To accommodate the increased capacity, the company plans to erect a building on a site adjacent to the present facility. The installation of four tanks and faster, more efficient equipment to fill drum cans are also planned.
The expansion is due to the growing automobile market which accounts for the bulk of lubricating oil demand, an Idemitsu official told Lube Report. In addition, the company will create a reserve pool to meetsudden spikes in demand. In China, the manufacturers lubricating oil sales are estimated to grow from 35 million liters to 46 million liters in 2007. As a supplier to Japanese automakers, the company has plans to expand its sales to U.S. carmakers.
The Tianjin Idemitsu plant – the first 100 percent-owned subsidiary of Idemitsu Kosan Co. in China – manufactures a wide variety of lubricants for the automotive and industrial markets, including all types of metalworking fluids such as cutting and rolling oils and maintenance oils like hydraulic and gear oils. Most of the base oil – used to make lubricating oil – will continue to be imported from Japan.
The cost of the entire endeavor is estimated at $5 million. Idemitsu Kosans annual sales are estimated at $28 billion worldwide.
Established in 1911, Tokyo-based Idemitsu is one of Japans largest oil and energy companies. Today, it operates four refineries and over 6,000 gas stations. Its subsidiaries are involved in crude oil development, crude oil transportation, coal mining and the production and marketing of petrochemical products. In addition to the Tianjin plant, the companys other Chinese venture includes owning shares of Kuo Horng Co. Ltd., a Taipei, Taiwan-based petroleum refiner and lubricants manufacturer, which has a plant in Changzou, China, where Idemitsu lubricants are manufactured.