CPC-Hyrax Oil’s new lubricant blending plant attracts more FDI
Mr.Chaminda Welegama
In a 20-year BOT agreement, Malaysia’s Hyrax Oil Sdn Bhd inaugurated its second lubricant blending plant in the world in a strategic collaboration with the Ceylon Petroleum Corporation (CPC), last month in Muthurajawela, Wattala. The first one is in Johannesburg, South Africa.
Under a Build Operate and Transfer (BOT) agreement, this project was endorsed by the Cabinet in 2016, leading to the signing of the BOT and the Supply Agreements on May 6, 2016. Along with Hyrax Oil, other Malaysian investors are placing their confidence in Sri Lanka, Chaminda Welegama, Country Director Hyrax Oil told the Business Times in an interview recently.
The plant which will employ 105 people from the now 24 upon commissioning, encompass a 5-acre compound. CPC and Hyrax forged a Supply Agreement for increased collaboration and partnership. The opening ceremony was graced by dignitaries from Malaysia and Sri Lanka.
All this started 13 years ago, in 2006 when Hyrax Oil Sdn Bhd participated in an international tender to provide lubricants to CPC, with whom it has been collaborating for more than 10 years. Supplies commenced in 2008 and over the next 10 years, CPC in collaboration with Hyrax Oil Sdn Bhd launched their own brand of lubricants, Ceypetco-Hyrax. Since the introduction of these lubricants, CPC captured the third spot in terms of market share in the local lubricants industry.
The plant spans 40,000 sq ft and has a capacity of 72,000 MT per annum to blend automotive, industrial, and marine and specialty lubricants, including greases and transformer oil for power and distribution transformers.
A worker at the plant. Pix by Indika Handuwala
The plant’s filling and packing capabilities extend to Small Packs, Pails, Drums, IBC Tanks and Flexibag.
With the new facility, Hyrax Oil aims to achieve a balance in their production and sales in the region and strengthen their footprint in important and growing markets – especially in the SAARC nations, Mr. Welegama added. “This will significantly boost our regional production flexibility in Asia. From here, we are delivering our locally produced API (American Petroleum Institute) and OEM (Original Engine Manufacturers) to customers worldwide.” He added that through the free trade agreements that Sri Lanka has entered into with the rest of the SAARC countries, Hyrax Oil products can be now traded through Sri Lanka.
Hyrax Oil is also committed to transfer all necessary know-how and technology to local Sri Lankan staff who will manage the plant under Hyrax Oil’s stewardship. Hyrax is not just focused on expanding employees’ and apprentices’ technical skills but also boosting motivation, enthusiasm and team spirit, according to Mr. Welgama.
With the opening of the plant and the expected commercial production Q3 2019, CPC will be better positioned to carve out a greater market share while earning cost savings to further improve the profitability of the lubricants division. Mr. Welgama added that CPC will benefit from the new plant from short supply routes and the high level of flexibility this gives their supply chain. He gave special thanks to Kabir Hashim, Minister of Highways, Road Development and Petroleum Resources Development, Anoma Gamage Deputy Minister Petroleum Resources Development, Sunil Hettiarachi, Secretary to Ministry of Highways and Road Development and Petroleum Resources Development, G. S Vithanage, Chairman CPC, Managing Director and management of CPC past ministers and chairmen for their guidance and fullest cooperation.
A laboratory equipped with the latest state-of-the-art testing equipment is built as an essential part of the new plant with Hyrax Oil, imparting technical skills to local staff. After sales and technical support to CPC’s dealers and petrol sheds around the country will be elevated in accordance.
Research and development and a fully equipped laboratory with state-of-art testing equipment coupled with certified ISO procedures and protocols ensures that the products meet with exacting international standards. Hyrax Oil has more than 100 products in its portfolio but continues to design products that cater to special applications and suit other local requirements as well.