Shell is to build its seventh lubricants blending plant in mainland China at the eastern gateway location of Tianjin. The plant will be ideally located to supply a range of lubricants products to northern China, supplementing Shell’s six existing plants on the Chinese mainland. The plant will have a capacity of 300 million litres per year initially, with the potential to expand 500 million litres. The Asia Pacific region is driving global growth in lubricants demand. By 2020 it is estimated the region will represent more than 50% of all demand. Almost 50% of that growth is expected to come from China. That means that by 2015, when the new Shell Tianjin blending plant starts up, China is expected to overtake the US as the largest market for lubricants.Official ground breaking has taken place at the new site at Nangang, Tianjin. Mark Gainsborough, Executive Vice President, Shell Global Commercial said: “We are delighted to confirm this significant new investment in our supply chain in China, which is the fastest growing lubricants market globally. Supply chain is the foundation for the consistent delivery of our high quality lubricants products such as Shell Helix, Shell Advance, Shell Rimula, Shell Tellus and Shell Omala. We are well positioned to meet the future needs of lubricants customers in Asia, to sustain our leading market position, and to realise our growth plans.”
Shell became the leading international energy company in China’s lubricants market acquiring three blending plants, in 2006 when, it bought a 75% share in Beijing Tongyi Petroleum Chemical Co and Tongyi Petroleum Chemical Co, which produce and market China’s leading independent lubricant brand Monarch. It has built blending plants in Tianjin, Zhapu (Zhejiang) and, most recently in Zhuhai (Guangdong). With a strong heritage of innovation and customer collaboration, it has also established a specialist lubricants technology facility at the Zhuhai site, and recently announced another in Shanghai to be opened in 2013.
Lubricants growth in China is expected to come from all market segments. Consumer demand will be driven by the number of Chinese vehicles, which is expected to triple in the next 10 years to just over half a billion. Industry demand will be led by the infrastructure related sectors (mining, construction, steel). A fifth of all construction projects globally are soon expected to be in China.
This new Tianjin blending plant will use state- of-the-art production techniques. It will apply ‘lean’ production concepts to produce a wide range of quality lubricants. A ‘push production’ model will be applied to ensure that product is delivered to distribution warehouses and on to Shell’s customers quickly and efficiently. Automated packaging equipment will accurately fill the full range of products into various pack sizes to suit customer preferences. The plant design will meet high environmental standards including measures to reduce waste and carefully control waste disposal to ensure no harm to the environment.
The new plant will adopt similar technology and levels of automation at the existing and recently expanded plant, also located in Tianjin. The two plants will complement each other, providing a full range of lubricants serving Shell customers in north China.