Sinopec Lubricant Co. and Fuchs China signed an agreement that could solve supply chain challenges and enhance resilience, the companies said in a press release.
As global supply chains have become more interconnected, they have at the same time become more vulnerable to disruption. A stark example was the pandemic that began in 2020, and nowhere was more affected than China, which in turn affected the rest of the world.
Fuchs China’s aim is to localize the supply chain as far as possible that it can withstand exogenic shocks such as COVID-19. Fuchs China’s “3L” policy of local research and development, local procurement and local production describes the company’s goals.
Local production and procurement would be met by Sinopec’s 300,000 tons per year of API Group III base oils produced at its Maoming refinery, as well as its additives.
The 3Ls tie in with the Chinese government’s decades-old “dual circulation,” or self-sufficiency, strategy, devised in 2015. Dual circulation aims to insulate the domestic market from the rest of the world and growing export markets overseas.