EAST AFRICA FEATURE
East Africa: overview of lubricants
industry and growth potential
By Nyakundi H Nyagaka
E
ast African lubricants market is
set to grow in the coming years,
buoyed by a vibrant economy that
has been registering impressive
growth over the past decade. This is according
to a presentation made at the 1st Argus Africa
Base Oils and Lubricants Conference by Mr
Ohana, who is the Managing Director of
Kenya-based oil marketer KenolKobil.
The region comprises of Kenya Uganda
Tanzania, Rwanda, Burundi and South Sudan.
With a combined population of 153.3 million
people over a land area of 1.82 million square
kilometres, the agricultural sector in the region
contributes over 20 percent of the regions GDP
added Mr. Ohana.
‘The average unweighted economic growth
for the region for the last decade has been an
impressive 6.4 percent,’ observed Mr. David
Ohana, noting that the manufacturing and
service sectors have been growing steadily over
the last decade.
‘G o i n g f o r w a r d , i n f r a s t r u c t u r a l
developments, service industry, mining, oil
exploration and mechanized agriculture will
act as catalysts for development. The East
African Community common tariff and free
movement will also enhance growth through
the trade benefits of economies of scale,’ he said.
Currently, the East African region consumes
over 100,000M3 of oil per annum, out of which
80 percent is blended within the region while
20 percent is imported. All the blending plants
operating in the region, says the overview by
KenolKobil, utilize group I base oils, with group
II base oils expected to gain interest as the price
difference between group I and II base oils
keeps on reducing globally.
According to Mr. Ohana, there is no single
base oil refinery in the region, forcing the
blending plants in the region to depend on base
oil imports from major refineries in Europe
and Middle East. These are supplied via co
–chartered vessels by various LOBPS. Some
base oils are imported in flexi tanks especially
by smaller Plants.
Further, he said there is no additive
production facility in the region as most
additives are sourced from major world
producers like Lubrizol, Infineum, Afton and
Chevron Oronite.
Only Kenya and Tanzania have blending
plants with Kenya’s installed annual capacity
being 110,000M3 with a utilization of 40
percent while that of Tanzania is 114,000M3
with a utilisation of 50% added Mr. Ohana.
“95 % of the grease used in the region is
Table showing overrall lubricants volume for four years in East Africa
2011
2012
2013
2014
KENYA (M3)
43,947
40,138
46,668
42,312
UGANDA (M3)
10,202
10,127
11,030
*11,800
TANZANIA (M3)
26,614
27,448
29,939
*32,040
RWANDA (M3)
1,020
1,104
1,140
1,200
Source: PIEA/PIPECOR, LNG EMEA, OMC RWANDA, EWURA data, Assimper
NOTE: Tanzania data for 2012 & 2013 is based on locally blended volumes
*Data estimated
Septmber 2015 • | Lubezine Magazine
imported from the middle east with only small
portion being blended locally in Tanzania at the
regions only grease blending plant owned by
fuchs petrolube “said Mr Ohana.
Like any other region in the world, the East
African community is also beset with some
challenges that are likely to impact negatively
on the growth of the region’s economy. Some of
these as identified in KenolKobil’s presentation
include political instability in countries
such as Burundi and South Sudan, inability
of governments to stamp out substandard
imports, risk of environmental degradation
through unsafe used oil disposal, corruption
and import tax evasion resulting in unequal
playing grounds, and the withholding of donor
funding in Rwanda, Burundi and Ugand