The Rise and Stumble of Richful

At the same time, the company rolled out a solid program of investment into R&D, manufacturing capacity and human resources. 

Richful’s sights were then set beyond China, and the company established an overseas headquarters in Singapore, opened a U.S. subsidiary and an office in Europe, expanded across Asia and the Middle East, signed a distribution agreement covering Mexico, the Caribbean and Central America and announced plans to build Saudi Arabia’s first full-scale lubricant additive factory. 

As the company grew, so did its cadre of foreign hires, drawn from a pool of top-tier industry talent who brought with them years of accumulated expertise. 

“I’ve been really impressed with them, ” Mike McCabe, an industry consultant and formerly of Lubrizol, told Lubes’n’Greases. “They’ve been hiring people who understand technology and understand the importance of testing and qualifying product.” 

Then, in June 2026, the wheels began to wobble when the European Commission designated Richful as an entity supporting Russia’s military and industrial complex. Its assets held in European Union member states were frozen and European individuals and companies were prohibited from engaging in financial transactions, joint ventures or commercial partnerships with the company.  

According to the Council of the European Union, Richful had supplied chemical additives used in lubricants for Russian military equipment. The listing placed the company alongside Chinese drone suppliers targeted under the same sanctions package. 

Richful forcefully rejected the allegations and said it had never supplied the military or acquired the qualifications to do so and that all products were intended solely for civilian lubricant applications. It also said it had voluntarily terminated its Russian business, implemented export-control compliance programs and was working with China’s Ministry of Commerce to challenge the sanctions.  

For a business whose growth had become synonymous with China’s increasingly sophisticated lubricant additives industry, the designation has sullied the company’s reputation. 

From Small Acorns 

Founded in 1996 in Xinxiang, Henan Province, Richful’s rise mirrored China becoming the world’s largest lubricant market, consuming roughly 7.6 billion to 7.7 billion liters (6.8 million to 6.9 million metric tons) of finished lubricants per year. Its growth strategy distinguished Richful from many emerging Chinese competitors and knocked on the doors of some of the industry’s established leaders with an expectation that one day there might be a seat at the top table. Richful said it intended to compete through competitive pricing, local technical support and expanding production capacity as it sought to increase market share. 

Heavy investment supported those ambitions. The company expanded manufacturing in Xinxiang and Cangzhou to more than 200,000 tons of annual capacity, producing more than 200 products. New projects added 60,000 tons of component capacity and 12,800 tons per year of additive package production while plant upgrades shifted output toward higher-value finished packages rather than individual components. Research focused on increasingly demanding lubricant technologies, including low-viscosity engine oils, engine oil formulations low in sulfated ash, phosphorus and sulfur, extended-drain lubricants, China VI and Euro VI engine oils, gas engine lubricants and marine applications.  

“Think of some of other adcos at that level that don’t seem to embrace testing — they’re producing products that they say should do something, ‘Go test it yourselves,’ ” McCabe said.  

Figure 1. Richful’s Growth 2021-2025 (Millions of yuan)

What had once been a relatively obscure lubricant additive producer was now operating globally through new distribution partnerships. The expansion showed few signs of slowing. In Latin America, Richful appointed Basicos y Aditivos S.A. de C.V., or BAISA, as its exclusive distributor for Mexico, the Caribbean and Central America, giving the company direct access to markets that had traditionally relied on Western additive suppliers.  

Another milestone came in Saudi Arabia. Richful and Farabi Petrochemicals agreed to build what Farabi described as the kingdom’s first full-fledged lubricant additive factory in Yanbu. The planned facility would manufacture additive components including detergents, dispersants, zinc dialkyldithiophosphates and antioxidants, together with complete additive packages for Saudi Arabia’s lubricant market. The location, near a Saudi Aramco refinery and Luberef base oil plant, would provide ready access to raw materials. 

Filling the Void 

China’s lubricant additives demand has evolved over the past decade, driven by numerous factors, not least of which is the rapid rise of electric vehicle registrations. In 2024, EVs captured a market share of more than 50% of new passenger vehicles. In the same year, the country became a net exporter of additives, and Richful was there to take advantage. 

Another step up was filling the gap left by long-established Western suppliers, including the Big Four, all Western companies that exited Russia in compliance with economic sanctions imposed on the country after its invasion of Ukraine in 2022. This left Russian lubricant manufacturers searching for replacement additive suppliers. 

Richful emerged as one of the biggest beneficiaries. According to the Center for Intelligence and Research Analysis, which cited government documents showing the company shipped approximately 36,000 tons of additives to Russia between April 2023 and April 2024. CIRA also reported that Richful shipped roughly 47,000 tons to Russia during 2022, exceeding the country’s estimated prewar domestic lubricant additive production of about 45,000 tons annually.  

Richful’s gross profit began to swell, nearly tripling between 2021 and 2022 and continued growing into 2025. 

According to Richful, sales to Europe represented only about 4% of its 2025 revenue, limiting the sanctions’ financial impact. It acknowledged, though, the potential for longer-term reputational damage and export restrictions. 

China is not a signatory to sanctions on Russia, and its companies are not barred from dealings with military or civilian customers. It is only restricted from doing business in Europe.  

In a statement to the Shenzen Stock Exchange in June, the company maintained it has always complied with international trade laws.
It also said its products are for civilian use and adhere to civilian standards, that it has no military production capacity and no involvement in military R&D or trade. It is “fundamentally incapable of supplying the Russian military.”  

The European Union has identified lubricants and additives as critical dual-use goods because they can be used in civilian as well as military applications. Militaries the world over keep cross-reference indexes that allow them to substitute military-grade lubricants with high-end civilian equivalents. Russia’s GOST tables serve this function. 

In the same statement, Richful said it had “proactively terminated” its business with Russia before it was sanctioned. There was no indication of when that process began. 

Cracks Appearing 

Before the sanctions, signs of pressure were emerging. For the first quarter of 2026, Richful reported that net profit attributable to shareholders fell 28% year on year to ¥139.92 million despite revenue increasing 3% to ¥876.50 million. The company attributed the weaker earnings to higher selling, research and development and financing expenses, along with foreign exchange losses linked to movements in the yuan and increased borrowing costs. 

Major shareholder Sinopec Group Capital announced plans to reduce its holding for the third time in a year. The proposed sale would lower its ownership from 11.18% to about 10.20%, following two earlier stake reductions dating back to mid-2025. Richful said the transaction reflected the investor’s funding arrangements and would not affect control of the company or its operations. 

The EU measures introduce risks extending beyond Europe itself, including increased scrutiny from multinational oil companies, potential banking and financing complications, pressure on distributors serving European markets and reputational damage in export markets. 

Richful’s shares fell 6% on the Shenzhen Stock Exchange after the European Commission announced sanctions on June 16, 2026. The sanctions also triggered the company’s removal from major global equity indexes. FTSE Russell removed Richful from its Global Equity Index Series shortly after, as did the MSCI China Indexes and the Solactive Equity Index on July 3. The deletions forced passive investment funds to sell their holdings, limiting any recovery in the share price. 

It’s possible the incident will lead Richful to deepen its focus on China’s domestic market and regions less affected by Western sanctions. McCabe suggested the sanctions could disrupt the company’s expansion strategy.

“They seem to be doing the right things in terms of how they’re approaching the market,” McCabe said. “They seem to be committed to generating data, so in that sense it’s a shame to lose a company that was acting in the right way.”

Richful’s story illustrates China’s determination to build a globally competitive lubricant additive industry capable of challenging decades of dominance by Western suppliers. But its confrontation with geopolitics leaves the future in Europe of one of China’s most ambitious lubricant additive companies somewhat in the balance. Whether the sanctions ultimately derail Richful’s international ambitions remains uncertain. The company says it in discussions.

Simon johns is a Lubes’n’Greases managing editor. Contact him at Simon@LubesnGreases.com.