Valvoline’s China Blending Plant Completed

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Valvoline’s China Blending Plant Completed
The Valvoline China Lubricant Plant in Zhangjiagang, Jiangsu Province, China was completed by Fluor ahead of schedule. © Business Wire

Fluor Corp. announced on Sept. 15 that it safely achieved mechanical completion of Valvoline’s lubricants blending plant in Zhangjiagang, China, ahead of schedule.

Valvoline announced in 2018 plans for the new blending and packaging facility, saying it would be its largest blending plant investment worldwide at ¥443 million (then U.S. $70 million). The plant is expected to open in early fiscal 2021, Valvoline stated in its quarterly report on Aug. 4. The company’s 2021 fiscal year starts in October 2020.

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Located on about 20 acres in Zhangjiagang, the 80,000 square meter plant will have capacity to supply more than 30 million gallons (about 103,000 metric tons) of finished lubricants and coolants per year for both passenger car and heavy-duty vehicle customers.

Valvoline said in a March 2020 United States Securities and Exchange Commission filing that it temporarily halted construction on its lubricants plant in China in February this year and implemented work-from-home protocols for employees in its China office due to the impact of the COVID-19 virus. Construction on the lubricants plant resumed and work-from-home protocols in China largely ended in early March.

The plant was intended to meet rapidly growing demand for high-quality lubricants and coolants for both passenger car and heavy-duty customers, Valvoline stated in its announcement then.

At the time, company officials said Valvoline chose the Zhangjiagang site for several reasons. The plant location in East China is close to a large portion of the Chinese lube market and many original equipment manufacturers. The location also has logistical advantages relative to key raw materials.

The company also believed the plant would help lower manufacturing costs, so it could help capture the margin that it paid to unrelated toll blenders with which it does business in China. The company had seen similar benefits in India from its Valvoline Cummins joint venture, which has a lubricants blending plant in Ambernath.

Fluor’s scope of work on the project included detailed engineering, procurement and construction management executed under a lump-sum services contract.