Japanese refiners to rationalize lubes facilities

Three of Japan's largest oil refiners�Nippon Mitsubishi Oil Corp., Idemitsu Kosan Co. Ltd., and Japan Energy Corp.�separately have announced plans to reduce their facilities for refining and distributing lubricants in an effort to further reduce operating costs.


TOKYO�Three of Japan's largest oil refiners�Nippon Mitsubishi Oil Corp., Idemitsu Kosan Co. Ltd., and Japan Energy Corp.�separately have announced plans to reduce their facilities for refining and distributing lubricants in an effort to further reduce operating costs. The moves are part of the ongoing restructuring within the Japanese oil sector as companies struggle with high crude prices, which they are unable to pass onto consumers due to strong competition.

Nippon Mitsubishi, Japan's largest oil refiner and distributor, said it plans to trim its lubricant production capacity, which currently stands at 692,000 kl./year, by about 25% after March 2001. As part of the move, the company will halt lubes production at its 95,000 kl./year Kawasaki plant in Kanagawa prefecture and at its 66,000 kl./year Kudamatsu plant in Yamaguchi prefecture within the next 1-2 years. It also will shut down its 134,000 kl./year Kashiwazaki plant in Niigata prefecture by March 2001.

The closure of the three units will leave the company with six production facilities.

Idemitsu Kosan said it will reduce the number of its lubricant distribution centers to 15 from 27 by June 2001, in a move it says will save the company around �700 million/year in distribution costs. Japan Energy Corp, meanwhile, said it will reduce its number of lubricant oil storage tanks from the current 22 to 9 by March 2002.

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