Lub-rref announced that it will redirect most of the funds from its initial public stock offering to build a second waste oil rerefinery rather than upgrade existing facilities, including a rerefinery.
In an Aug. 25 filing on the Dhaka and Chittagong stock exchanges, the company said it was making the change because a recent change in Bangladesh law that requires rerefineries to be separated from facilities that produce finished lubes. Lub-rref’s existing refinery is located in Chattogram, Bangladesh, on the same site as the company’s lube blending plant.
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The company, which is headquartered in Chittagong, Bangladesh, had stated that it would use 980 million taka (U.S. 11.5 million) – two-thirds of the proceeds from the stock offering conducted early this year – to upgrade the Chattogram facilities so that production could increase. Now it intends to use those funds to build a new rerefinery at Julda, on the Karnaphuli River.
According to local news organization The Business Standard, the new plant will have capacity to turn used lubricants into 52,000 metric tons per year of API Group II base stocks. The Chattogram rerefinery makes Group I base stocks. The company aims to open the facility in 2024. In its stock exchange filings, Lub-rref said the construction project may require additional financing.
The company already owns the land on which the rerefinery will be built.
In addition to rerefining, Lub-rref markets finished lubricants under its BNO brand name. Previously the company said claimed that it currently holds 4-5% of the nation’s lube market but that it aimed to increase that share to 20%.
The stock exchange filings said that Lub-rref expects to use some of the base oil produced by the new rerefinery to make its own lubricants but that it will also sell some to other oil marketers. It said other volumes will be exported, earning the company valuable foreign exchange.
Lub-rref said it plans to build storage tanks at Julda beyond what the rerefinery requires and that the space will be rented to outside companies to provide an additional source of revenue.