Richful Announces Project Delays


Richful Lube Additive Co. last month announced delays for two major projects – the upgrading of a lubricant additives plant and construction of a new research center – from the end of 2023 to the end of 2025.

The larger project involves retrofitting its existing facility in Xinxiang, China, including building production lines that can make 150,000 metric tons per year of chemical additives, including 100,000 t/y of alkylbenzene sulfonate and 50,000 t/y of ashless dispersant. The first stage of 60,000 t/y was completed and put into use in 2022. The construction of the rest of the new capacity and a 460,000 t/y additives project that is also located in Xinxiang county, are scheduled to be completed by the end of 2025.

The 460,000 t/y project, which will include production lines for 125,000 t/y of zinc dialkyldithiophosphate and 130,000 t/y ashless dispersant, was announced by the company in 2022 to replace a 72,800 t/y additives project that was planned in 2020. In a response to a note from the Shenzhen Stock Exchange warning that is had diverged from statements of how it would use proceeds from a stock offering, Richful stated Dec. 29 that funds raised through the 2020 stock offering for the 72,800 t/y project needed to be directed towards the 460,000 t/y ZDDP and ashless dispersant project.

Richful denied any wrongdoings. The company did not responde to an interview request from Lube Report.

The other project is a research center built to the global standard. In a statement issued on Dec. 29, the company said that the slow process of securing the land use rights caused the delay.

At several conference calls with investors in 2023, representatives from the company fielded inquiries about the “excessive” size of the larger project, given weak sales of internal combustion engine vehicles in China. Richful officials responded that the company aimed to supply the global market, and engine oils are just one of the many products using additives.

According to the company, it started to supply additives for Shell marine oils sold in Hong Kong and expected to supply more markets, including Japan, United Arab Emirates and South Korea in 2024. It also expected to be a supplier for ExxonMobil marine oils in 2024 and added that an ExxonMobil gear oil unit could also be a client if Richful could get Flender certification for its additives, according to the company. Flender is a major mechanical and electrical drive technology company.

Exports contributed 76% of the total sales in Richful in the first half of 2023, during which its net profits grew 71% year-on-year to ¥249 million (U.S. $34.8 million), according to the company’s 2023 half-year report issued in August last year. In the report, Richful warned that changes in geopolitics could significantly affected its businesses.

In 2022, Richful got help from the China council for the promotion of international trade , which has offices nationwide to support local companies selling products outside of China, to expand businesses in Russia. Western additives suppliers had pulled out due to Russia’s invasion of Ukraine. That year, its net profits almost doubled from 2021 to ¥588 million.

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