Sinopec to Build 300,000-Ton-Per-Year Lubricant Production Base

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Researched by Industrial Info Resources (Sugar Land, Texas)--To achieve breakthroughs in the Sichuan and Chongqing markets, China Petroleum & Chemical Corporation (Sinopec) (NYSE:SNP) (Beijing), is planning to launch a large project in the area this year: the $142 million Great Wall Lubricant production base in Jianqiao Industrial Park in the Chongqing Municipality. The plant will be able to produce 300,000 tons of lubricant per year.

Zhang Xiutian, Director of Branding at Sinopec's lubricant company, said that Sichuan and Chongqing are one of the strategic foci of the project. So far, no brand has achieved a dominant position in the lubricant market in Chongqing. Competition between Chinese brands and ExxonMobil (NYSE:XOM) (Irving, Texas), Shell (NYSE:RDS.A) (The Hague, The Netherlands) and BP (NYSE:BP) (London) is fierce, providing Great Wall Lubricant the opportunity to shake up the Sichuan and Chonqing market.

The total consumption of lubricants in Sichuan and Chongqing is about 300,000 tons, with Great Wall possessing roughly 20% of the market share. However, Mobil, Shell and BP control the high-end market. Sinopec's goal is to take 30% of the Sichuan and Chongqing market, establishing itself as the dominant brand for the area. Great Wall is focusing on gaining ground in the high-end lubricant market controlled by their competitors.

While Great Wall Lubricant has 13 production bases, the lubricant made in the Chongqing Municipality is not only suitable for the rolling geography and hot and humid weather of the region, but has also been used in Chinese spacecraft such as the Shenzhou spacecraft and the Chang'e 1 satellite.

Since 2003, Sinopec has built new production bases in Beijing and expanded production facilities in Guangzhou and Shanghai. It is also devoting considerable effort into moving further into international markets, reinforcing its domestic market with international sales.

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