Shell to double capacity in Indonesian lubricant plant to meet growing domestic demand
Mar 12, 2020
Bekasi, Indonesia – Shell Indonesia today announce its investment to 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 of finished lubricants annually across the 9-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.
Minister of Industry of the Republic of Indonesia, Agus Gumiwang Kartasasmita, who is represented by Muhammad Khayam, Director General of Chemical, Pharmaceutical and Textile Industries at the groundbreaking ceremony event said, “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.”
The Minister added that based on the 2019 data, lubricant domestic production only reached 908.36 ML/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 lurbicants 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 our 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 a 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 ten biggest lubricant markets and is expected to be the largest in terms of market demand in Southeast Asia by 20201. 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.
Shell also seeks to be a good neighbour. Since December 2015, Shell initiated a community-based waste management programme, called as ‘Desa BERSEMI’ (Clean, Healthy and Self-sufficient village) in two villages, Pantai Makmur and Segara Makmur, located within the vicinity of the Marunda plant. The programme focuses on developing a clean and healthy living environment, entrepreneurship and circular economy thinking such as: a community compost area, a “waste bank” where residents can locals can trade recyclables for cash; a small-scale urban farm for medicinal plants and common vegetables; and small handicraft businesses using non-recyclable waste. To date, the program has benefited 200 households.
1 Ipsos Business Consulting. (2016). The New Lubricant Trade in ASEAN: A Promising New Era.
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Notes to Editors:
- Shell owns 100% and operates this plant, thus ensuring full control over product quality.
- The existing plant at Marunda opened in November 2015 with installed production capacity designed for 136ML/annum. All processes at the plant are fully automated and controlled at all stages by operators based at the control room.
- The plant produces automotive, industrial and marine lubricants. These include popular brands like Shell Helix (passenger car motor oil), Shell Advance (motorcycle oil), Shell Rimula (heavy duty engine oil), Shell Spirax (transmission oil) and Shell Tellus (hydraulic oil). It also produces Shell industrial lubricants to cater the needs of rapid development in key industrial sectors like construction, power generation and mining.
- The quality of Shell’s products is ensured by regular testing at the world-class test laboratory located on-site.
- Shell operates 29 lubricants oil blending plants globally.