By Tim Sullivan
 
The U.S. grease market has been shrinking for years, but one of its biggest suppliers is sprouting plants left and right. Chemtool Inc. last week announced the opening of a new plant in Elkhorn, Wis. In addition, officials said the company already intends to expand the new facility next year, along with its main grease plant in Crystal Lake, Ill.
 
As if that weren’t enough, Chemtool is developing plans to build plants in Brazil and China.
 
“We’ve had healthy growth, but it’s really been going on since 1992,” General Manager Dean Athans told Lube Report yesterday. “It’s been across-the-board [growth], and it’s mostly due to an aggressive sales force and expanding product lines.”
 
Not all of Chemtool’s growth is based on grease sales. The 65,000 square foot facility in Elkhorn will house production of die casting lubricants, water treatment chemicals and ceramic products, as well as 17,000 square feet of laboratory and administration offices. The new plant replaces three leased facilities – in Crystal Lake and Woodstock, Ill. – that the company is shutting down.
 
Still, Chemtool estimates that it is the largest grease producer in the United States and says that business is also growing. Athans said the company will expand its Crystal Lake facility – its main grease plant – next year. It plans a 150,000 square foot addition to the new plant in Elkhorn, likewise next year.
 
“The ceramics are a new product line, and it has had healthy growth since we started that two years ago,” Athans said. “But all of our products are growing, and that’s why we need all of this new space.”
 
Athans said it was too early to discuss specifics of the Brazil and China projects, but he explained Chemtool’s reasons for wanting to build in those locations. The company has a significant and growing business in Brazil, but tariffs to import add up to 85 percent of sales value. The company can eliminate most if not all of that cost by producing locally.
 
As for China, its market is becoming so large that in-country production is simply becoming a necessity. “It’s gotten so big that you almost have to have something there if you’re going to be a player,” Athans said.