Oronite Inks Entry to China

Chevron Oronite announced last week that it will build an additive manufacturing plant in Ningbo, Zhejiang Province, by 2019, in a move designed to strengthen its foothold in Asia.

In a deal with the Ningbo Economic & Technical Development Zone, United States-based oil giant Chevron Corp.s fuels and lubricants additives arm will invest an undisclosed amount to develop the facility.

Oronite expects to stream initial capacity in 2019, and to continue developing in phases based on market demand thereafter. The company will adjust its construction schedule according to needs of local and global demand, Chevron Oronites Vice President of Sales and Marketing Jirong Xiao told Lube Report Asia. If demand grows more rapidly than expected, Oronite will finish the plant sooner.

"We are looking at the long-term investment, for the next five to 30 years. Our largest additives manufacturing facility in Asia is Singapore, but in due time, we will eventually use up our capabilities in Singapore [as demand from Asia grows]."

With the completion of a major expansion at our additives manufacturing facility in Singapore in 2014 and a project currently underway to add carboxylate capacity at the Singapore facility, we are currently well positioned to meet our supply needs throughout Asia, including the escalating demand in China, said Oronite President Desmond King in a statement last week.

While our Singapore plant is the largest additives manufacturing facility in the region, we also anticipate that additive demand will continue to grow in China and that new capacity will eventually be required, King continued. Adding a new supply point in China by the end of this decade will provide [us with] even greater flexibility....

Unlike the Singapore plant, where most of it is for export to the region and the world, China is a major growing market and we anticipate a lot of products will be consumed locally, Xiao said. Asia-Pacific is the largest region for lubricants and additives, and the majority of the demand will come from Asia in the next few decades. With the need for higher quality lubricants, [such as the ones required by] SAE Internationals recently introduced SAE 8 and SAE 12 grades, there will be a need for more additives.

The targeted site is near the Port of Ningbo-Zhoushan, which is widely considered the worlds largest in terms of annual cargo volume. The location provides Oronite with advantages both in terms of distributing our products throughout China, as well as connecting to our other manufacturing facilities around the world due to its location near a major port, King said, adding that the site is part of Chevrons long-term plan to establish a manufacturing presence in China.

Oronite is based in San Ramon, Calif., United States, and has regional headquarters in Houston, Paris and Singapore.