Shell Indonesia has kicked off operations on Indonesia's largest lubricant factory. (AFP Photo/Adrian Dennis)

Shell Kick Starts Operations on $132m Lubricant Factory in Bekasi


NOVEMBER 05, 2015

Jakarta. Shell Indonesia, the local arm of The Hague-based Royal Dutch Shell, began operations at its $132 million oil blending and packing plant in Bekasi, West Java, on Thursday in order to meet a growing demand for engine lubricants across the archipelago.

"This factory represents our confidence in Indonesia's lubricant market, which is the biggest in Southeast Asia and one of the driving forces behind the lubricant industry in the region, along with China and India," said Mark Gainsborough, Shell Lubricants executive vice president.

The plant, which the company began building in August 2013, is the largest foreign-owned lubricant plant in Indonesia.

Located within the industrial estate Marunda Center in Bekasi, the 75,000-square meter factory can produce up to 136 million liters lubricant each year – or enough to replace oil in 460,000 motorcycles and around 90,000 cars each day.

Indonesia is a home to more than 100 million motorcycles and more than 20 million cars, trucks and buses according to data from the Central Statistics Agency (BPS), Indonesia Automotive Industry Association (Gaikindo) and Indonesia Motorcycle Association (AISI).

The plant will produce Shell's lubricant brands, including Shell Helix for passenger cars, Shell Advance for motorcycles, Shell Rimula for heavy-duty machines and Shell Spirax for engine transmission.

Indonesia's demand for engine lubricant has reached 1.8 billion liters each year, of which the local industry can only supply 850 million liters, according to Harjanto, the Industry Ministry's director general for manufacturing industries.

Pertamina Lubricants dominates 60 percent of the domestic market.

Shell expects the new plant to strengthen its supply for the domestic and international markets.

Gainsborough said the company has opened a discussion with the government to ease the process for Shell to export its products.