Chevron Lubricants Lanka Plc (CLLP) has begun work on its new lubricant blending plant at Lindel Industrial Park at Sapugaskanda, Sri Lanka with an investment of LKR1.9 billion (US$15 million). The construction of the new facility is part of the company’s plan to relocate operations when the lease agreement with Ceylon Petroleum Storage Terminals Limited ends in July next year.
The new facility will consist of blending, filling and warehousing with 1.4 million litres storage capacity for raw materials and finished products. The total area of the plant buildings will be 5,000 square metres with the capacity to produce 45,000 MT of finished lubricants annually in a single shift operation..
The new facility, which has been leased by Chevron for 30 years, is expected to be commissioned during the third quarter of 2014.
LLUB dominates the local market with approximately 57 percent of Sri Lanka's lubricant market, which is reportedly estimated at 60 million litres a year. Chevron Lubricants Lanka also exports its products to Maldives and Bangladesh..
Sri Lanka's petroleum industry became a state monopoly in the 1960s as property rights were violated by the state and existing petroleum firms were expropriated. Lubricants became a private monopoly in the mid 1990s after Ceylon Petroleum Corporation privatized its Lubricants to Caltex, which is now part of Chevron.
In 1994, through the Government of Sri Lanka’s privatisation initiative, Caltex International acquired 51% equity in Lanka Lubricants and GOSL granted another 10% of shares to the employees. In 1996, GOSL sold its 39% equity holding to the public through the Colombo Stock Exchange. To date the ownership structure remains the same.