the USA however hasn't been a big focus for Total since they sold all their US refineries in the 1990's; their big investment in the USA is a joint venture steam cracking complex (world's largest) adjacent to the Total (formerly Fina) refinery in Port Arthur, TX (and produces no lubricating oil base stocks). That has paid off handsomely with all the additional natural gas liquids supply that the US continues to produce.
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I love how in the true spirit of BITOG we are discussing export and transportation costs based on a VOA of an oil with some sodium in it. I just advanced the theory of fabrication in Mexico because I knew that there was a plant here and I didn't like the theory of fabrication by Ashland.
A quick look at their corporate website could had save us some time
Quote:
A subsidiary of Total, S.A., an international oil company, Total Lubricants USA, Inc. has manufacturing and office facilities in New Jersey, North Carolina, and Tennessee as well as a sales office in Germany.
Quote:
Our Distributor Sales Team operates in conjunction with seven blending plants and seven warehouses in addition to the main Total Lubricants USA factory.
So, in conclusion Total oils are made by Total and not Ashland.
A quick look at their corporate website could had save us some time
Quote:
A subsidiary of Total, S.A., an international oil company, Total Lubricants USA, Inc. has manufacturing and office facilities in New Jersey, North Carolina, and Tennessee as well as a sales office in Germany.
Quote:
Our Distributor Sales Team operates in conjunction with seven blending plants and seven warehouses in addition to the main Total Lubricants USA factory.
So, in conclusion Total oils are made by Total and not Ashland.
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Without showing anything is imported by Total, unlike SOPUS.
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