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The Lubrizol Corporation announced January 19 its decision to proceed with a 10-year phased investment plan to upgrade operations and increase global capacity in additives. The centerpiece of the investment plan is a new, wholly owned greenfield plant in China supplemented by select debottlenecking projects and infrastructure improvements at existing plants in the United States and Europe.
This plan was announced in 2008 but was placed on hold in 2009 due to the global recession and resulting uncertainty regarding demand. Worldwide additive demand recovered significantly in the second half of 2009. Normal market growth is 1-2% annually. This investment is needed to keep pace with demand and to ensure the security of future supply and reliability of operations.
As part of the 10-year plan, Lubrizol has signed a letter of intent to reserve land use rights for a wholly-owned manufacturing site in South China within the Zhuhai Gaolan Port Economic Zone. A wholly-owned manufacturing facility will be developed and phased in to meet market demand. By phasing in select capacity additions in China, Lubrizol aims to respond to lubricant growth in Asia and better match its manufacturing footprint with global demand patterns. The site is ideally located for exporting products throughout Asia.
The China plant will require an investment in excess of $200 million over the next three years. In addition, Lubrizol plans to accelerate reinvestment at existing plants for upgrading infrastructure, as well as ensuring compliance with ever increasing health, safety and environmental requirements. All together, these efforts will involve investing more than $1.0 billion over the next decade.
Dan Sheets, Lubrizol Additives president, commented, "Over the past five years we have stated that we would improve our financial returns in order to justify reinvesting in the business. By making these extensive investments, we are keeping our commitment to customers and ensuring that we continue to be the most reliable supplier."
Lubrizol plans to break ground at the Zhuhai Gaolan site in late 2010. The plant will include select additive components, eventually incorporating driveline, industrial and fuel components, manufacturing and blending. The new plant will be complementary to Lubrizol's existing joint venture, Lanzhou Lubrizol Lanlian Additive Company Ltd., which will benefit by doing more business with Lubrizol.
About The Lubrizol Corporation
The Lubrizol Corporation is an innovative specialty chemical company that produces and supplies technologies that improve the quality and performance of customers' products in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as fuel additives for gasoline and diesel fuel. In addition, Lubrizol makes ingredients and additives for personal care products and pharmaceuticals; specialty materials, including plastics technology and performance coatings in the form of specialty resins and additives. Lubrizol’s industry-leading technologies in additives, ingredients and compounds enhance the quality, performance and value of customers’ products, while reducing their environmental impact.
With headquarters in Wickliffe, Ohio, The Lubrizol Corporation owns and operates manufacturing facilities in 18 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 6,800 employees worldwide. Revenues for 2008 were $5.0 billion.