(EnergyAsia, July 12 2013, Friday) — Two years after it began construction, Sinopec, China’s largest integrated energy and chemical group, has started up a large lubricants plant in Singapore, the first outside its home base, as it prepares for global expansion.

Located on a 242,811-sq m site in Tuas on the southwestern tip of the island, the plant has an initial annual capacity to produce 80,000 tonnes of lubricants and 20,000 tonnes of grease. The facility will also operate as Sinopec’s regional services and logistics hub to better serve the needs of its customers in Southeast Asia, Australia and New Zealand as well as spearhead the company’s expansion into the global lubricants market.

The plant was opened on July 11 Thursday by Pei Wenjun, general manager for Sinopec Lubricant (Singapore) Pte Ltd, at a ceremony attended by customers, employees and officials representing the Singapore government and the Chinese embassy in Singapore.

According to Mr Pei, the new plant will use one of the world’s leading lubricant production equipment and processing technology, 90% of which are proprietary to Sinopec.

The plant forms part of Sinopec’s growth strategy as it develops inhouse capabilities to make low-carbon high-value products for the world markets. The strategy calls for the company to focus on first developing markets in the Asia Pacific region, to be followed by building a chain of lubricant plants around the world and establishing a strong international sales network.

“The Sinopec Lubricant brand has become the face that most people in the energy market would associate companies under the Sinopec group with. So we are using this brand to spearhead the establishment of the Sinopec name internationally,” said Mr Pei.

“The completion of the Singapore plant will further increase our visibility and influence around the world, besides helping to greatly enhance the international competitiveness of other Chinese lubricant brands in general.”

As an example, it cites the rapid growth of subsidiary brand Sinopec Great Wall Lubricant in over 50 countries through the efforts of representative offices in the Middle East, Latin America, Australia, Africa and Southeast Asia.

General Manager Song Yun Chang said:

“As China’s leading lubricant brand, Sinopec Great Wall Lubricant has set its sights beyond China. The completion and operation of the Singapore facility will allow Sinopec to build its international experience and credibility.

“To meet the increasing global demand for Chinese lubricant products, Sinopec will look towards investing and building more factories, undertake mergers and acquisitions and sub-contracting to establish its supply chain and service network.

“Our ultimate goal is for Sinopec is to establish an integrated business model for investment, production sales and management of our lubricant business, while striving to establish ourselves in the global lubricant sector.”

In welcoming the plant’s start-up, Yeoh Keat Chuan, managing director of the Singapore Economic Development Board, said it will add to the strength of the energy and chemicals sector, which accounted for 34% of the country’s manufacturing output of more than S$100 billion in 2012.

“Lubricants companies are leveraging Singapore as a base to tap on growth opportunities in Asia. The Asia-Pacific region is the largest and fastest growing lubricants market, accounting for almost 42% of the global lubricants market in 2012. This region is expected to register the highest growth worldwide, to reach 17 million tons of lubricants consumed by 2017,” he said.

“The lubricants industry also strengthens integration across the refining and marketing value chain. We have a strong lubricants ecosystem in Singapore, with top lubricants additives companies such as Chevron Oronite and Afton, and lubricants blending players such as Shell and Total being based here to serve the growing demand for lubricants in the Asia Pacific.

“Lubricants blenders in Singapore have the option of purchasing base oils, a key component of finished lubricants, from the local refineries and lubricant additives from Singapore-based manufacturers.”

Png Cheong Boon, CEO of JTC Corp, Singapore’s main industrial land developer and landlord, said the Sinopec plant is contributing to the start-up of a new cluster of energy and chemicals manufacturing plants in the Tuas South region to complement the existing well-developed hub on Jurong Island.

“JTC worked closely with Sinopec and other companies to plan and develop critical shared infrastructure, such as common jetty and pipeline corridor. These common infrastructure help companies to reduce their capital investments and operating expenses, and enable Singapore to optimise its limited waterfront land,” he said.

Sinopec produces a wide range of lubricants including internal combustion engine oil, gear oil, hydraulic oil, grease, turbine oil, electrical insulating oil and compressor oil for use in most industries including power generation, automobile, machinery, metal works, mining, construction, shipping and oil and gas.