Lubrizol Corp. said yesterday that it is moving ahead with a 10-year, $1 billion plan to upgrade operations and increase global additive capacity. The plan includes $200 million for a new wholly-owned plant in southern China, scheduled to break ground later this year.
Originally announced in March 2008, Lubrizols 10-year phased investment plan was placed on hold last year due to the global recession. Worldwide additive demand recovered significantly in the second half of 2009, the company said, and should return to normal levels of 1 percent to 2 percent annual growth by 2011 or 2012. Lubrizol, based in Wickliffe, Ohio, said its investment is needed to keep pace with demand and to provide supply reliability for global additive customers.
The centerpiece of the plan is a new manufacturing plant to be built in the Zhuhai Gaolan Port Economic Zone. Lubrizol has signed a letter of intent to reserve land use rights, and expects to start construction in late 2010. Selection of the Zhuhai site marks a change from the earlier 10-year plan, Lubrizol confirmed to Lube Report. Zhuhai, on the South China coast, offers better access to shipping and other transportation channels for exporting products throughout Asia.
Lubrizol declined to identify the specific initial products to be produced at the new plant; production will be phased in to meet market demand, and eventually the plant is expected to produce driveline, industrial and fuel additives, the company said.
The new Chinese plant will complement Lubrizols existing joint venture with PetroChina, the Lanzhou Lubrizol Lanlian Additive Co., which focuses solely on manufacturing engine oil additives for the Chinese market.
In addition to the new China plant, Lubrizol will focus significant resources on debottlenecking projects and infrastructure improvements, particularly for its manufacturing plants in Texas and France. These facilities, Lubrizol noted, will see new equipment and capabilities to support new additive components, as well as process and automation improvements and advances in health, safety, environmental and security performance.
The 10-year plan, whose clock was reset to begin in January 2010, does not include any rationalizations or plant closures.
Lubrizol Additives President Dan Sheets said, Over the past five years we have stated that we would improve our financial returns in order to justify reinvesting in the business. By making these extensive investments, we are keeping our commitment to customers and ensuring that we continue to be the most reliable supplier.