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The Haiphong-based plant will produce engine oil and lubricants for motorbikes and cars
The newly minted firm Idemitsu Lube Vietnam has a total chartered capital sum of $31.7 million to produce engine oil for motorcycles and automobiles, general industrial lubricants and related products in Haiphong’s Dinh Vu-Cat Hai Economic Zone.
General director Ryuji Kusaka of Idemitsu Lube Vietnam told VIR that its lubricant blending facilities would cover 60,000 square metres with a manufacturing capacity of approximately 35 million litres of lubricants a year. He added that the facilities use environmentally friendly technology and 40 per cent of its products would be exported overseas. Under its investment certificate, it’s permitted to operate for 46 years.
A representative of Idemitsu Kosan said that the group established Idemitsu Lube Vietnam to improve customer services and Idemitsu’s manufacturing and sales network.
Entering into overseas lubricant markets has been identified as one of Idemitsu’s investment priorities over the coming year.
Vietnam has had continued high economic growth of about six per cent annually. Its population was around 90 million in 2010, of which 60 per cent was less than 30 years old. These factors make the market extremely attractive to Idemitsu.
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 the country.
Tokyo-based Idemitsu labelled Vietnam as a “core business” interest in its 2011 financial report, mainly as a result of its significant investment in the Vietnam Nghi Son project.
The Nghi Son oil refinery and petrochemical complex, about 200 kilometres south of Hanoi, is slated to be operational by 2017 and have a crude capacity of 200,000 barrels per day. Idemitsu holds a 35.1 per cent stake in the project as part of an international consortium tasked with developing the project.
Kuwait Petroleum International, a subsidiary of the state-owned Kuwait Petroleum Corporation, holds 35.1 per cent, while PetroVietnam and Mitsui Chemicals own 25.1 and 4.7 per cent, respectively.
Idemitsu Kosan is one of Japan’s biggest economic groups. It was founded in 1911 and specialises in petrochemistry, lubricating oil mixing, mineral resources and energy exploiting.