Japan's Idemitsu Kosan Co. began construction of a lubricant blending plant in Huizhou, Guangdong province, China, the company announced Wednesday.
With this opening of its second plant in China, with an annual production capacity of [108,000 metric tons per year], Idemitsu aims to secure a stable supply of lubricants to handle sales that continue to grow from year to year, said the company in a press release.
Currently, there are no concrete plans to export [lubricants from this plant], but we may take that into consideration when we want to optimize our global supply chain, a company representative told Lube Report.
The new plant is managed by its wholly-owned subsidiary, Huizhou Idemitsu Lube Co. and is expected to begin commercial production in in April of next year. The plant is built on 100,000 square meters of land and will produce automotive lubricants, transmission oils, industrial lubricants and other products.
Demand for lubricants continues to increase in China, already the world's largest lubricant market, the company said in the press release. Solid growth is projected for the future as well.
In 2004, Idemitsu set up its first lubricant plant in China managed by its subsidiary, Idemitsu Lube [China] Co. The company has since established subsidiaries in major cities like Shanghai, Guangzhou, Changchun, Beijing and Chongqing to strengthen its marketing network.
In October last year, the company also opened a research and development center in Shanghai to develop products which meet the needs of its customers like Japanese automotive producers in China.
To further expand its markets in Asia, Idemitsu set up a company in the Philippines in October last year. We will announce details when the company starts operations, the company representative said.
In Idemitsus 2018 fiscal year, total lubricants sales volume increased 3.1 percent to 1.14 million metric tons. The company expects sales to increase to 1.17 million tons for fiscal 2019 and to 1.35 million tons the following year.
Idemitsu and Showa Shell Sekiyu K.K. merged in April to become the second-largest lubricant supplier in Japan. The new company is called Idemitsu Kosan Co., but business will be conducted under the trade name of Idemitsu Showa Shell.