LubesnGreases visited the plant, the first of its kind in Russia, during opening ceremonies in September. The event was attended by high-ranking company and local government officials such as Lukoil President Vagit Alekperov, RZD Senior Vice President Valentin Gapanovich and Volgograd oblast Governor Andrey Bocharov.

Russian Hopes

The Kremlin considers RZD one of the countrys strategic companies, an important part of the economy that plays a key role for Russias industry and transportation. In the ongoing standoff between Russia and the West over Ukraine, the Kremlins rulers want to make RZD less dependent on imported lubricants.

This alliance was created after a decision by Russian President Vladimir Putin, B.O. Ahrstrom, the companys first vice president, told LubesnGreases in October. I personally saw the document signed by the president that approves this enterprise.

The 1.36 billion ruble [U.S. $32 million], 30,000 metric ton per year grease plant is fully financed by Lukoil, said Oleg Mosin, the companys general director, during a press briefing in September in Volgograd. Lukoil supplied the plants equipment, engaged contractors and developed new grease formulations for the railway company.

The Intesmo joint venture project also has a positive environmental impact for Moscow. RZD ordered the plant in 2008 to replace the rail transporters own grease plant, the outdated Kuzaks facility in Moscow. The plant, which was a source of pollution in the capitals eastern suburbs, is now scheduled for demolition.

That plant opened in 1936 with the express purpose of supplying the ex-Soviet Union railways with domestically made greases, said Evgeny Shkolnikov, deputy of RZDs technical resources department. The transfer of intellectual property and formulations used for decades in Kuzaks gave our company a shareholder right in Intesmo, despite the fact that we didnt finance the project.

The railway company is the largest grease consumer in Russia, using about 13,000 tons of grease per year for its carriages and railway construction machines. In the long run, the company has pledged to buy up to 80 percent of the plants output. In the beginning, we expect at least one-third of Intesmos annual production to go toward meeting RZDs needs, while the rest is meant for use in the countrys automotive and industrial sector, Mosin said. Russia consumes about 60,000 tons of greases annually.

Inside the Plant

Construction of the 3,000 square meter plant began in 2010 on a 2.5-hectare plot. The facility is fully integrated with Lukoils Volgograd refinery infrastructure, including rail and road transportation, utilities and other services. It features railway and truck oil-loading piers and four large and six small tank storage units with total volume of 1,400 cubic meters. It employs 147 people, including many with experience working in Lukoils refinery.

The plant also has a storage building for finished products that occupies 1,200 square meters. A heated piping system ensures uninterrupted production during the winter months with their freezing outdoor temperatures, according to Intesmo. We installed three types of liquid pipe heating with a high temperature of 250 degrees C, medium of 150 degrees C and low of 60 degrees C, said Mosin.

Intesmos principal equipment design contractor is United States-based FMC Technologies. This plant is almost fully automatic and features a compact and modular design, Mosin said. It is energy efficient and has high productivity rates. All this guarantees the manufacture of high-quality products.

For example, the overall efficiency lets us cut maintenance cost by 25 percent, and product cost reduction is projected to be as much as 8 percent, he added. We estimate eight years to earn a return on our investment, but we will push hard to shorten this period.

Product Line

The product assortment is focused on supplying greases to the railway company; to Russias oil exploration, production and refining, energy and metallurgy industries; and for general consumption such as the automotive sector. We use six types of thickeners – lithium, lithium complex, calcium, calcium complex, aluminum and sodium, Mosin said. The plant features self-cleaning pipelines and automatically operated units for continuous production of high-volume products as well as batch production units that allow us to produce a wide assortment of products, he added.

The plant is equipped with five filling lines that can package finished products in a variety of forms – 200-liter barrels; 18-, 10- and 1-liter buckets; 1-liter and 500-milliliter cans; cartridges; and 100-ml tubes. Intesmo produces eight types of greases in three main categories under the Flex product brand: Polyflex greases for general use, Thermoflex greases for high-temperature applications and Greenflex biodegradable greases.

Intesmos goal is for its formulations to match those of imported Western brands, which account for almost one-third of the Russian grease market. A very important aspect of this project is competition with the imported brands, Mosin declared. We are confident that we can deliver analogues of the high-quality grease products imported into Russia by such companies as Fuchs, Total or Shell, and beat them out. To further this goal, the plant includes a modern lab and research and development center.

The companys management expects to garner at least 50 percent of Russias grease market and to grab a substantial share of neighboring markets as well. Initial targets for export are Kazakhstan, Belarus and the Baltic countries, as well as the railway companies of the Central Asia states.

After penetrating Russian and regional grease markets, the company plans to promote its products throughout Europe. Our Hamina blending plant in Finland and [recently acquired] OMV lube plant in Vienna have a few grease formulations in their product portfolios, and we want to rebrand them to start our European sales effort, Mosin revealed. He added that Intesmo aims to become an authoritative player in the European grease market by being present not only with quality products but also by engaging in research and development projects with European OEMs.