The global base oil market is mired in a surplus that grows larger with every expansion and new plant opening. So when Hrnd decided to expand its East China plant, it opted to make stocks for applications other than lubricants.
The company, formally named Hengrunde Petrifaction, is nearing completion of an expansion that will increase the capacity of its plant in Dongying, Shandong province by 100,000 metric tons per year. According to the company, the new volume will be mostly white oils.
The new facility will be producing API Group II+ base oil, specifically highly refined 500 neutral and 600N, mainly for the food and cosmetics industries, a Hrnd senior manager told Lube Report Asia last week. He added that the facility, which uses the dewaxing technology from Sinopecs research arm Fushun Research Institute of Petroleum and Petrochemicals, is expected to start operation in September.
The company did not disclose the cost of the project.
Hrnds current facility is producing Group II base stocks for engine lubes. But we have realized Group I and II base stocks are oversupplied in the market, so with this new facility we hope to attract more lucrative clients, said the senior manager, who asked not to be identified. He added that the project was designed to accommodate a further expansion of 400,000 t/y in case the business goes well.
Established in 2005, Hrnd is part of Shandong Hrnd Group, a private company with several subsidiaries that provide base oils, fuels and landscaping services.