Less than two years after opening its first blending plant in Jamaica, Lubricating Specialties Co. is continuing its expansion in the Caribbean island through an agreement to operate another plant near the capital city, Kingston.
LSC Jamaica Ltd., a subsidiary of the Pico Rivera, California-based manufacturer, signed a long-term lease agreement for an undisclosed price with Rubis Energy Jamaica for a blending plant located at Rubis fuel and chemical terminal in Rockfort. Rubis will not be involved in the operation of the facility, which belonged to oil giant Shell before it ceased manufacturing in Jamaica around 10 years ago.
The blending plant will have capacity to produce approximately 15 million gallons per year of passenger car motor oils, heavy-duty diesel engine oils, automatic transmission fluids, hydraulic fluids, gear oils and other industrial lubricants, to be sold under local and international brands, LSC President and CEO Sydney Thwaites said. He added that the facility will be ready to receive raw materials by vessel in the first quarter of 2017 and will begin blending and packaging in the second quarter.
Because of its proximity to the Kingston port, the Rockfort facility offers LSC cost-effective access to raw materials and a direct route for exports, Thwaites said. This will also benefit LSCs first lube blending plant, which is in May Pen, Clarendon parish.
The May Pen facility was the quickest way for us to enter the market, but our strategy was always to expand our presence by having water access and a facility more suited for exporting, Thwaites explained.
LSC Jamaicas May Pen plant started operating in March 2015 with capacity to produce 5 million gallons per year of automotive and industrial lubricants, including products under license from Top 1 Oil Products Company. We will continue to operate May Pen as it is ideally located to support certain industrial customers.May Pen will be supplied with raw materials from the Rockfort facility, reducing the raw material cost there as well, said Thwaites.
He added that Jamaicas logistical advantage and available infrastructure for lube production made it appealing for LSC to continue investing in the country and supplying lubricants to markets in the Caribbean and Latin America.
Jamaica has one of the larger local economies in the Caribbean and is ideally located to supply the rest of the Caribbean and Central American region. The fact that there were existing facilities available reduced the cost and time of entry, Thwaites said. He added that being from Jamaica has given him a local network and understanding of how to conduct business in the island.
LSC Jamaica is currently the only lubricant manufacturer in the country. In July, Allegheny Petroleum and distributor partner Paramount Trading Jamaica Ltd. announced plans to build a 7,500 metric tons per year blending plant in Kingston, with commissioning expected at the start of 2017.