Malaysia-based Hyrax Oil Sdn Bhd announced it will be investing US$30 million to establish a four million litres per month lubricant blending plant in Muthurajawela in western Sri Lanka. The plant is Hyrax Oil's second plant outside of Malaysia after the first joint-venture plant in Johannesburg, South Africa.

Three agreements were signed on May 6 between Hyrax Oil and Ceylon Petroleum Corporation (CPC), the national oil company of Sri Lanka, for a period of 20 years.

The signing was witnessed by the Malaysian Minister of International and Trade Industry Datuk Seri Mustapa Mohamed and the Sri Lankan Minister of Petroleum Resources Development Chandima Weerakkody.

Mustapa said "This is a historical moment for us (Malaysia). This encourages other Malaysian companies to tap into the market and invest here in future".

Hyrax Oil Founder and Managing Director Datuk Hazimah Zainuddin said the company's expansion into Sri Lanka would boost the growth of its lubricant oil segment in foreign markets especially within the seven countries under the South Asian Association for Regional Cooperation (SAARC), including Sri Lanka.

Construction of the plant will start within two months, and it is expected to be completed within a year.

Hazimah indicated that 70 per cent of Hyrax Oil's revenue comes from the export market, with Sri Lanka accounting for 25 per cent, while only 30 per cent comes from the domestic market (Malaysia).

The three agreements that were signed are for a build, operate and transfer (BOT) agreement, a supply agreement and a land lease agreement.

Hyrax Oil will construct the plant and subsequently manufacture the lubricant products for CPC for a term of 20 years.

Incorporated in 1991, Hyrax Oil has successfully marketed its products in Australia, New Zealand, Korea, China, Thailand, the Philippines, Mozambique, Nigeria, Tanzania, Ghana, Saudi Arabia, the UAE, Pakistan, Nepal and Bangladesh.

Its Malaysian plant, situated in Jalan Meru, Klang, started operations in 1995 and is capable of producing in excess of 50 million litres of oil products per annum. Its products include specialty oils like transformer oil and cable oil as well as top quality and high performance automotive, marine and industrial lubricants.