Petron recently secured the shovel open gear lubricant business at the Endako Mine in British Columbia, Canada. Endako is a molybdenum mine located near Prince George, B.C., and operates three P&H and one Bucyrus shovel. The evaluation of Petron Open Gear Lubricant 585 NC and 585 W was conducted over a nine month time period during winter, spring, and summer operations. Excellent product performance, reduced lubricant consumption, and technical service support were all key factors in the customer’s decision to convert to Petron.

ISO 9001:2000 Fourteenth Surveillance Audit

June 25, 2008

Petron completed its 14th surveillance audit under the ISO 9001:2000 standard on May 13, 2008. Our auditor, SRI, after a lengthy day of auditing our quality program, granted Petron unconditional approval.  These surveillance audits ensure that Petron is continuing to maintain a documented and effective quality system that meets Petron’s organizational objectives, in conformance with the quality system requirements.

The 9001:2000 standards put a much greater emphasis on customer satisfaction. To that end, Petron continues to conduct bi-annual customer satisfaction surveys as one method of gauging customer satisfaction. The results of these surveys are posted in the What’s New section of our website. Please go to “Customer satisfaction survey results” to view our ratings by the customers.

Congratulations to everyone at Petron for helping us achieve another unconditional approval on our ISO quality system.

Sincerely,

John P. McHale
Executive VP/General Manager

Petron Reduces Late Shipments in 2008.

By

Jim Bittner

Petron has reduced the number of late shipments in 2008 to just 3 in the first 7 months of operation.  This is down significantly from the 7 late shipments for the same period in 2007 and 2006.  That’s 3 late shipments in over 750 shipments this year.

What have we done to improve so significantly?  The implementation of the SysPro computer system allowed Petron to easily access to the sales data held within it, unlike the previous computer system.   Jim Bittner wrote a report that gives quick access to current stocking levels and provides early notification of product stock levels that are approaching reorder points.  This report has become a useful tool production planning and batch scheduling.  “It’s like driving at night with the high beams on instead of the low beams.”

Additionally, Petron’s Administrative, Quality, and Manufacturing departments review the reorder points and stocking levels on an annual basis by utilizing a different report developed by Roger Wichner and Jim Bittner.  The team approach allows Petron to balance manufacturing requirements, shelf-life, quality, and inventory valuation issues.   Having the right amount of the right product on the floor allows Petron to meet fluctuating customer demands without the cost of excess or obsolete inventory.

Why is it important to minimize late shipments?  In short, we want to be known as a supplier that meets the commitments we make.  We want our customers to know that when a salesperson makes a commitment, they can be sure that the commitment will be honored.

40^th Anniversary 

Petron Corporation is proud to announce that we are celebrating our 40^th year anniversary of being in business.

In 1968, Petron Corporation was founded by two enterprising visionaries, Art Klenner and Bill Buck. They started Petron based on the principle of quality specialty products for niche applications, coupled with superior service. Today,  that principle remains a key value and a cornerstone to our success.

Petron was sold in 1982; to the E.W. Phares family and became a member of the West Chemical Products family.

What started as a very small regional company serving the metalworking businesses in Milwaukee and the taconite mines in the UP of Michigan has now grown to a worldwide business serving the mining sector on every continent where mining occurs. We hold the lion’s share of open gear lubrication on mills in the US and Canada in the taconite /copper/gold and cement markets. We are gaining an ever increasing percent of market share in the shovel business each year. We are proud to list many major OEM’s in mills and kilns as some of our strongest supporters.

The size and scope of Petron has grown dramatically over the past 40 years but what has not changed is the focus we give the customer and how we respond to customer needs and concerns.

Thank you to all of you who have had a hand in helping Petron grow and succeed over these last 40 years. Your help is greatly appreciated and we look forward to working with you for decades to come.

Sincerely,

John P. McHale

Executive VP/General Manager

Quality & Technical Department – by Elisa Pieroni

      At Petron, Quality is our highest priority.  One program the Quality & Technical Department uses to monitor our performance in quality, is the ASTM Interlaboratory Crosscheck Program. ASTM’s Interlaboratory Crosscheck Program provides our lab with a statistical quality assurance tool that helps us compare our expertise running ASTM methods against other labs worldwide.  It is expected that in 2008 ASTM will have over 2,200 laboratories participating in their programs, which includes at least a 45% international participation.  

     The particular program Petron participates in has grown to 54 different labs worldwide.  Many of the participating labs are with the big oil companies like ExxonMobil (7 labs), Conoco, Citgo, Sunoco, and Valero.  There are some smaller companies in the oil and lubrication industry, some companies that develop testing equipment (Cannon Instrument and Saybolt), and some additive companies.  Some of the participants come from the USA, Egypt, Brazil, Hungary, Thailand, Croatia, Saudi Arabia, and Spain to name a few.  Petron has been performing in the ASTM Interlaboratory Crosscheck Program since May 2002.  Currently we are on a schedule where Jack, Mike, and Quinton each perform these tests 3 times a year.   Recently we received the December 07 which again showed we passed all ASTM tests.  The tests included Color (all labs passed), Copper Strip Corrosion (all labs passed), Density (33% were rejected or noted*), Flash point (19% rejected or noted*), Pour Point (10% rejected or noted*), cSt Viscosity @ 40^oC (17% rejected or noted*), cSt Viscosity @ 100^oC (17% rejected or noted*), and Water Separation- emulsion (19% rejected).  *noted = on the edge of failing through statistical data on the test and/or in conjunction with reproducibility. 

     In the near future we hope to be adding Dropping Point to our ASTM Interlaboratory Crosscheck Program testing as we have just received an instrument that will enable us to run this test in house.  This will help Petron save on both time a batch is in a kettle and money.

     The ASTM Interlaboratory Crosscheck Program provides Petron with a good measure and comfort factor in our testing program at Petron.  I am very Proud of the Gentlemen in the lab.  Jack, Mike, and Quinton should be very honored with their performance at Petron – everyday!   

 Special Announcement

It is with great pleasure that we announce the hiring of Ms. Barb LaFond effective  May 5^th, 2008. Barb has accepted the position of Purchasing Agent/Customer Service Representative/ISO Coordinator.

Barb’s primary responsibilities will be to handle all purchasing activity, service customer needs and coordinate the activities of our ISO 9001:2000 quality program.

Barb’s background includes over 25 years of experience in purchasing, customer service and production in a variety of industries including her most recent position as a Buyer for a steel fabricating company.

Please join in welcoming Barb to the Petron Team.

You can contact Barb by:

Email: blafond@petroncorp.com

Phone: 262-797-4680 Ext 29

Fax:     262-796-1080

Petron Corporation is pleased to announce the promotion of James (Jim) Bittner to Director of Operations effective February 4, 2008. Prior to this promotion Jim served as the Plant Manager for Petron since 2005.

Jim is taking over for Pat Ray who recently retired from Petron after more than 10 years of service. Jim worked closely with Pat on the overall running of Petron operations the last couple of years and that hands on experience will make for a smooth transition as Jim takes on this new role.

Jim has a BS degree in Chemistry from the University of Wisconsin and his MBA from UW-Milwaukee. Jim has over 10 years of plant operations experience.

Jim brings a wealth of knowledge, experience and energy to this job. 

Please join me in congratulating Jim on this well deserved promotion.

Sincerely,

John P. McHale

Executive VP/General Manager

Petron Corporation

PETRON CORPORATION
JANUARY 2008

Petron Corporation recently completed our fiscal 2007 and I am proud to report that we have set a new record for sales and profitability. Thanks to all of you who helped us achieve this wonderful accomplishment.

Our 2007 Sales were 6.5% ahead of 2006 and our Operating Profit in 2007 was 11% greater than 2006.

However, as we all know in business, it is not what you do for one quarter or one year that matters, it is being able to repeat that success over an extended period of time. To that end, I am very pleased to say that we have now set our 5^th consecutive year in a row in which we set records for sales, profitability and safety.

This degree of success does not happen on its own just by showing up everyday. It happens by having quality people giving 100% all the time. At Petron, we are very fortunate to have those people.

As I reported in the fall, the mining business worldwide continues to be extremely strong. Although copper prices have come down from their highs of $3.75 per pound, they remain above $3.00 per pound and that makes for a very strong copper market when combined with insatiable appetites for metals like copper and gold from countries like China and India. The iron, cement and coal business worldwide also remains very robust. There is no doubt that this is a fortuitous time to be in the mining related business.

The sub prime mortgage crisis and the related downturn in the housing market does not appear, at the moment at least, to be affecting the US demand for the mining related products. Again, the demand that controls our destiny is a worldwide demand not just US.

We started to see price increases in our raw materials and additives in the last quarter of 07, after having a relatively calm base oil market for the first part of 2007. When I last wrote an article for the fall edition of Tote Notes the price of a barrel of oil was at $81 per barrel. It is now in the low $90’s and we have had excursions up $100 per barrel in the last month or so. It is just too difficult to predict what will happen to the price of a barrel of oil in 2008 and what effect it may have on our operation. We just have to remain diligent to our cost structure and react accordingly when our costs go up.

The key to Petron’s success is taking care of existing customers via good technical service, quality products and fair pricing, as well as developing new customers. Petron continues to put it focus on expanding market share in specific mining sectors throughout the world. This laser beam approach continues to serve Petron well. Both Gerry Enroth and Bob Colombo and their respective teams have done a terrific job in the last 5 years of expanding our customer base and at the same time taking care of the existing customers.

We have just completed 8 years (8years!!) without a reportable lost time accident. Congratulations to all of you for making safety your number one priority. This is a terrific accomplishment and you should all take pride in knowing that you helped contribute to this record.

I want to take this opportunity to thank everyone at Petron for their commitment to growing the company in a safe and profitable way. In addition, I want to thank all of our customers and suppliers for all of their support and loyalty.

John P. McHale
Executive VP/General Manager

The International Mining Division of Petron Corporation is pleased to announce the placement of Mr. John Hu as Manager, Sales and Service in the Peoples Republic of China. John comes to Petron with a well rounded background in industrial lubricants in numerous Chinese markets. John started his career in China working for Fuchs Lubritech Gmbh providing technical support to sales teams in industrial metal working markets. When John left Fuchs, he was Products Manager in charge of transmission suppliers for ZF, Volkswagen and Shanghai Automotive Gearbox.

In 2000, John joined Caltex Corporation which is a lubricants joint venture between Chevron and Texaco. John worked as the Technical Coordinator for central China for both internal and external customers. After numerous promotions that took John through Caltex, ChevronTexaco and finally Chevron Global Lubricants, John was assigned the position of Area Manager, Strategic Business Development for OEM’s in Central China. John worked with both Chinese and global OEMs including the new Caterpillar Construction Equipment plants that annually manufacture more than three-thousand excavators, wheel loaders and motor-graders.

John graduated from the Hunan University of Science & Technology with a Bachelors degree in Mechanical Engineering. When not working, John likes to read historical and investment books and travel with his family throughout China.

John resides in Shanghai, China with his wife and four-year old daughter, Briget and can be contacted through his Petron email address which is jhu@petroncorp.com. Please join me in welcoming John and his family to our family here at Petron.

Bob Colombo
Mgr/International Mining Division
Petron Corporation

Dear Mr Matthysen

As per our recent discussion, we hereby confirm that Eskom introduced Petron Gearshield
NC as an operational open gear lubricant on coal mill girth gear drives in 1996 following
extensive laboratory testing and in-service testing of the lubricant. The lubricant met all the
requirements of Eskom specification GGSS 0587 and was subsequently added to the Eskom
approved lubricants list.

To date the lubricant has exceeded an estimated 7000000 combined operating hours on 128
mills without any lubricant related failure, based on Eskom’s requirement of 40 year minimum
gear life. In most cases we expect to easily exceed this requirement for failures based on
wear.

Should the lubricant remain cost effective at power stations currently using the lubricant, it is
estimated, based on current load factors that the lubricant will achieve 10 million hours by the
year 2010.
Looking forward to your continued support.

Yours sincerely
LF Barker
Chief engineering Advisor
Generation Technology Department.