After opening its first overseas facility in Vietnam in October to supply clients in Southeast Asia, metalworking fluids maker Dongguan Amer Lubricant Technology Co. will invest over 300 million (U.S. $43.3 million) to build a new blending plant in the port of Humen, in Dongguan, Guangdong province.
The facility will have capacity to produce approximately 200,000 metric tons per year of industrial lubes including chain oils, cutting oils and anti-rust oils, and will have capacity to store over 50,000 tons of base oils.
Construction of the facility is expected to be completed in the first half of 2018.
The Humen facility will mainly supply the market in southern China. Our capacity has to keep up with the increasing demand in the region, Amer president Wang Xiaolong told Lube Report Asia, adding that the current facility, located in the Song Shan Lake technology park, will be turned into a research center. Proximity to the port will allow it to partner with international companies as well, he said, such as original equipment manufacturers.
Wang said Amers products are very well received in southern China and eastern China, the two most prominent regions for the countrys light industry, such as the manufacturing of textiles, electronics and appliances. Many of Amers clients, for example, are electronics manufacturers.
However, sales are slow in northern China, which is dominated by manufacturers in heavy industries, such as automobile production and shipbuilding. Increased competition in Chinas heavy industry has led to oversupply in some instances.
With the Humen facility and Amers new research center, Wang said he expects to churn out high quality products to win over new clients who use imported lubes to maintain costly machines.
Its understandable that clients are cautious about changing oils as the equipment is very expensive, Wang said. We dont ask them to change oils, but ask them to try our samples for free. We know it takes time to win their trust.