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A Rising Sun in Alabama


CHILDERSBURG, Ala. – To understand what attracted Japanese oil giant Nippon Oil Corp. to an unassuming tract of land in this small rural town near Birmingham, you only need to notice the rail line that runs right by the storage tanks outside the lubricant and grease manufacturing plant.

We bring base oils in from Canada and from all over the United States, said John Newman, executive vice president and plant manager for Nippon Oil Lubricants (America) LLC. From the West Coast, the Gulf or Canada, all rail seems to pass in some way through Birmingham. The companys neighbor, a Bowater paper mill, moves about 100 rail cars a day, he added. So youre not in a no-mans land where you have to wait for a train to deliver your product, Newman said.

The plants location also provides rapid access to specialty additives. We have 15 additive tanks inside the building, containing additives from all over the world – including Italy, Germany, Belgium, Japan and the U.S., he added.

NOLA, established in June 2005 and 100 percent owned by Nippon Oil (U.S.A.) Ltd., completed construction of this facility in August 2006, beginning commercial production two months later.

The 10-acre facility – including paving, tanks and the main plant building – occupies a 20-acre tract owned by NOLA, within a 2,300-acre business park owned by the City of Childersburg. The plant currently has 30 employees on site, including five who are Japanese.

Here, NOLA puts out product to the tune of about 10 million gallons per year of lubricants and 1.75 million pounds of grease. Our products include automotive engine lubricants, for both cars and motorcycles, Newman said. Using dedicated lines and tanks, the plants manufacturing flow is designed to make factory-fill and genuine oils for original equipment manufacturers – especially Asian-badged auto plants in the U.S. Southeast.

NOLA also produces fluids for automatic and continuously variable transmissions (ATF and CVTF), power steering fluids, transmission and differential oils, and shock-absorber fluids. We also make high-tech greases – greases put in CVJs [constant velocity joints], bearings, electrical wiring and so on. As yet, the plant does not make industrial lubricants, however. We do a pass-through from Japan with the specialty hydraulic fluids and metalworking fluids they supply, Newman explained.

Key factors attracting the company to this location included transportation access, and the opening of numerous Asian automobile manufacturing plants in the region. In Alabama alone, Honda and Hyundai operate automobile manufacturing facilities in Lincoln and Montgomery, while Toyota operates a plant in Huntsville that builds V-6 and V-8 engines for its pickup trucks. In March, Hyundai announced plans to build a second engine plant in Montgomery.

Up until the starting of this plant, Nippon Oils recipes were going into many Asian domestic U.S. car companies as factory-fill product, doing that through contract blenders, Newman said. Because of the transportation cost of bringing product from the northern part of the U.S. to the southern part, it was just a smart business decision to build this facility here.

The plant also served to spearhead the entry of its parent company into North America. While Nippon Oil and its Eneos brand of fuels and lubricants are market leaders on their home turf – its Japans largest base oil refiner and ranks ninth worldwide in lubricants sales, according to LubesnGreases sources – the company was a relative latecomer to the U.S. market. By putting a foot firmly on the ground, it signaled to both its customers and the rest of the world that it was intending to stay.

U.S. Market

Nippon Oil Corp. launched its Eneos brand engine oils in the United States last year, and has developed a distribution network on the West Coast. In July, Nippon Oil (USA) announced Chrysan Industries of Plymouth, Mich., would serve as master distributor for the Eneos brand in the eastern U.S.

Steve Matsumura, the Torrance, Calif.-based lubricants coordinator for Nippon Oil (USA), said that for the time being the company will continue to import oil made in Japan for the Eneos line of fully synthetic motor oils.

In the future, if we grow the business here in the U.S. and we have some success, then we should produce it here, he said during LubesnGreases visit to the plant. Right now, were still developing the Eneos brand here. Were looking for partners to carry our brands. There are enough advances that we can produce here [in Childersburg] when the time comes.

While there are no current plans to build a second U.S. plant, company officials said the market will dictate the pace of expansion. If demand calls for it, anything is possible, said Tim Wang, lubricant sales manager for Nippon Oil (USA), also from Torrance. Right now for us, really the skys the limit. We have a huge U.S. market, and definitely the company is willing to consider anything as long as they see the benefit of it.

Looking Up

The Childersburg plant currently manufactures about 15,000 to 16,000 gallons of product at a time, and ships out truckloads averaging 6,000 to 7,000 gallons each. Jason Edwards, lubricants production supervisor, pointed to some of the plants features – such as overhead loading arms – that keep the trucks rolling. There are four transfer lines, three for lubes and one for grease.

We have a weight-control system, he explained. Whereas most people fill from the bottom of the truck through a flow meter, we fill from the top. We enter the amount of pounds that we need to feed into the truck, and the [programmable controller] will automatically stop the pump and prompt you to pig. A pig is a snug-fitting device that moves through the inside of a pipeline for cleaning. Made of urethane, its very much like a squeegee that goes inside a pipe.

As the product is coming into the truck, when the scale is satisfied, it automatically stops the pump. The pig resides here, and forces the product back into the holding tank so theres no waste.

The arms are connected to a slop tank, Edwards went on, so that after were done loading the truck, the arms are moved over, and any residual oils that remain inside the pipes drip into that tank.

Newman noted that the exterior tanks were designed with secondary containment in mind to meet Environmental Protection Agency and Alabama Department of Environmental Management regulations. Weve tried to eliminate any cross-contamination, Newman said. Weve gone to a little extra work to make sure of that when were offloading a rail car. We have three offloading stations going into 12 tanks, so cross-contamination is very important to us, he explained. We have also tried to reduce safety hazards as much as possible, and any environmental issue.

He calls the plant semi-automated. There are a lot of electronics in it, he said. Path protocols are set through the computer to make sure there are no mishaps putting products into a tank. Meters help ensure the accuracy of incoming volumes as well as the accuracy of blends.

One of the reasons this facility was designed the way it was is that well bring in pure additives and additive packages – the blending of those is critical, he said. So weve gone to the extra step to make sure we get exactly what we need when we need it.

Quality control and frequent testing are also essential. In June NOLA became ISO-9001 certified, pointed out Sonya Reynolds, quality control supervisor, and it expects to achieve ISO-14000 in March. Precautions in the lab include strict labeling of samples and work areas, along with centralized cleaning. Eliminating and controlling contamination is something were very conscious of, she said.

The facilitys grease plant, which features a four-metric-ton reaction kettle and Stratco contactor, does about two to three production runs per week. A clean room ensures the purity of grease for specific applications. One of the keys for us is that youre not going to find any grease drips – if they occur, theyll be cleaned up immediately, said Kevin Hurst, grease production supervisor at the plant.

Worker safety is critical. Visitors to the plant notice its cleanliness, along with careful organization. The company is implementing a visual factory scheme that uses color codes on pillars and walls to make it easy to find and be aware of important items and areas at a glance.

For example, a red pole flags the location of a fire extinguisher while a purple pole indicates a telephone. The site recently marked going more than two years without a lost-time injury, and had only two first-aid cases in all that time.

The Japanese Way

Newman has worked for Japanese companies directly for 12 years, and with Japanese customers since the early 1980s. You learn the dedication to quality and to the customer, and the customer impacts, he said. This is what we drive home here, thats our goal.

Excellence was the watchword when the plant was set up, he added. Thats excellence in the way we process our products, and the results we get from it. The quality of the product is of the utmost importance and blend accuracy is monitored on a daily basis; first-time blend accuracy is what it is all about.

Surprisingly, most of the plants workers come from outside the lubricants industry. Heres a group of people who have never worked in the oil industry before, and never worked with this equipment, and theyve done an awesome job, Newman said. The company largely hired locally for the plant. We came into the state, and we called Alabama Industrial Development Training, he explained. They were the ones who did some of the preliminary interviews. All our associates are local, within about a 10-mile driving distance.

Employees came from a variety of backgrounds. Newman himself has more than 30 years experience in the automotive industry, while grease supervisor Hurst hails from the printing industry. Kevin has a strong maintenance background and knows electronics, Newman said. Because he has not grown up in the business, hes had to come at it with a different eye, a different vision. We come at it looking at a mature market, a mature industry, and bringing different experiences.

Newman feels it can be valuable to bring someone in who is new to the lubricants and grease industry. Someone who grows up in it accepts things as they are; we dont accept things as they are, he said.

One of the things that I caution these guys on daily is, Dont ever stop working towards being better.

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