Shell scheduled a ceremony today to herald the opening of its lubricant blending plant in Torzhok, Russia. The company claims that the 180,000 metric ton facility is the first large-scale foreign-owned lube plant in the country.
The opening of the plant has been anticipated for some time. Shell announced the project in mid-2009 and initially said it expected the plant to open by the end of 2010. Delays pushed the date back twice – first to the end of 2011, then to the middle of this year.
The facility represents a major investment by Shell in one of the worlds burgeoning lube markets. Although the company has not disclosed the cost of the plant, it has stated that it is one of the largest blending plants in Shells network. Russia is one of the worlds largest lubricant markets, and although demand has been relatively flat, observers see great potential for improvement in the quality of lubes sold there – and therefore in their value.
Foreign companies have grabbed an increasingly large share of Russias market as the quality of products has risen in recent years.
Shell has also said that it will gain logistical advantages through the local production of lubes that will be sold in Russia. It does expect to import base stocks and additives used in that production.
The opening ceremony is being held during a working meeting of Russias Ministry of Energy.