Fuchs Australia Stretches into Bigger Facility


Fuchs Australia Stretches into Bigger Facility

Fuchs Lubricants (Australasia) Ptys new blending plant near Newcastle on Australias east coast will help it shut its dated facility nearby, triple its local lube output to around 66,000 metric tons per year and continue to snare market share.

The new facility approaching handover next month is set on 25,000 square metres in Beresfield, New South Wales, in a new industrial park called Freeway North. Production at the new unit will replace an existing facility in nearby Wickham.

The existing plant is too old and too small and does not meet the future needs of our growing business, so the rationale is we need a new and bigger plant that has better logistics and state of the art equipment, Managing Director Wayne Hoiles told Lube Report Asia. It is a significant investment. I cant give you the actual number, but it is in the tens of millions of [Australian] dollars.

Fuchs Lubricants Australasia is a wholly-owned unit of German-based Fuchs Petrolub, which last month said in its annual report to shareholders that it had spent 100 million euros in 2016 expanding facilities, including in Australia, the United States, Sweden, South Africa and China.

The new fully-automated plant will also enable Fuchs to meet rapidly changing demands from original equipment manufacturers and emissions regulators. We have seen a significant shift towards synthetic products, Hoiles said, adding that Fuchs estimates that its synlubes will grow by 50 percent per year in the next three to five years.

Hoiles said Fuchs premium synthetic engine oil, Titan GT1 Pro Flex SAE 5W-30, was currently one of the company’s five best-selling lubricants in the country. According to the companys website, the product was developed for modern passenger and light commercial vehicles with aftertreatment systems and turbochargers.

Thats something that years ago was very small-volume, and now its one of our top-selling products, Hoiles said. Its a significant shift. We used have 15W-40 [viscosity grade oils] and then 10W-30s, 5W-20s, 0W-20s, and now youre talking about 0W-16s and potentially 0W-8s in the future.

The company was the fourth-biggest lubricant supplier in Australia in 2016, up from number five just a couple of years earlier, he said, adding that its on course to leapfrog Viva anytime soon and be ranked third after Caltex and BP.

Fuchs investment fits with its strategy to supply its markets through local production facilities. This is at odds with recent strategies of other major lubricants suppliers in Australia, which have shifted blending offshore and taken up models more reliant on imports, Hoiles said. We are not doing that, he emphasized, adding Fuchs had gained market share in recent years from import-oriented competition. He claimed that 96 percent of Fuchs products sold in Australia in 2016 was produced in Australia.

We believe the only way you can service a customer is to be close, so if a customer has a problem, you have the capacity to blend oil and get it to them in a fast period of time, said Hoiles. Its very hard to get a B-double of oil on a plane and get it out there to your customers.

Hoiles said the Australian unit at times had to jump in and help miner customers avert emergency shutdowns. He described situations in which mining operations have called Fuchs in need of as much of 30,000 liters of oil within 24 hours after undergoing an accident such as a burst hose. In some instances, the Fuchs production team came in on a weekend, blended a particular batch of lubricants and got it to the transport company for delivery to the mine in time. If it werent for that type of customer service, some mines wouldnt still be running, he said.

Photo: Caroline Falls / Lube Report Asia

Freeway North industrial park is adjacent to the New England Highway that traverses inland from Newcastle through mining country to Queensland states major mining service center city of Toowoomba. It also provides access to the 900-kilometer Pacific Highway.

Project manager on the site, ATB Morton construction groups Adam OConnor, said he believed the project was valued at as much as AUD $30 million (U.S. $22.5 million). It comprises a 2,230 square meter blending plant, a warehousing facility, a tank farm for base oils and additives, a laboratory and a multi-story office tower. All the storage and blending tanks and pipes are food-grade stainless steel, built locally by Victoria-based Furphy Engineering. All equipment will be new except the laboratory, which is being transferred from the Wickham facility.

The plant has been built with capacity to add in extra storage and blending units as required. The final stage of the project – a doubling of the warehousing facility to 6,400 square meters – will be completed later.