Expansion: German Lubricant Company Strengthens Presence in Vietnam
Fuchs Vietnam, a German lubricant company, is increasing its presence in Vietnam with a new high-tech plant. With an investment capital of €9 million ($9.6 million), the plant aims to meet the growing demand for lubricants in the region. The expansion will also allow Fuchs to diversify and expand its product range to cater to the strong growth potential of the Vietnamese market.
Spanning over 20,000 square meters, the plant includes offices, a laboratory, production and filling facilities, and a warehouse. Initially, the plant has a capacity of 20,000 tonnes per year, with the potential for expansion in the future. Production is scheduled to commence in the fourth quarter of 2023, offering a range of high-performance lubricants, including automotive oils, industrial oils, metal working fluids, and products for the mining industry.
Daniel Henn, the managing director of Fuchs Vietnam, expressed excitement about the expansion, highlighting the significance of Vietnam as an emerging market and its role in diversifying supply chains. He emphasized that the expansion strengthens Fuchs’ global presence and local capabilities.
According to a report by Ken Research, Vietnam’s lubricant market is projected to reach VND41 trillion ($1.69 billion) by 2026, driven by increasing demand in the industrial and automotive sectors. This growth is expected to attract more players to the lubricant sector, either independently or through partnerships. Additionally, companies are anticipated to focus on direct sales to improve margins by eliminating intermediaries.
Fuchs has been operating in Vietnam since 2013 and further expanded its presence in 2021 by acquiring 70% of the lubricants business of STD & S Co., Ltd., a local distributor of specialty lubricants. This business was integrated into Fuchs Lubricant Vietnam, with STD & S Co., Ltd. retaining a 30% share in the subsidiary.