Idemitsu Kosan on Thursday announced plans to invest $13.5 million next year to more than double its finished lubricants production capacity in Indonesia to meet an expected increase in demand for high-performance lubricants and oils for motorcycles.
According to the announcement, the Idemitsu Lube Techno Indonesia subsidiary plans to expand its annual blending plant capacity to 65,000 kiloliters (about 57,200 metric tons or 400,000 barrels) in October 2010 from its current 25,000 kiloliters. The subsidiary is in Karawan Industrial Park in the West Java Province of Indonesia.
With the increased production capacity expected to strengthen its supply system in Indonesia, Idemitsu said it plans to sell 63,000 kiloliters of lubricants there in 2015. The company said it sold about 330,000 kiloliters of lubricants worldwide in fiscal 2008.
Idemitsu Lube Indonesia was established in Karawang in 2004 as a lubricants trading company specializing in automotive, mining/heavy machine and industrial/marine lubricants. With support From Tokyo-based Idemitsu Kosan, Idemitsu Lube Techno Indonesia started in November 2005 with a focus on manufacturing and distributing lubricating oils. The subsidiarys offerings include automotive, industrial and marine lubricants, along with transformer oils.
Little Falls, N.J.-based consultancy Kline and Co., in its study Competitive Intelligence for the Global Lubricants Industry, estimated the Indonesian finished lubes market at about 600 kilotons in 2007, accounting for almost U.S. $1.2 billion. Pertamina, the national oil company, had about50 percentof the Indonesian finished lubes market, according to Kline, and other active players included BP, Shell, Top One, Federal Oil, WGI, ExxonMobil and Fuchs.
Geeta Agashe, Klines vice president of petroleum and energy, noted that a lot of Japanese OEMs are involved in the Indonesian automotive market, including Honda, Toyota, Isuzu, Daihatsu and Nissan. In motorcycles, Japan’s Honda, Yamaha, Suzuki and Kawasaki dominate. Our speculation is that Idemitsu is the first-fill/factory-fill supplier to some of these Japanese OEMs and hence perhaps their interest in increasing their capacity in Indonesia, Agashe told Lube Report.