The Kaluga plant will produce a wide range of finished products such as car and tractor engine lubes, transmission and compressor oils, as well as refrigeration, hydraulic and cooling fluids. The plant will include modern production and filling facilities, a laboratory, a tank farm and a warehouse for finished products.

The groundbreaking ceremony is scheduled for July 6, Sokolova said. It will take place in the presence of high-ranking ambassadors of the region and city of Kaluga as well as Stefan Fuchs, the companys chief executive officer. Fuchs Oil is the German lubes producers Russia subsidiary.

In fast growing markets like Russia it is essential for us to have a local presence, not only with sales and distribution but especially with our own production, Stefan Fuchs said. He emphasized the importance of Russia for the company. This is the only way to fulfill customer requirements locally and to create value in the country at the same time.

The blending plant cooperation agreement was signed last week by Nikolay Kuznetsov, general director of Fuchs Oil, and Anatoly Artamenov, governor of Kaluga oblast. Fuchs Oil is becoming a new member of the automobile manufacturers cluster in the region, the company said in a statement.

Kaluga region is one of the centers of the Russian automotive industry. Volkswagen, Volvo Trucks and Volvo subsidiary Renault Trucks, and an alliance between Peugeot-Citroen and Mitsubishi all opened assembly plants here. The region is also a home to the production facilities of several automotive suppliers, such as Continental, Magna, Benteler, Visteon and Lear.

Fuchs first blending plant in Russia was opened in 2008, producing only metalworking fluids. As a result of the countrys booming automotive industry, it wanted to expand its products to a wide range of finished lubricants. With Yaroslavl lacking ideal conditions for that, Fuchs instead picked the Kaluga region for its expansion.

We are very pleased with the development of infrastructure here. The region is one of the leaders for industrial development in Russia, Fuchs Kuznetsov said, adding that the high standards of the new plant will meet the increasing demand for high quality lubricants in Russia.

The Mannheim, Germany-based company has more than 120 subsidiaries in a number of countries including Finland, Ukraine, Poland, Slovakia, Hungary, Slovenia, Croatia, Macedonia, Portugal, Spain, Great Britain. The new plant in Russia is part of a global investment program for Fuchs Petrolub AG, which has already made significant investments in China, India and Brazil.

Fuchs is one of the worlds largest marketers of lubricants and specialty fluids with 3,515 employees worldwide and annual sales revenues of 1.2 billion. It produces around 9,000 brands and types of lubricants, greases, and specialty fluids for many industry areas.

Fuchs is the second foreign lubricants major operating in Russia to commit to opening a blending plant there. Two years ago Shell started a bigger project, investing $100 million in it. The 180,000 tons per year plant in the Torzhok, Tver region was originally scheduled to be fully operational by the end of last year or early 2011.

Shell has delayed the plant opening to late 2011, citing reasons such as developmental issues and material supply delays. It will be one of the largest in Shells network worldwide, and the company recently said it is committed to completing it.