German lube marketer General Petroleum announced last week that it has opened a plant in the emirate of Sharjah with capacity to make 150,000 metric tons of lubricants per year. Based on estimates by industry analysts, the country already had capacity of approximately 1.25 million t/y – roughly 10 times the level of domestic demand.

We think the market clearly has room for more capacity, General Manager M.B. Menon told Lube Report. The U.A.E. has a good business environment and is well-positioned for exporting to other countries. And thats what will happen with much of our output.

The new facility is located in a former food oils processor in Sharjahs Hamriya Free Zone. General Petroleum declined to disclose the cost, but said it has storage capacity of 8,000 tons and five automated packaging lines.

Because it was used to process edible oils, all of the tanks are stainless steel, and there is no chance of contamination from rust, Menon said. I think it is the only lubricant plant like that in the region. It certainly is unusual.

General Petroleum has lubricants blended by a toll blender in Frankfurt, but this is the companys first wholly-owned blend plant. It plans to build another in Tanzania.

The Sharjah plant will make a full range of automotive and industrial lubricating oils but no greases, Menon said. Some will be marketed domestically, but a larger amount will be exported to Africa and the Asia-Pacific region.

The United Arab Emirates has long served as an export hub and transit stopover for goods traveling between Asia and Africa. Reliable estimates about lubricant export volumes are scarce, but industry observers say most of the volumes produced in country are exported, primarily to other parts of the Middle East, Africa and Asia.