China is the lubricant industrys new frontier, and D.A. Stuart Co. is expanding there by tying up with a maker of cutting edges. The American industrial lube supplier announced last week that it has formed a joint venture with Shanghai Razor Blade Co.
Stuart, which is based in Warrenville, Ill., will be responsible for the entire capital investment for the joint venture – $6 million that will be used to build a blending plant in a Shanghai suburb, breaking ground early next year. The company did not disclose the capacity of the facility but described it as a multi-phase project, with two expansions already planned in the next few years.
D.A. Stuart Co. (Shanghai) will make rolling oils and metalworking fluids and will also serve as headquarters for Stuarts business throughout Asia. The company already has some sales in China but to date has handled them from the United States.
Shanghai Razor Blade is a large manufacturer of consumer goods and has a decade-old joint venture with Stuarts parent company – Wil. Werhahn KG, of Neuss, Germany. That partnership makes Zwilling kitchenware. Stuart officials said Shanghai Razor Blade will aid the joint venture through its experience with the Chinese government, its knowledge of local business practices and its presence in the market.
Steady growth the past few years has made China the second-largest lubricant market in the world, at nearly 4 million metric tons in 2002. Stuart officials said it was the opportunity presented by that growth that drew them into the joint venture.
The Chinese steel and metalworking markets will continue to grow due to the general economic uplift in Asia and increased production demands from the Chinese automotive and manufacturing sectors, President and Chief Executive Officer Val Anthony Pakis said in an Oct. 13 news release. He added that the joint venture will be able to respond quickly to more opportunities in what is quickly becoming the largest and most influential global manufacturing base.