China oil giant, Sinopec, is set to invest in its first blending plant outside its home country.
Sinopec, or the China Petroleum and Chemical Corporation, has announced plans to invest $91m in a new plant in Tuas, Singapore. Although the company is one of the largest oil producers in the world, Sinopec apparently struggles with brand recognition beyond its domestic market and is keen to expand its reach into Asia.
The new plant is likely to help reduce costs of transportation, particularly to Australasia, and thus increase revenues and market share in the region. The company also stated that better efficiency in customer service was a reason for the investment.
Initial plant capacity will be 100,000 tonnes annually, mainly comprising automotive and marine lubes. However, once operational, Sinopec has plans to increase capacity by as much as 50% within three to five years, depending on market success. The plant will form a regional hub for Sinopec's products as well as producing around five percent of the company's overall lubes output.