ILMA Compoundings March 2017 - 26

VN Oil was set up in 2010 with
license to use re-refining technology
from U.S. Chemical Engineering
Partners (CEP). The plant will use hydro-treating technology with catalyst
to treat and produce API Group II
base oils. The plant will be built in the
near future in Hiep Phuoc Industrial
Park, Nha Be District, Ho Chi Minh
City, where "potential clients" such
as Castrol BP and Motul's blending
plants are located. It will become the
only re-refined base oil and used oil
treatment center for the country, serving the city and surrounding provinces
including Tien Giang, Long An and
Binh Duong. The plant has a capacity
to re-refine 69,000 metric tons per
year (MTA) of used oil to produce
45,000 to 50,000 MTA of base oil.

"VN Oil was set up in 2010 with
license to use re-refining technology from U.S. Chemical
Engineering Partners (CEP)."

MARCH 2017

| COMPOUNDINGS | ILMA.ORG

"Local Vietnamese blenders are the
ones who will benefit the most from
savings on import taxes, transportation costs by sea and by land, and other logistics costs by buying our base
oils," said Van, who is based in the
U.S. and has 35 years of experience in
the oil and gas industry.
According to Van, total lubricant
consumption in Vietnam is estimated
to be in the range of 350,000 MTA to
400,000 MTA, with the majority of
lubricants blended locally. He expects
lubricant consumption to grow 3
percent to 4 percent per year, with automotive lubricants and hydraulic oils
leading market growth. "Our national
base oil demand is currently estimated
at 400,000 metric tons per year, while
our plant will only be able to supply
45,000 metric tons per year. So, locally,
there will definitely be more demand
for re-refined base oil in the future,
and the market has been observed to
slowly shift towards Group II base
oil," he said. Like VN Oil, Indonesia's
major re-refiner and lubricant blender,
Wiraswasta Gemilang Indonesia, is
also using CEP technology. However,
at its plant, the company is producing

Group I for local blenders and has
eight used oil collection stations. "For
now our base oil is only used by local
market," said Wahyu Nugroho, the
company's general manager of Plant
Operation.
Another re-refinery company, PT.
ALP Petro Industry, has its plant in
East Java on 17.3 acres. The company
produces re-refined base oil and a
lube blending plant for the Italian Eni
brand of automotive and industrial
lubricants. The company has three
blenders to mix various combinations
of re-refined base oil, virgin base oil,
synthetic base oil and additives.
"Indonesia currently has three main
re-refiners, and each company has a
used oil feed capacity ranging from
20 kilotons to 60 kilotons. Re-refined
basestocks produced in Indonesia are
used by re-refiners themselves, sold to
small lubricant blenders and exported,"
said Sushmita Dutta, project manager
of Kline & Co., a U.S.-based consulting company.

"Indonesia currently has
three main re-refiners, and
each company has a used oil
feed capacity ranging from
20 kilotons to 60 kilotons."
"Re-refiners generally focus on small
blenders, who are price sensitive and
do not have a strong brand name in
the industry, to sell re-refined base
stocks," added Kunal Mahajan, project
manager of Kline & Co.
In countries with a large geographical
land mass, such as India and China,
where transportation costs can have a
negative impact on margins and the
distance from virgin base oil plants
makes it difficult to secure a stable

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ILMA Compoundings March 2017

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