Colombo-based Chevron Lubricants Lanka reported that profit grew 10% to 478.6 million Sri Lankan rupees (U.S. $2.5 million) for the fourth quarter, compared to the same period in 2019. For the full year, profit increased 6% to Rs 2.2 billion.

Sales revenue for the fourth quarter was up 4% at Rs 2.6 billion. For 2020, sales were down 2% at Rs 11.6 billion.

In interim financial statements to the Colombo Stock Exchange, the company said operating profit rose 9% to Rs 648.6 million in the fourth quarter, while operating profit for 2020 increased 4% to Rs 3 billion.

Chevron Lubricants Lanka imports, blends, distributes and markets lubricants and greases. The company operates a blending plant in Sapugaskanda.

KH Neochem

KH Neochem’s performance materials segment, which includes refrigeration lubricant raw materials, reported operating profit of 1.5 billion yen (U.S. $14 million) for the fourth quarter, down 17% from 2019’s fourth quarter. For 2020, the segment’s operating profit declined 37% to ¥5.1 billion.

In the fourth quarter, the segment’s net sales edged up 2% to ¥9.1 billion. Net sales for 2020 declined 18% to ¥30.5 billion.

The Tokyo-based company specializes in hydroformylation, or oxo reactions, that produce alcohols and esters along with derivatives such as 2-ethylhexanoic acid and isononanoic acid, which it sells as raw materials for lubricants. It also makes fatty acids, esters and feedstocks for niche lubricants used in refrigeration compressors.

The company said in its earnings presentation that in 2020, due to spread of COVID-19, demand in many of its business segments was sluggish, and market conditions softened. Japan declared a state of emergency early in the second quarter. KH Neochem noted that although air conditioner production volume declined in the first quarter last year, no major dip occurred in demand for its refrigeration lubricant raw materials. However, demand declined during the second and third quarters as inventory adjustments persisted in different supply chain stages. Demand then recovered, starting early in the fourth quarter.

According to the company, 2021 is the final year of its third medium-term business plan, instituted in 2019. KH Neochem expects that demand for its refrigeration lubricant raw materials will grow, and conversion to a new type of refrigerant will continue in Asian countries. China’s share of new hydrofluorocarbons refrigerant will increase from 74 percent to 99 percent from 2018 to 2025, while in the rest of Asia, excluding Japan, it will increase from 70 percent to 90 percent, the company previously said. HFCs have lower greenhouse gas effects than older refrigerants like chlorofluorocarbons and hydrochlorofluorocarbons.

The company completed in early 2020 a new facility for refrigeration lubricant raw materials in Mie prefecture, western Japan, to increase its production capacity by 50 percent to meet Asia’s growing demand for refrigeration lubricants.