Lubrizol Paces Progress


Lubrizol Corp. yesterday announced a 10-year phased investment plan to upgrade and increase global capacity in its additive business, geared to an estimated 1 percent annual growth in global additives demand. The company plans extensive debottlenecking at its existing facilities and a greenfield investment in China that together will require a $200 million investment over the next decade.

The investment is in addition to the Lubrizol Additive segments continued reinvestment in its existing operations and environmental compliance at roughly the rate of depreciation.

As part of its plan, Wickliffe, Ohio-based Lubrizol has signed a letter of intent to reserve land use rights for a manufacturing site in the Tianjin Harbour Industrial Park, China. It will serve as the location of a wholly owned Lubrizol manufacturing facility, which the company will develop and phase in as market needs require.

The company said it is increasing investments to keep pace with the 1 percent per year predicted annual growth in global additive demand and to ensure security of future supply. Officials emphasized the importance of adding in new capacity over time.

The overall market is expected to grow, depending on the study, a half to one and a half percent, Tony Shick, Lubrizol general manager of Asia joint ventures, told Lube Report. That is the global demand over a 10-year period, and that is not necessarily saying what our growth is anticipated to be. We dont want to get over-invested in capacity that we feel we would have to sell.

Lubrizol spokeswoman Julie Young told Lube Report the debottlenecking involves improvements to selective processes at Lubrizol facilities in the United States in Bayport and Deer Park, Texas, and in Painesville, Ohio; and in France in Rouen and LeHavre.

Shick said that while the debottlenecking does not involve building new facilities, the investment plan can adapt to market changes. The new facilities, as far as new construction, will be limited to the facility in China, he said. But the plan is flexible, as part of the phasing and staging. Depending on what happens to market demand, and depending on what happens to raw materials regionally, that could change.

He said the company sees growth in fuels and in engine oils as the main volume growth drivers over the next 10 years.

Shick and Young emphasized the plan is not a shift towards moving activity out of North America to China. Theres enough growth in the world that we believe the expansions will be necessary in the Americas and in Europe, as will the new site in Asia, Shick said.

We will invest over a billion dollars in the next decade to ensure we continue as the most reliable supplier to the fuels and lubricants industry, Lubrizol Additives President Steve Kirk said.

The Tianjin site is in phase three of the industrial park development plant and will be ready for construction in late 2009. The wholly owned capabilities will eventually include driveline and industrial additives blending, marine additives for export and a technical service laboratory.

The new site is also expected to accommodate the relocation of the Tianjin Branch plant of the Lanzhou Lubrizol Lanlian Additive Co. Ltd. engine oil additive joint venture, which must be moved from its current location in Tianjin Tanggu due to a change in zoning.

By sharing the site with the joint venture, Lubrizol said it believes both parties will achieve cost saving synergies, and that the joint venture will benefit from doing more business with Lubrizol.

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