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Shell to Open Lubricant Plant in Indonesia

From the Jakarta Post

Anglo-Dutch Royal Dutch Shell announced Friday that the company would set up a US$100 million lubricant plant in the western part of Java with a total capacity of 100,000 tons per year.

PT Shell Indonesia president director Darwin Silalahi said the plant would be the company’s production hub, not only to supply the Indonesian domestic market, but also the Asian regional market.

“We’ve been discussing with the Industry Minister [M.S. Hidayat] about what incentives Shell can get to make the plant competitive for the export market,” he told reporters after meeting the minister in Jakarta.

Darwin said that in addition to fulfilling domestic demand, lubricants from the planned plant would be exported to emerging Asian economies such as China, India and Vietnam, whose demand has been rising over the past several years.

The plant would start operations in late 2013 or early 2014, Darwin said. He estimated that the plant’s construction process would absorb around 700 workers, while its operation would open around 250 new job opportunities.

Industry Ministry director general of upstream chemical industry Tony Tanduk reported that Shell was eying opportunities to profit from the rapid growth of Indonesia’s automotive industry.

“That remarkable growth has caused the demand for lubricants to rise significantly,” he said.

Indonesia’s automobile sales reached 764,710 units in 2010, while motorcycle sales exceeded 7 million. The Indonesian Automotive Industry Association (Gaikindo) projects car sales may top 850,000 this year.

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