KH Neochem to boost capacity for refrigeration lubricant materials
Photo courtesy of KH Neochem

KH Neochem to boost capacity for refrigeration lubricant materials

KH Neochem Co., Ltd. announced that it will invest in a new manufacturing plant, to increase the production capacity of raw materials for refrigeration lubricants in Ichihara City, Chiba Prefecture, Japan.

KH Neochem provides premium chemical products in a variety of fields focused on three core business areas: Basic Chemicals, Performance Materials and Electronic Materials. The Japanese company has two plants: one in Yokkaichi and the other in Chiba.

The Yokkaichi Plant manufactures industrial alcohols, acetates, ketones and other solvents, as well as plasticizer raw materials. In addition, it manufactures fine chemicals, including organic acids, specialty polymers, lubricant raw materials and high-purity solvents for electronic materials. The range of solvents produced at the plant is one of the most extensive of any Japanese manufacturer, and customers are found in a wide variety of industries in Japan and abroad. The plant, incorporating the Umaokoshi Plant and the Kasumigaura Plant, occupies a site of 320,000 square meters in a petrochemical complex in Yokkaichi City.

The Chiba Plant manufactures industrial fatty alcohols and synthetic fatty acids, which are used as plasticizer raw materials, as well as hydrocarbons and other performance chemicals. The plantโ€™s high-pressure reactors enable the efficient manufacture of fatty alcohols. KH Neochem is the sole manufacturer in Japan of isononanoic acid, a raw material for lubricants used in non-CFC air conditioners, and supplies this product to customers in Japan and overseas. The plant occupies a site of 215,000 square meters in a chemical/petrochemical complex in the center of the Keiyo Rinkai area.

Growing demand due to expansion of air conditioner market in emerging countries

Recently, there has been growing demand for KH Neochemโ€™s refrigeration lubricant raw  materials due to the expansion of the air conditioner market in emerging countries  and the shift to environmentally friendly refrigerants to protect the ozone layer and prevent global warming. Refrigeration lubricant is a lubricating oil used to circulate refrigerants inside air conditioners. With the tightening of international environmental regulations, demand for environmentally friendly refrigeration lubricants is expected to grow further in the future. 

Through this capital investment, KH Neochem will strengthen and optimize the production  capacity of the entire Chiba Plant in Japan, including for refrigeration lubricant raw materials, further enhancing the profitability of the plant. By enhancing the supply of refrigeration lubricant raw  materials, KH Neochem will help to bring about an environmentally friendly society. 

The investment in the new plant, which will be financed with available cash on hand and debt financing, is approximately JPY9.5 billion (USD82.4 million).

Construction date is June 2022. Completion of the construction is scheduled for July 2024, with production to start the following month.