A year after forming a joint venture in Vietnam, Fuchs Petrolub SE has purchased land to build a finished lubricant factory in the country.
The company, which is headquartered in Mannheim, Germany, told Lube Report yesterday that it bought a 20,000 square meter plot and plans to invest €8 million (U.S. $8.6 million) to build the plant. The facility will make lubes for the automotive aftermarket, mining and the broader industrial segments.
The project was first reported by the local Kinhte Saigon news group. According to Kinhte, the property is in Ba Ria-Vung Tau province, on the southeast coast of Vietnam east of Ho Chi Minh City. The news group also reported that the plant will be designed for capacity to make 6,000 kiloliters of lubricants annually, or 5,400 metric tons.
The site is close to Cai Mep, a cluster of ports that handle 30% of the country’s export containers.
In January of 2021, Fuchs formed a joint venture with STD & S Co., an importer-exporter that is based in Ho Chi Minh City and has operations in several industries. Fuchs bought a 70% stake in the local company and therefore owns that much of the joint venture.
Fuchs and STD & S have cooperated for more than a decade to supply Fuchs lubricants in the country. At the time officials said they planned to use the joint venture to increase sales in Vietnam and also to supply into Cambodia, as STD & S does business there, too. They also said that the partnership had lubricant sales of €4.5 million in 2020.
Vietnam is viewed by many as an emerging economy with a lubricant market that has potential for significant growth. Some analysts estimate that the country’s lubricant consumption has grown in the range of 8%-10% in recent years.