Russian chemical producer Orgkhim will break ground on its extender process oils plant in Malaysia by the end of this year, the company told Lube Report Asia.
The U.S. $50 million, 50,000 tons per year plant will be located on a 6.9-acre land plot in Tanjung Langsat, an industrial and port area in Pasir Gudang, Malaysia. We are going to build a facility there for production of carcinogenic-free process oils for the synthetic rubber and tire industry, the company said in a recent press release. The commissioning of the plant is expected in the summer of 2017.
Used to manufacture oil-extended natural or synthetic rubber, low-polycyclic aromatic hydrocarbon (PAH) extender oils are made from paraffinic and naphthenic distillates via either solvent extraction or hydrotreating.
The plant will use a propriety technology developed by Orgkhim. In addition, it will feature a tank terminal for feedstock and finished products and its own port for mooring of ships that carry feedstock and finished products.
The plant will produce Orgkhims entire Norman-branded product line of low-PAH extender oils such as treated distillate aromatic extract and medium extract solvate, according to the company. It will also produce a Norman-branded naphthenic aromatic.
Low-PAH extender oils have been in greater demand in such countries as Turkey, Japan, South Korea, Singapore or Malaysia in the last few years, according to consultancy Kline & Co. Such countries are substituting distillate aromatic extract products that contain high level of PAH. The demand for them peaked elsewhere globally after a European Union directive restricted the use of some PAHs such as benzopyrene, benzoanthracene and benzofluoranthene, as carcinogenic and toxic to the environment.
Orgkhim had considered another location on neighboring Singapores industrial hub on Jurong Island. However, it chose the Malaysian location based on factors such as proximity to the international airport Changi and prospects for further state-sponsored development, according to the company.
Tanjung Langsat area is the best option for any joint business operations in the region, said Viktor Tsebulaev, chairman of the companys board of directors. Its strategic location, excellent infrastructure and well developed transportation network justify our decision to select it as companys central hub for its Asia-Pacific operations.
Biochemical holding company Orgkhim is among the top 10 global producers of process oils, according to Kline. Its revenue in 2014 amounted to over $100 million, the company said. At its 110,000 t/y plant in Russia located in Uren, Nizhny Novgorod oblast, it makes three types of process oils used in production of tires, rubber and rubber compounds.