Despite Outcries, Lube Plant to Move


Russian authorities went ahead with plans to move a Moscow-based specialty lubricants plant, despite protests by industry sources and marketers that it could harm some industrial sectors and hike specialty prices.

State-owned Moscow Neftemaslozavod (MNMZ) is excluded from the proposed federal properties privatization agenda planned for 2014-2016, according to a Dec. 9 government decree published on the Russian governments website.

The decree states that in correspondence with the Russian president and central government orders to ensure realization of construction of the Yaroslavsky railway transfer station, it is necessary to hand over 100 percent of the shares of the federally owned Moscow Neftemaslozavod to the possession of the city of Moscow.

Further, the directive implies that after the ownership transfer is done, Moscow city authorities will move the specialty lubricants plant to another site. This will prepare a plain field [now occupied by the plant] for development of the Yaroslavsky railway transfer juncture.

The authorities believe that relocation would improve the transport situation in that part of the little ring railway which encircles the center of Moscow, and would bring positive impact to the environment.

Located in the industrial zone Severyanin near prospekt Mira, one of the main city avenues that lead to the Moscow center, MNMZ is one of the states two preferred lubricant suppliers for the country’s rocket, air force, navy and aerospace industries, according to people knowledgeable in the matter. The plant produces mineral and synthetic specialty oils such as aviation, hydraulic, motor, industrial and multipurpose. It also produces antifriction, preservation and tightening greases, as well as waxes and pastes.

Nefteprodukt is the other plant, and it is also located in Moscow.

The MNMZ plant relocation could take approximately five years and could cost from U.S. $50 million to $100 million, according to industry people. They said that the long term relocation and subsequent building of the plant could lead to a specialty lubricants supply shortage in Russia, which could cause a hike in prices for such lubricants.

Some of these industries in Russia supplied by MNMZ receive a special status as industries of national interest. Usually, they are related to power generation, defense or the aerospace sector, and no other domestic or foreign producer can obtain the governments approval to supply them, according to industry people familiar with the matter. For example, MNMZs major customer is the defense ministry.

For more details about the Moscow specialty plants planned move, see theApril 10 Lube Report article.

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