Wilmerding, Pennsylvania-headquartered Allegheny Petroleum Products Company and Kingston, Jamaica based Paramount Trading Jamaica Limited held a groundbreaking ceremony last Wednesday, attended by government officials, to build a 2.4 million gallons per year capacity lubricant blending plant in Kingston, Jamaica, the first and only lubricant blending plant in the country. The joint venture, which will be owned 50:50, will be named Allegheny Paramount Ltd.
Paramount and its American partner launched construction of the 13,500-square foot plant, being erected at a site adjoining Paramount's 39 Waltham Park Road complex, which will sit on roughly 1.5 acres in Kingston, and will manufacture automotive, industrial and other types of lubricants featuring Allegheny Petroleum's Altra and other AP brand names.
Barbara Kudis, Vice President, Allegheny Petroleum Products and President Allegheny Petroleum de Jamaica, told OEM/Lube News "We plan to commence production in January of next year. It will take five months to erect the Allegheny/Paramount factory, which initially will be producing approximately 250,000 gallons of lubricants to be distributed locally and in the region."
According to Kudis, the plant will also be blending synthetic lubricants. Non-blendable lubricants such as greases, transformer oils, etc will continue to be exported from Allegheny Petroleum's U.S. plants.
Since the JV plant will have excess capacity, the JV company also plans to be toll blending for other oil marketers in Jamaica.
Kudis told OEM/Lube News that "fleets" will be their major focus and that they have already received commitments from three large fleet accounts for heavy-duty diesel engine oils.
Paramount, already engaged in that line of business but as a distributor of imports, became sole distributor of Allegheny's Altra brand of lubricants and oils in Jamaica and the region in 2014 and now has extended its business partnership with Allegheny Petroleum to produce lubricants in Jamaica. Paramount trades in industrial lubricants for machines, trucks and heavy-duty equipment used by the bauxite industry and power companies, among others.
The lubricants market in Jamaica has a number of players, which distribute foreign brands. In recent years, according to Kudis, there have been whispers of plans in the works by different investors to set up manufacturing operations in Jamaica, but none of them came to fruition until now.
George Morvey, Industry Manager, Energy, Kline's Energy Practice, told OEM/Lube News "We peg Jamaica at between 10-15KT total finished lubricant demand, split 70/30 Automotive/Industrial. Combined, Chevron, Shell, BP, and ExxonMobil supply 80% of the finished lubricants consumed in the country." (Note: 10KT equals approximately 3 million gallons)
Under the Allegheny Paramount 50:50 partnership, Allegheny Petroleum will provide all the equipment for the factory, including an IT platform, tanks and pumps.
The new site will also boast a laboratory for the analysis and testing of oils, allowing the company to insource those functions currently done overseas.
"It's the only facility in Jamaica that will be able to analyze oils. If you want an oil analysis now, you have to send it abroad to get it done," Hugh Graham, managing director of Paramount Trading Jamaica Limited said.
The construction project will provide 70 jobs, while the factory will employ 30 at commissioning.
In addition to its blending plant in Wilmerding, PA, just outside of Pittsburgh, and the soon to be plant in Kingston, Jamaica, Allegheny Petroleum also has plants in Ambridge, PA; Boonville, Indiana and Angleton, TX.