Could you introduce Tulstar to our international audience?

Headquartered in Tulsa, Oklahoma, Tulstar has been in operation for 37 years as a chemical and oil distributor, supporting refiners and manufacturers with their distribution needs. We operate across six continents, shipping in and out of the US. Our interest in Latin America has grown after supporting various US manufacturers with their transit in the region, and we now move products regularly into Peru, Argentina, Chile, Guatemala, Costa Rica, Uruguay, and, more limited, Venezuela. APLA has given us a platform to connect with manufacturers requiring assistance with sourcing raw materials.

Do you mind elaborating on your product portfolio? How is Tulstar differentiating itself?

Tulstar offers transformer oil for the power industry, as well as base and processed oils, and any kind of lubricant and hydraulic motor oils. We also have some synthetic products. On the chemical side, we have several niches in refrigerant gases for HVAC (Heating, Ventilation, and Air Conditioning), propellants, chemicals for personal care applications, as well as some plastics additives. We add value to our customers through logistics, packaging, and micronizing services. For instance, we buy in bulk and then package into drums or totes, while for refrigerant gases, we repackage in different types of cylinders for the HVAC or personal care markets. Micronization is used to change the particle size of plastics or various food-grade ingredients used in the cosmetics industry. What has also helped us differentiate in the market is our credit service. We have partnerships with international credit issuers and we can offer different mechanisms to help buyers – this can be a 50% down payment followed by a net 30% or 45% on the balance, as an example. These financial tools have been an important differentiator in Latam Countries where cash can be a problem.

How has Tulstar performed in recent years given the volatility in the oil and chemical markets?

Tulstar has been fortunate to maintain steady growth, increasing our gross revenue by at least 10% every year for the past five years. In 2022, we exceeded US$50 million in gross sales. We consistently push our sales teams to be creative, which has allowed us to penetrate new markets and expand. At a market level, a surge in additional power grids has been driving demand for transformer oils and therefore contributing to our growth. Brent prices have been somewhat volatile, but we follow monthly index prices to protect ourselves and our clients, but also to be transparent. We are also careful with our inventory, maintaining safety stock to be able to supply our customers without interruption, even during a crisis period of the kind we experienced during the pandemic.

What makes the distribution model valuable in today’s environment?

Distributorship has different seasons: There are eras when everyone wants to go direct and not through a distributor, before realizing how complicated that can be. When frustration grows high enough, manufacturers go back to distributors. Post-pandemic, it has proven much more beneficial to have the additional arm of distribution, because we have safety stock on hand, we can move quickly if there is a crisis, and we have the transparency tools in case of delays. While manufacturers focus on production, as distributors, we have the freedom to focus on the service.

Are there any significant regulatory changes around the oil and lubricant markets?

The US Environmental Protection Agency (EPA) issued new regulations to phase out the consumption of HFCs by 85% over the next 15 years, which is triggering the production of various alternatives. Eventually, similar rules will come to Latam, but, for now, the region is still about a decade behind in terms of regulations. We also see a lot of shifts in the market as the EV market grows. While demand for motor oils declines, we are exploring opportunities in the lithium-ion batteries, either by acting as a distributor for lithium, or supporting the industry with safe recycling of used batteries.

We will continue to focus largely on the power sector, helping feed the growing demand for power infrastructure. Secondly, we have new eco-friendly products within our personal care line that we are preparing to commercialize.