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UK oil tools firm launches Chinese factory

Downhole Products Plc opens manufacturing unit in China, in a move which will spur the firm’s expansion into Asian and Middle Eastern markets.

UK oil tools firm launches Chinese factory
“Currently the Middle East & Asia are Downhole Product’s biggest expanding areas and it makes business sense to bring the manufacture of the required product to the area,” managing director for Downhole Products Ian Kirk told OGT

A UK oilfield designer has ventured into the Chinese market in a bid to boost current and new product lines to cater for the Asian and Middle Eastern markets, it emerged this week.

Downhole Products Plc, which specialises in casing accessories and completion tools opened a factory in China which will operate in conjunction with current manufacturing infrastructures in the UK and the US, it announced on Wednesday.

“Currently the Middle East & Asia are Downhole Product’s biggest expanding areas and it makes business sense to bring the manufacture of the required product to the area,” managing director for Downhole Products Ian Kirk told OGT.

Located in Xian, Central China, the factory covers 300,000 square meters and is ten times the size of Downhole Products’ headquarters in Portlethen, Scotland. The project has reportedly brought 200 jobs to the area, with an additional 100 to be recruited later this year.

“Most people would think that you would manufacture in China because of the supposed cost advantage, which does not apply in our case,” Kirk added. “We have done this in order to take advantage of the local engineers' mind-set.”

“We are still talking about people who would rather fix something rather than replace it. If we look at our Western Culture we used to be very good at this but have lost the engineering skills through time. Turning to China therefore gives us a commercial advantage over our competitors.”

Downhole Products is a subsidiary of US-based Varel International Energy Services, a manufacturer and distributor of specialty drill bits. Some of its products include guide shoes designed to withstand high temperatures encountered downhole and zinc alloy centralisers used in horizontal and extended reach wells.

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