Could you remind our readers of Chevron Oronite’s capabilities on Jurong Island, Singapore, and the broader Asia Pacific (APAC) ecosystem?

Our Jurong Island plant has been active since 1998 and has been in commercial production for more than 25 years as one of the largest lubricant additive plants in Asia. In APAC more broadly, Chevron Oronite has grown to become a market leader by focusing on establishing a reliable supply network in the region, supported by our world-scale facilities in Singapore and regional-scale facilities in Japan, China, and India. On the back of these four plants, we were able to withstand the successive supply chain shocks and disruptions in recent years, from the pandemic to the Texas Freeze which forced a sizeable number of our competitors to declare force majeure, leaving Chevron Oronite as the one of the few additive producers continuing operations. We also boast strong R&D capabilities, with the largest additive R&D center in the region, located in Japan. This R&D center supports the needs of OEMs, including Japanese carmakers, across APAC. We also have our Shanghai Technical Center which mostly supports the needs of Chinese OEMs, as well as serving as a field-testing hub. 

Chevron Oronite has won important awards in recognition of its innovations and efforts towards lowering carbon intensity. Could you share what these were?

Chevron Oronite has won the Product Development of the Year Award at the Fuel & Lubes (F+L) Asia Awards for two years in a row; in 2023 for our marine two-stroke engine technology, and this year for a state-of-the-art product used in heavy duty engines within the automotive industry. 

On the manufacturing side, we were honored to receive the “Excellence in Energy, Greenhouse Gas Management” award at the Energy Efficiency National Partnership Awards presented by Singapore’s National Environment Agency for our efforts to lower carbon intensity of operations and energy management. The cumulative updates we made in our Jurong Island plant allowed us to save about 4.5% of our annual energy use, with a carbon abatement equivalent of 3,700 tonnes of CO2e. 

What drove the most recent expansion at the Jurong Island plant?

Two years ago, Chevron Oronite completed an expansion project to bring in technologies for packages that we used to import from the US and Europe. This has further demonstrated our supply chain reliability and allowed us to navigate further global disruptions like the recent Panama Canal and Red Sea issues, which impacted shipping times and logistics reliability. Of course, we could not have predicted that those specific events were to happen, but what drove our investment is the recognition that APAC is a growth region where we can grow alongside our customers. Rather than reacting to volatilities, the expansion was part of our long-term strategy to continue delivering consistent, high-quality products in a reliable manner.

Could you comment on the performance of the company in 2023 and your outlook for 2024-2025?

APAC contributed significantly to our global profit, despite a drop in general demand in the industry. The positive performance is a result of our team working together on a robust cost structure to augment our profitability in a sluggish market – 2023 was a tough year for all. I would like to thank our team for ensuring we remain an important contributor to our global portfolio. 

Compared to last year, 2024 is trending in the right direction but there are still many volatilities to account for, from the Red Sea situation to conflict escalations in the Middle East, not to mention this will be an election year for many countries around the world.  On the other hand, a key factor driving an upward trend in APAC could be the Chinese government’s proactive fiscal adjustments and liquidity injections which I believe are strategic moves aimed at stabilizing the economy and restoring market confidence.  

While many developed economies slowing down, Asia is believed to deliver the next phase of growth for the global economy. What do you think?

Fundamentally, China and India together account for close to 3 billion people. ASEAN brings to this equation another 675 million people approximately, and with the Regional Comprehensive Economic Partnership (RCEP) bringing together ASEAN countries with China, Japan, South Korea, New Zealand, and Australia into a single trading bloc, the cumulative power of the bloc is bolstered through scale. These two core elements (demographic fundamentals and scale) make APAC a strategic growth region. One overlooked aspect is also stability, for as diverse as this region is, there have been no major wars in the last 30-40 years. 

In a highly competitive market, what best differentiates Chevron Oronite?

Our competitive advantage goes back to focusing on what our customers need - enduring relationships, innovative technology, and exceptional reliability – and these three are irrefutably connected: Chevron Oronite has been in the business for more than 107 years, making us a well-recognized and trusted name in the market. But this is not sufficient without the products to meet our customers’ needs so we make sure to focus on bringing the best additive technologies to the industry. Our competitiveness is also underscored by being backward integrated, as we manufacture a lot of intermediate chemicals ourselves.

Do you have a final message to share with our readers?

We are following our customers' needs in their energy transition journey by working to reduce the carbon footprint of our products, which also contributes to a lower carbon footprint along the value chain of our customers. For example, one trend that is rapidly gaining momentum is the use of re-refined base oils. We are seeing new mandates from countries like India, along with increased demand from finished lubricant customers, to use more re-refined base oils to lower a lubricant’s carbon footprint.  We now offer new additive technology specifically tailored to give the right performance in these re-refined base oils. Finally, we are also investing in products that meet the future performance needs of our customers, making sure that we formulate additive technologies compatible with new fuels like hydrogen, ammonia, or biodiesel.