GTS Chemical Holdings will invest at least 49 million ($7.8 million) to expand its annual lubricant production capacity in Liaocheng, China, by 30,000 metric tons per year.
The Shandong province-based company recently acquired 51,333 square meters of additional land for 19.2 million. As part of the purchase, GTS agreed with the government to invest 30 million in buildings and equipment, to begin construction by March 1, and to finish by Feb. 28, 2018.
The facility will produce Ogistar, Changyun and Qiaoke-branded engine oils and gear oils, GTS Chief Financial Officer Roy Su told Lube Report Asia.
There will be new facilities in the future to probably produce other products, but the first facility will be for lubes only, Su said, noting that GTS long-term investment plan is still under discussion.
While GTS main products are ammonium sulfite – which can be used in some lubricant applications, such as cold metalworking fluids – and other specialty chemicals, it began producing lubricants and recarburizers in 2013.
According to GTS, which is registered in the British Channel Islands and listed in the alternative investment market of the London Stock Exchange, its lube sales have almost tripled from 2013 to reach 138.6 million in 2014, accounting for about 20 percent of its total revenue.
GTS has 48 distributors throughout China. In September 2014, GTS also appointed one of Chinas largest business-to-consumer companies, JD.com, to be its online distributor for Ogistar lubes.