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August 12, 2014

Volume 7 Issue 8

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Tianhe Builds Group II/III Facility

JINZHOU, China – The world’s fifth-largest additives supplier, Tianhe Chemicals, is building a facility that will output API Group II and III base oil.

The facility, under construction at Tianhe’s Jinzhou, China, headquarters, is scheduled to start operations next year with an initial capacity of 400,000 to 500,000 metric tons per year.

The project would be unusual insofar that lubricant additive companies have not engaged in base oil supply, especially on that large of a scale.

Company officials confirmed the project to Lube Report Asia but declined to provide additional information and referred a reporter to the prospectus for an initial public offering on the Hong Kong Stock Exchange in June. According to the prospectus, the project has a budget of ¥2.95 billion, of which ¥2.1 billion had been spent by the start of 2014. The prospectus said the facility would have capacity to output 400,000 to 500,000 t/y of Group II and III oils.

Tianhe raised H.K. $5.1 billion (U.S. $654 million) through the IPO. The money allows the company to accelerate expansion of its two major businesses – additives and fluorochemicals.

In an interview with Lube Report Asia, Ravi Girimaji, CEO of Tianhe’s additives segment, said Tianhe will invest aggressively in package development, production capacity expansion and geographical expansion in the coming years.

“Our goal is to make Tianhe a billion-dollar multinational company,” Girimaji said.