Fuchs Expands in Australia

Fuchs Petrolub SE announced it is expanding two production facilities in Australia, bucking the trend of rival lube and grease makers to move offshore.

Fuchs Lubricants Australasia said it is spending AUD $1.75 million (U.S. $1.36 million) to expand its grease plant in Melbourne, Victoria, to meet demand for locally developed products. This follows a $4.5 million expansion of that facility in 2013.

The group will also build a lubricants factory at Beresfield, near Newcastle in New South Wales state, to replace its plant in nearby Wickham. Fuchs said it has outgrown the Wickham plant, and it is scheduled to open the new facility in April 2017. Fuchs didn't say how much it is investing in the Beresfield plant, or what volume it will be capable of producing.

Fuchs was ranked fifth-largest player in the Australian lubricant market, which was valued at AUD $1.7 billion by market research group IBISWorld in a February 2015 report. That report said Fuchs held 5.9 percent of the Australian market.

Fuchs Lubricants Australia makes a range of engine, gear and hydraulic oils, coolants, grease and cleaning products. The company claims to make 95 percent of the products it sells in Australia and New Zealand at its Newcastle and Melbourne plants. In addition, the company has 15 distribution centers in the region.

On the grease front, Fuchs said it is one of only three companies making the product locally. It started making grease in its Melbourne facility in 2009 and has since doubled production.

The new developments have been an important investment, said Fuchs Lubricants Australasia Managing Director Wayne Hoiles, adding, We are literally at full capacity. He said the most recent investment included capacity and process upgrades as well as improved capability in its laboratories for research and development of products to meet the needs of local mining and steel-making clients.

The Australian dollar has fallen about 20 percent against the US dollar in the past 18 months, making it comparatively cheaper than it was to produce goods here.