Shell recently opened a new reconciliation plant in Tianjin, China, marking the company’s latest move in a series of investment activities in China’s growing huge lubricants market.
The factory's annual output of lubricants reaches 300,000 tons, which is Shell's second factory in Tianjin and the eighth factory in China. At the end of 2013, the company upgraded the Zhangpu plant to an annual output of 360,000 tons. The company's grease plant in Zhuhai was also put into production at the beginning of the year, with an annual output of 30,000 tons.
"We will continue to invest in upgrading and expanding our existing assets and are committed to building a solid lubricant supply chain here," a spokesman for Shell told reporters.
According to the Kline & Co. consulting firm, demand in the Asia Pacific region accounts for 43% of global demand, while China accounts for about 46% of the total in the Asia Pacific region. Kline expects China's compound annual growth rate of lubricants demand from 2013 to 2023, with consumer products at 6.1%, commercial transportation applications at 2.5%, and industrial applications at about 2%.
Shell is said to be China's leading overseas lubricant supplier with a market share of 12%.
In addition to factories in Tianjin and Zhangpu, Shell also has reconciliation plants in Beijing, Xianyang, Wuxi, Shanghai, Zhuhai, and Hong Kong. In addition to Zhuhai, Shell also has grease factories in the blending factories in Beijing and Wuxi.
The factories in Beijing, Wuxi, and Xianyang belong to Shell United (Beijing) Petrochemical Co., Ltd., which is a 75-25 joint venture between Shell and the Houshi Group. Shell is currently trying to sell the shares of the joint venture.
Shell said that it will continue to upgrade and expand China's lubricants plant, but the current focus is on the effectiveness of recent investments. The new Tianjin plant can be designed to increase annual production to 450,000 tons.
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