Shell Strengthens Its Industrial Footprint in Indonesia with a New 12,000-Tonne Grease Manufacturing Plant.

Driven by rising domestic demand, Shell is expanding its grease manufacturing capabilities in Indonesia with a new production facility located at its Marunda lubricants complex in Bekasi. With an annual capacity of 12,000 tonnes, the plant is primarily designed to serve the domestic market, where demand is already reported to exceed available production capacity. The investment highlights the growing importance of industrial greases within the broader lubricants market.

A Strategic Investment to Meet Growing Domestic Demand

Shell has taken another step in strengthening its lubricants business in Indonesia with the launch of a new Grease Manufacturing Plant (GMP) at its Marunda industrial complex in Bekasi, near Jakarta.

With an annual production capacity of 12,000 tonnes, the facility complements Shell’s existing Lubricants Oil Blending Plant (LOBP) at the site. It also represents a significant addition to the company’s global grease manufacturing network.

The investment is primarily aimed at meeting increasing demand in the Indonesian market. According to Shell, domestic demand already exceeds the production capacity of the new facility, underlining the importance of expanding local manufacturing capabilities.

By producing closer to its customers, Shell aims to strengthen supply reliability, reduce dependence on imported products and respond more effectively to the specific requirements of Indonesian industrial customers.

Advanced Technology for Demanding Industrial Applications

The new facility will manufacture greases from Shell’s Gadus product range, which is designed for a wide variety of industrial applications, including bearings and gear systems.

These products play an essential role in maintaining the performance and reliability of industrial equipment, particularly in operating environments involving high temperatures, heavy mechanical loads and challenging working conditions.

The plant incorporates advanced manufacturing technology, including a contact reactor designed to improve production consistency, process stability and overall manufacturing efficiency.

Products will be supplied in several packaging formats, including drums, pails and flexible pouches, allowing Shell to address the requirements of different industrial customers.

Mining, Steel and Manufacturing Drive Demand

Several industrial sectors are expected to contribute to demand for grease products in Indonesia. These include mining, steelmaking, agriculture, construction and manufacturing.

The mining industry represents a particularly important market, as heavy-duty equipment such as excavators and bulldozers relies on specialised greases to protect bearings and other critical components. Effective lubrication helps reduce wear, minimise equipment downtime and improve operational reliability.

In the steel industry, lubricants must withstand demanding conditions, including high temperatures and heavy mechanical loads. Agriculture and construction also generate significant demand due to the intensive use of machinery and mobile equipment.

Meanwhile, manufacturing facilities require reliable lubrication solutions to ensure the continuous operation of production lines and industrial machinery.

This diversity of applications reinforces the strategic importance of developing local grease manufacturing capabilities.

Domestic Supply Takes Priority Over Exports

For Shell, the immediate priority is to serve the Indonesian market. The company has indicated that the new plant’s annual capacity of 12,000 tonnes will not be sufficient to meet the full level of domestic demand.

Consequently, its initial strategy focuses on local production for local consumption, strengthening supply security and improving responsiveness to customers.

In the longer term, however, Marunda could potentially develop into a regional manufacturing hub serving other Asian markets. Any expansion towards exports will depend on future demand, available production capacity and the competitiveness of the facility.

The Indonesian government also supports this ambition, with the objective of positioning the country as a regional centre for grease manufacturing.

A Growing but Difficult-to-Quantify Global Market

Shell’s investment comes at a time when the global lubricants industry is experiencing relatively moderate overall growth, while certain industrial applications and regional markets continue to offer attractive opportunities.

According to comments from Shell Lubricants executives, global lubricants market growth is generally estimated at around 1% annually or below, depending on the market segment and geographical region.

However, this figure should not be interpreted as a specific growth rate for industrial greases. Available industry statistics do not provide a sufficiently consistent basis for accurately quantifying the global growth of the grease segment independently.

Nevertheless, demand remains supported by industrial maintenance requirements, infrastructure development and the continued use of heavy machinery in mining, construction, agriculture and manufacturing.

The Asia-Pacific region is particularly important in this context, benefiting from industrial development and growing demand for high-performance lubrication solutions.

Marunda Strengthens Shell’s Position in Asia

The new 12,000-tonne grease manufacturing plant further strengthens Shell’s industrial presence in Indonesia and supports the company’s strategy of expanding production capacity closer to key markets.

The investment builds on the development of the Marunda lubricants blending facility, whose capacity was increased to 300 million litres annually in 2022, compared with 136 million litres previously.

Beyond increasing production capacity, the project reflects a broader industrial strategy focused on securing supply chains, improving customer proximity and meeting the increasingly demanding technical requirements of industrial users.

Although the Indonesian market remains the immediate priority, Marunda could eventually play a broader role in Shell’s Asian manufacturing network, depending on the evolution of regional demand and future production requirements.