Ashland to Blend Neste Lubes

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Neste Oil on Nov. 21 signed a lubricant production agreement with Ashland Nederland B.V., a subsidiary of Ashland Inc., to produce Neste Oil lubricants when the companys Laajasalo plant in Helsinki closes at the end of 2008.

We believe that cooperation with Ashland will enhance the competitiveness of Neste Oil lubricants in the marketplace, said Vice President Esa Miettinen. Ashland has operations worldwide and a modern production facility at Dordrecht in the Netherlands that meets the quality and safety criteria we expect of our partners.

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Neste said it had discussed alternatives for continuing the production of its lubricants with a number of potential partners over the past three years.

Nestes agreement with Ashland covers the blending and packaging of all Neste Oil lubricants, Osmo Kammonen, Neste Oil senior vice president, corporate communications, told Lube Report. Ashland will not handle distribution of the lubricants, according to Kammonen.

He said the lubricants will be for oil retail customers in Finland, in the Baltic Rim area – Estonia, Latvia, Lithuania, Poland and Russia – and some additional FSU [Former Soviet Union] countries.

Ashland already produces its own Valvoline lubricants at the Dordrecht plant.

The city of Helsinki, Finland,rezoned thearea of Nestes current plant for housing and terminated the leases of companies operating there. On Aug. 29, Neste announced plans to close the Helsinki plant, which is on a site the company leased from the city through 2010. The company must cease operations a year earlier to allow time to demolish its building and perform any necessary clean-up.

Espoo, Finland-based Neste on Nov. 21 also completed the statutory employee consultation with production, storage, plant services, and product management personnel – 45 in all – at the Laajasalo site.

The company said a third of the 45 employees will transfer to the restructured lubricants organization or other positions within Neste Oil. About 10 employees will retire. Discussions are under way with the remainder on their future employment, said Neste, which aims to place them elsewhere within the company.

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