With magnifying-glass concentration on specialty oils and bitumen products, Nynas AB emerged as a global force. The parent figure of international sibling companies, the Stockholm, Sweden-based corporation directs the familial mission: refinement and/or marketing to take oil further, meaning the applications are in long term use as well as environmentally friendly. Ninety percent of its sales and a large part of its production occur beyond national and continental boundaries.
As indicated by Mikael Arnestrand, Nynas’ head of supply chain for the Americas, the company’s Houston, Texas-based operations represent a crucial link, with a construction-in-progress hub (envisioned as a bulk liquid storage terminal with a customized design) that ultimately will engender efficient service for company depots situated in the United States and throughout the world. “We see it as not only a high-capacity storage facility but also a substantial upgrade to the corporation’s supply chain, with end products blended consistently with customer requirements,” says Arnestrand.
ALMQVIST’S MULTI-BILLION DOLLAR BABY
Nynas AB, a business-to-business operation, engineered its expansion via non-commodity specialty oil products and complementary technical service and application expertise. Recording recent annual revenues in the $2.5 billion range, it leads the global market for naphthenic specialty oils.
According to the company, Nynas refines from naphthenicrich crude oils because of their high solvency, low temperature properties, and thermal stability. Nynas also established itself as one of the largest European suppliers of bitumen, which is also produced by refining select crude oils.
The company dates back to the 1920s and the Swedish city of Nynäshamn, where founder Charles Almqvist established a local refinery that remains a pivotal part of the existing enterprise. Today, Nynas’ Nynäshamn refinery produces 7,800 barrels per day of naphthenic base oils.
In 1928, Almqvist’s newfound refinery received its first crude oil delivery. From that starting point, the business evolved into an ever-expanding organization that boasts administrative and production outposts throughout the world. These outposts ensure access to products and associated technical services and include corporate offices and distribution facilities in Europe, North America, South America, Asia, Africa, the Middle East and Australia, as well as four refineries (two in Sweden and two in Great Britain). Further, by forming strategic alliances with other specialty oil producers, Nynas has taken charge of supply points in Belgium, Germany, Finland, the United States and Curaçao.
The U.S. operations also include refineries and depots in Houston and Three Rivers in Texas, as well as depots in Long Beach, Calif.; Hammond, Ind.; and McKees Rock, Pa.
Once completed, the Nynas USA’s leading-edge blending/storage hub will include 25 tanks and 55,000 cubic meters. Further, hub construction flanks the Houston ship channel, one of the nation’s key shipping routes. As such, Nynas will not only be able to accomplish deliveries by the road and rail but also by seafaring vessels. This will accommodate maximum delivery flexibility.
Such advantages should foster business growth in the Americas and other parts of the world. The way the parent company sees it, this upgraded Texas facility will handle U.S. production output and readily accept deliveries from production units located in Sweden, Curacao in the Dutch Antilles, as well as from the company’s hub in Antwerp, Belgium (where Nynas recently increased storage capacity 20 percent in response to increased demand for tire oils and transformer oils). Further, the new hub’s projected parameters will adhere to Nynas’ safety, environmental and product quality standards.
To manifest its vision, Nynas contracted with Westway Terminal Company LLC, a subsidiary of New Orleans, La.-based Westway Holdings Ltd. that offers the latest technology for loading, unloading, mixing and infrastructure. “We chose them because we knew they understood our requirements and would construct an appropriately customized hub,” says Arnestrand.
These requirements included installation of product-dedicated pipelines, high blending capability and special loading facilities for sensitive, specialty oil products. Blending is a crucial component. “Going into this project, we changed storage providers. While we had a strong relationship with our previous provider, we were looking to build a facility that accomplishes more than just storage. We’re engaged in a great deal of blending, which is the final step in production,” explains Arnestrand. “As such, we needed related capabilities.”
As the company reports, Westway can provide the tanks, piping system and manifold that serve customers’ current blending and transportation requirements, and it can help Nynas easily and quickly adapt as needs change. Also, Westway will provide the necessary on-site personnel to help Nynas manage its upgraded facility.
The partnership with Westway is in line with Nynas’ strategy, says Arnestrand. “We’re always looking for new ways to satisfy our customer needs, and a large part of that involves finding the right partner who understands our goals,” he says. “We’ve entered into a long-term contract with Westway, as it’s providing the engineering based on our input for design. Specifically, our input relates to how the tanks are equipped, as well as heating requirements, dedicated lines and necessary facility needs.”
The project involves two phases, says Arnestrand. The first began in June 2009 and involved transitioning of transformer oils. The next phase is set to begin in the fall and involves transitioning of all other products. He adds that one-third of the tanks are currently in service and the remainder should be functional by early October 2009.
As a result, the entire Nynas organization can better serve customers, and that covers a lot of territory. Nynas is an efficient operation (20 people work out of the Houston office and only about 800 work with the mother company), but it is a truly global operation. Moreover, as Arnestrand points out, the client list includes some of the largest companies in the world.