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Shell Indonesia to double capacity of its world-class lubricant blending plant

Shell Indonesia to double capacity of its world-class lubricant blending plant
Groundbreaking ceremony for the expansion of Shell’s Marunda lubricants oil blending plant in Bekasi, Indonesia on 12 March 2020. Photo courtesy of Shell

Shell Indonesia announced that it will double the production capacity of its world-class lubricants oil blending plant (LOBP) located in Marunda Centre, near Jakarta, Indonesia. Upon completion, the plant will be capable of producing up to 300 million litres (ML) of finished lubricants annually across the nine-hectare site. This expansion will enable Shell to meet the growing demand of the domestic lubricants market and contribute to the advancement of Indonesia’s downstream industry.

“The non-oil and gas processing industry has seen 4.34% growth in 2019. Indonesia’s attractiveness as an industrial investment hub is reflected from the increase of the Ease of Doing Business Index compared to the previous year. Combining this improvement with other stimulus from the government and the transformation towards industry 4.0 is expected to increase the capacity and industrial utilities of the lubricants industry in Indonesia, aligned with the growth of the entire industry,” said Indonesia’s Minister of Industry, Agus Gumiwang Kartasasmita, who was represented by Muhammad Khayam, director general of Chemical, Pharmaceutical and Textile Industries, during the groundbreaking ceremony.

The Minister added that based on the 2019 data, lubricant domestic production only reached 908.36 ML per annum. “Therefore, we appreciate Shell’s commitment to develop the domestic lubricant industry through the expansion of its Marunda LOBP and for successfully obtaining the Indonesian national standard certificate (SPPT SNI) for all of the automotive lubricants products. We hope that PT Shell Indonesia will continue to be the government’s strategic partner in the lubricant industry sector.”

“This important investment demonstrates our confidence in Indonesia and is in line with our strategy to invest in markets where there is growing demand for lubricants,” said Carlos Maurer, executive vice president, Shell Global Commercial. “Shell’s Marunda lubricants oil blending plant is already the largest, internationally operated lubricants plant in Indonesia. Doubling its capacity helps Shell expand its business and customer base in Indonesia, one of Southeast Asia’s largest lubricants markets. With Shell’s world-class lubricant production capability and integrated supply chain network, we will be better able to respond to the growing demand in Indonesia for premium lubricants in the automotive, industrial and marine sectors.”

Newly appointed President Director and Country Chair, Shell Indonesia, Dian Andyasuri, said, “Shell is determined to continuously uphold the spirit of ‘Shell Untuk Indonesia‘ by becoming a strategic partner to the Indonesian government in the lubricants industry, an industry partner to push innovation and sustainability forward, and a partner for all our customers to help enhance their mobility with SNI certified and high quality oil products. Through investment in building world-class automated facilities, with strong local relevance and sustainable factory operations, Shell hopes to contribute in supporting Indonesia’s ambitions to become one of the largest economies in the world.”

Shell became the first international brand to receive the Indonesian National Standard (SNI) for its automotive lubricants products. Three products from Shell, Argina (lubricant for medium speed diesel engines), Rimula (lubricant for heavy-duty diesel engine) and Tellus (lubricant for hydraulic fluids) have received certification from the Ministry of Industry, demonstrating the company’s leadership to comply with local regulations through the compliance of the local content regulation (TKDN).

Indonesia is among the world’s top 10 biggest lubricant markets and is expected to be the largest in terms of market demand in Southeast Asia by 2021. The growth comes from rising applications in key industries including automotive and transportation, manufacturing, mining, construction, agriculture, and power generation. In addition, the Government of Indonesia’s plan to advance toward Industry 4.0 unlocks more opportunities for advanced machineries that require high-quality lubricants.