(Reuters) – Total said on Friday it had started operations at a new lubricant oil plant in Singapore, the French energy company’s largest such facility in the world, as it seeks to double volumes in Asia over the next 10 years.
The 310,000 tonnes per year plant in Tuas will consolidate Total’s production in the country’s western industrial region to save on operational costs, the company said in a statement, without elaborating on the cost of investment.
The new facility, which blends base oil with additives to produce lubricants that are used in vehicles, ships and industries, will replace by year-end two existing plants with a total capacity of 180,000 tpy in Singapore, it said.
Lubricants demand in Asia is growing at 1.7 percent per year, or close to 300,000 tonnes, Pai Kok Tan, the company’s vice president of lubricants marketing and services in Asia-Pacific told reporters during the plant opening.
“For Total, …, we want to double our volume from the current half a million tonnes per year or more, so this will double our market share by 2025,” he said.
The world consumes 40 million tpy of lubricant oil, of which Total has 5 percent market share, making it one of the top five suppliers worldwide, said Philippe Charleux, vice president of Total’s global lubricants business.
Still, the new unit starts operations at a time when global lubricant oil demand growth has slowed in line with the world economy.
“We think that the (lubricant) oil demand will grow at 0.6-0.7 percent for the next 10 years … which is less than what we anticipated before,” Charleux said, adding the company had previously expected growth to be in the range of 2 percent.
“So we are less optimistic for the time being even though the market is still growing.” (Reporting by Florence Tan; Editing by Biju Dwarakanath)