Sri Lanka Gets 3rd Blending Plant


Malaysia’s Hyrax Oil will set up a lubricant blending plant in Sri Lanka with state-run Ceylon Petroleum Corp. An official with the latter company told Lube Report Asia that the facility, which will be the nations third blending plant, will cost U.S. $9 million.

Ceylon Petroleum Corp. once had a monopoly on the nations lubricant market but sold the business in the mid-1990s to Caltex, which is now part of U.S.-based Chevron. Ceylon Petroleum Corp. has the nations largest network of fueling stations, which would provide sales outlets for lubricants made at the joint venture blending plant.

Ceylon Petroleum Corp. Managing Director L.E. Susantha Silva said Sunday that the plant will manufacture a variety of automobile lubricants for both the domestic and international markets.

The Sri Lankan government issues licenses for the blending and sale of lubricants. Currently Chevron Lanka and Lanka IOC (a subsidiary of Indian Oil Corp.) are the only companies authorized to blend lubricants. Those companies and 11 others are licensed for lube sales.

Earlier this year, though, the government stated its willingness to issue additional licenses as a way of introducing more competition to the market. Industry insiders say that increasing the number of licenses could also help combat smuggling of unlicensed products and sales of counterfeit lubes.

Hyrax is based in Kuala Lampur and produces lubricants at its factory in Klang, Malaysia. Last year it announced a joint venture with Petroleos de Mocambique to build a blending plant in Mozambique.