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Malaysian firm Hyrax Oil signs deal to build lubricant plant in SL
A Malaysian manufacturer of petroleum derivatives with a vast customer base worldwide will be investing $ 30 million to establish a lubricant manufacturing plant in Sri Lanka.
Hyrax Oil, which produces lubricants for various applications including transformer oil, motor oil & other specialty lubricants and exports to more than 35 countries, will establish a four million litres per month lubricant blending plant in Muthurajawela in western Sri Lanka, according to a report in Bernama.
Three agreements were signed Friday between Hyrax Oil and Sri Lanka’s petroleum authority, the Ceylon Petroleum Corporation (CPC) 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.
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.
The 2.02 hectare plant is Hyrax Oil’s second plant outside of Malaysia after the first joint-venture plant in Johannesburg, South Africa.
According to Hyrax, construction of the plant will start within two months, and it is expected to be completed within a year. The new plant is expected to earn revenue of million per annum from Sri Lanka and countries within the region.
“This is a historical moment for us (Malaysia). This encourages other Malaysian companies to tap into the market and invest here in future,” Mustapa said at the signing.
Sri Lankan Minister said the partnership would bring many benefits to Sri Lanka.
“Upon completion, the plant will create employment for locals, and consumers here will enjoy premium quality lubricants at much more competitive prices,” he said, adding that the government of Sri Lanka encourages and welcomes Malaysian investments.
Speaking at the occasion, 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.
Hazimah indicated that 70 % of Hyrax Oil’s revenue comes from the export market, with Sri Lanka accounting for 25 %, while only 30 % comes from the domestic market (Malaysia).