Shandong Yitai Bocheng Chemical has invested 755 million yuan to develop a production facility capable of manufacturing 250,000 tons per year of high-end lubricant materials

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In early September, the 250,000-ton/year new fluid lubricant material project invested in by Shandong Yitai Bocheng Chemical Technology Co., Ltd. at 755 million yuan has completed its preliminary design review and officially entered the construction phase. Leveraging the coal chemical industry resources of Inner Mongolia Yitai Group, this project will produce high-value-added products such as premium API III/III+ grade base oils and food-grade white oils. The project is located in the Qilu Chemical Industry Park, Jinshan Town, Linzi District, Zibo City, Shandong Province, covering an area of 142.62 mu, with a construction period of 12 months. 01 Project Background: Yitai Group’s Strategy for Expanding Its Industrial Chain. As a leading coal enterprise in China, Inner Mongolia Yitai Group has been actively working to promote the transformation of the coal chemical industry as well as the expansion of its product portfolio. It is against this backdrop that the 250,000 tons per year new fluid lubricant material project was developed. Shandong Yitai Bocheng Chemical Technology Co., Ltd. was established in December 2024 and is located in Linzi District, Zibo City, Shandong Province. It was jointly invested and constructed by Inner Mongolia Yitai Coal Co., Ltd. and Shandong Boneng Investment Co., Ltd., with Inner Mongolia Yitai Coal Co., Ltd. holding 80% of the shares and Shandong Boneng Investment Co., Ltd. holding 20%. This project makes full use of Yitai Chemical’s existing plant and product resources, and by conducting market demand research, it determines the direction for expanding the product portfolio. 02 Investment scale: The total investment amounts to 755 million yuan, of which 26 million yuan is allocated to environmental protection measures. According to public information, the total investment for the 250,000 tons per year fluid lubrication materials project is 754.68 million yuan (approximately 755 million yuan), with 26 million yuan going toward environmental protection efforts, accounting for about 3.44% of the total investment. This level of investment demonstrates Itai Group’s emphasis on the field of high-end lubricant materials. The project covers an area of 142.62 mu and is located within the Qilu Chemical Industry Park in Jinshan Town, Linzi District, Zibo City, Shandong Province. On July 25, 2025, the project held a basic design review meeting, adopting a \"five-site parallel review\" approach, with reviews conducted in various specialized groups such as process, thermal engineering, storage and transportation, and equipment. 03 Technology and Process: Hydrogenation of FTO wax to produce high-end lubricant materials. The project involves the construction of a 200,000-ton/year FTO wax hydrogenation plant, a 50,000-ton/year hydrogenation plant for food-grade white oil, and a packaging workshop for food-grade white oil. The core of this technology is to further process the FTO wax products produced by Yitai Chemical’s oil processing facilities using hydroisomerization techniques, in order to convert them into base oils of API III/III+ grades as well as specialty oil products with higher added value. The project includes supporting facilities such as hydrogen delivery pipelines, above-ground flares, tank farms, substation stations, air compressor stations, circulating water stations, refrigeration stations, fire pump stations, and a central control room. Approximately 100 units of new equipment such as reactors, towers, heat exchangers, and compressors will be added. 04 Product structure: Upon completion of the project involving various high-end lubricant materials and food-grade white oil, it will be capable of producing a range of high-end lubricant products and food-grade white oil on an annual basis. The main products include: about 16,000 tons per year of naphtha, about 33,000 tons per year of specialty alkane cleaner Type I, about 67,000 tons per year of base oil 3cst, about 44,000 tons per year of base oil 4cst, and about 13,000 tons per year of base oil 6cst. Regarding food-grade white oil, the production volume will be approximately 30,000 tons per year for food-grade white oil 10#, around 10,000 tons per year for food-grade white oil 68#, and about 10,000 tons per year for food-grade white oil 100#. All products will be delivered for pickup. 05 Source of raw materials: All are purchased externally to ensure the stable operation of the project. The main raw materials used include FTO wax, hydrogen, industrial white oil 68#, and industrial white oil 100#; all of these materials are sourced from external suppliers. This arrangement ensures the stable operation of the project, while also reflecting the synergistic effects of internal resources within Yitai Group. Ferto wax, used as the main raw material, comes from the oil processing units of Yitai Chemical Company. 06 Environmental Protection: Comprehensive environmental protection measures are taken to minimize environmental impact. The project attaches great importance to environmental protection, with investments in this area amounting to 26 million yuan. The wastewater generated by the project mainly includes production wastewater such as the water separated from the top of the stripping tower, the water separated from the top of the atmospheric pressure tower, and the water separated from the top of the vacuum tower, as well as wastewater from floor washing, discharges from the circulating cooling water system, initial rainwater, and domestic sewage. For these wastewater streams, the project adopts a classified treatment approach. Oily wastewater, surface washing wastewater, and wastewater from the circulating cooling water system undergo oil separation in the plant’s oily wastewater tank before being sent to the Jinshan sewage treatment plant for further treatment. For waste gas treatment, the flue gases from the project’s heating furnace are discharged through a 40-meter-high exhaust stack, while the waste gases generated during loading and unloading, as well as those from the storage tanks, are collected and then treated via an oil and gas recovery unit along with incineration in the heating furnace. 07 Project Progress: Approval processes have been completed and the project is about to enter the construction phase; multiple approval procedures have already been finished. On July 16, 2025, the project received an administrative license decision from the Zibo Administrative Approval and Service Bureau, approving the soil and water conservation plan. On August 8, 2025, the Zibo Ecology and Environment Bureau accepted the project’s environmental impact report. On September 1, 2025, the Zibo Ecology and Environment Bureau published its approval comments on the project’s environmental impact assessment document. On July 25, 2025, the company held a review meeting for the project’s preliminary design. Shandong Sanwei Chemical Group Co., Ltd., the company responsible for the design, presented a comprehensive report to the group’s leadership and review experts on the project’s overall plan, core processes, and innovative design concepts. 08 Market Prospects: The high-quality category III lubricant base oils and food-grade white oils produced by these projects to meet the demand for high-end lubricant materials will satisfy the domestic market’s needs in this area. Food-grade white oil is widely used in the food processing, cosmetics, and pharmaceutical industries. Used for food glazing, anti-sticking, defoaming, sealing, and polishing, as well as as a raw material in cosmetics and pharmaceutical products. Once completed, the project will enable industry upgrading and promote high-quality development. 09 Strategic Significance: Driving the industrial transformation of Yitai Group. The 250,000 tons per year project for new fluid lubrication materials is an important part of Yitai Group’s transformation in the coal chemical industry. By extending the product chain, increase the added value of products and enhance market competitiveness. The project employs \"lean design\" to drive \"intelligent manufacturing upgrades,\" aiming to create a benchmark project in the industry that is technologically advanced, safe and reliable, and highly efficient. This will not only help Yitai Group achieve industrial upgrading but also contribute to the local economic development. The successful completion of the project’s preliminary design review marks the official end of the preparation phase for the Yitai Bocheng 250,000 tons/year new fluid lubricant material project. The project construction period is 12 months, with completion and operation expected in 2026. The project employs \"lean design\" to drive \"intelligent manufacturing upgrades\", aiming to create a benchmark project in the industry that is technologically advanced, safe and reliable, and highly efficient; high-quality base oils for category 3 lubricants as well as food-grade white oils are used to facilitate industry advancement.