Japanís Idemitsu Kosan Co.,Ltd. has announced that it established Idemitsu Lube Vietnam Co.,Ltd., a wholly owned subsidiary, in the northern port city of Haiphong City, Vietnam on August 13, 2012. The capital investment is estimated to be US$23.3 million (about •1,860 million).
Idemitsu Lube Vietnam will construct lubricant blending facilities within a plant site of 60,000 square meters having a manufacturing capacity of 35,000 kiloliters of lubricants per year. Idemitsu Lube Vietnam expects the startup of commercial operations of the lubricants manufacturing plant in January 2014.
The Company established Idemitsu Lube Vietnam to tap the growing demand for motorcycle engine oil in the booming southeast Asian country and with the aim of further improving customer services and constructing Idemitsuís original manufacturing and sales network. The plant will also blend other motor oils and industrial oils,
Idemitsu Kosan plans to enhance its sales of lubricants in the domestic market of Vietnam and targets a sales volume for lubricants of about 20,000 kiloliters per year and an annual turnover of US$35 million (about •2.8 billion) by 2015. Idemitsu currently sells 3,000 kiloliters of lubes manufactured by a local third-party toll blender.
Total lube sales in Vietnam reached 350,000 kiloliters last year. Sales are expected to reach 530,000 kiloliters by 2020.
Vietnam has had continued high economic growth of about 6% annually. Its population was around 90 million in 2010, of which 60% was less than 30 years old. Thus, further expansion of domestic demand is expected. In 2010, the number of motorcycles sold in Vietnam reached 3.8 million. Demand for high-performance lubricants including oil for motorcycles is expected to continue to increase at a constant rate in Vietnam.
Idemitsu Kosan's refinery in Chiba, Japan, east of Tokyo, has the capacity to produce 6,000 bpd of lube base oil, specifically 2,350 bpd of API Group I, 2,750 bpd of Group II and 900 bpd of Group III lube base oils.