UK lubricant manufacturer, Aztec Oils, uses an innovative manufacturing and distribution model to maintain its competitive edge
For over 29 years, Aztec Oils has been building its reputation as a reliable and ethical supplier of high-quality lubricants. The company has a long and storied history of innovation and adaptability, as Managing Director, Mark Lord, begins: “I started the business in 1995, initially as a distributor of a comprehensive range of automotive and industrial lubricants. We grew organically, developing from buying finished packaged lubricants, to installing bulk storage tanks to pack our own, to now manufacturing 95 percent of all the products we sell. From initially supplying engineering, agricultural and automotive users within the area of East Midlands and South Yorkshire, we grew by building sustainable relationships with independent lubricant resellers across the UK and Ireland.
“In 2010, I bought a small, long established lubricant blender in the West Midlands, Oiline Ltd, which had a history going back to the 1920s. It quickly became clear that having two manufacturing sites was not a cost-effective option and over a five year period the business here was transferred to the Bolsover site which had grown substantially and now occupied a significant part of the former Bolsover Colliery which was owned by Welbeck Estates and had been divided up into industrial units and compounds following the mine’s closure in 1991. We still required more land to grow the business, so I negotiated to purchase the site we were operating from, and the surrounding tenanted buildings, to give me the footprint needed for sustainable growth.
“This now gave us a six-acre site in which to invest, building over the years to increase the number of bulk storage tanks and capacity blending capabilities, alongside warehousing and offices. At this point, we were a hybrid model supplying both end users and selling through independent distributors. In 2016, one of our larger customers in Scotland failed, owing us a substantial amount of money. Their core, long-established business was lubricants, although they had diversified into fuel distribution which is what had got them into trouble. The lubricant team, however, was a highly competent and efficiently run operation and I had no hesitation in negotiating to buy the company out of administration. Aztec Northern, based in Buckie on the Moray Firth has since grown to be the jewel in our crown. The two key directors were given shares in the business and have, very much, made it their own.
“Meanwhile in the West Midlands at Oiline, we had a site that was no longer manufacturing and without the right person to drive it forward, I decided to sell the site to one of our distributors who was keen to expand into the area. At this point in our evolution, we were still supplying a considerable amount of ‘private label’ lubricants to the independent distributors who had a substantial share of the market. This left us in a vulnerable position, as they had the ability to take the business to another blender, forcing us to work at ever diminishing margins. Producing ‘private label’ products, especially in smaller pack sizes, of one or five liters, is not economical from a manufacturing point of view, and with the development of our site and vastly increased warehousing facilities, it was decided we would redesign our Aztec brand which has proved to be incredibly effective in gaining market penetration. The focus was now on efficiency as we worked on lean manufacturing techniques to maximize output and keep costs down.
Strategic success
“It became clear that lean manufacturing techniques and the service levels that are required by end users were not compatible and the drive was on to appoint regional ‘Aztec Distributors’ to ensure end user customers could access our products in a timely manner. In 2019, an opportunity came along to purchase another, long established, lubricant blender with a history going back over 100 years. Caldo Oils in St Helens, Merseyside was a small blender and fuel distributor with distribution depots in Newton Abbot in Devon and Rhuddlan in North Wales. The company was at this time, contract packing our five liter and one liter production, so was a natural fit for us. The distribution company in Devon was of particular interest and having identified the abilities of the management team there, they were tasked with driving the business forward as Aztec Oils Southwest Ltd, independent from the parent company and incentivized by a shareholding. Like our distribution business in Scotland, this proved to be very successful, and they have done an amazing job in establishing the Aztec brand in the south west. The much smaller depot in North Wales was closed as there was nobody identified as being able to develop it.
“My ethos has always been to identify talent, nurture it and give people ownership of their own futures. It is all about people. Having the right people in an organization is essential to success, yet, sometimes finding these people can be difficult. The lubricant business is incredibly competitive and has thrown up enormous challenges over the years. Brexit was a huge problem which introduced unnecessary costs and delays in moving product into Ireland. As soon as the problem was identified, I sought a solution in establishing a company in Northern Ireland to ensure goods could pass through the province to Eire without delay and customs issues for our customers there. This has been greatly appreciated and has greatly strengthened the partnerships we have there.
“In 2021, I formed an Employee Ownership Trust to sell half the business to the staff, with my eye firmly on the future and the desire to see the firm continue to develop and prosper well after I have finally retired, something I have no imminent plans to do! Part of my residual ownership of the company is being released into growth shares to key directors who will continue to drive the company. This is all part of my belief in key staff having the incentive to succeed, ‘having skin in the game’.
Drive and ambition
“Covid and the war in Ukraine have thrown up yet more challenges, and uncertainty is the biggest factor we must all deal with currently. While demand has been muted in our home markets, growth has come from new export markets we have developed around the world on the back of our strong brand image which has gained great acceptance in the Far East, Middle East, Africa and South America.
“Marketing has played an important part in the company’s development and in 2023 we partnered with an independent school near Scunthorpe called Act Fast. They are based at Kieradan Park, a motocross racetrack, and offer opportunities for children, who have found mainstream educational establishments challenging, to develop skills in mechanical engineering as well as motorcycle racing. This was a great opportunity to work closely in developing our bespoke motorbike products, prove them in action and study the effects on the components when the engine is stripped down. This work is ongoing as we develop superior products that will be proven on the racetrack. Act Fast is our brand ambassador of our Mototec Motorcycle range.
“In the current uncertain climate and acknowledging the strength of our owned distributor businesses in Scotland and Devon, the opportunity presented itself in the recognition of key individuals with the drive and ambition to run their own companies. Aztec Oils Northwest Ltd started trading in May 2023 and Aztec Oils Southeast Ltd commenced trading in July 2023. I have no doubt these businesses will be great successes driven by people ‘with skin in the game’. The future is far from certain, but I believe we have a roadmap for success driven by impassioned staff with a huge desire to succeed.”