JOHANNESBURG - Blue Chip Lubricants, which is set to become the first majority black-owned lubricants company to blend and distribute a global brand, has established a new state-of-the-art blending facility and testing laboratory at Kaya Sands in Johannesburg.
The new facility will be blending lubricants from Q8Oils, which is part of the Kuwait Petroleum Corporation and one of the world’s largest oil companies with crude oil production levels of 2.9 million barrels a day.
Kathleen Marais, a director and currently the 100% owner of Blue Chip Lubricants, said yesterday that all of Q8Oils’ infrastructure was concentrated in Europe and having a blending facility located strategically in South Africa effectively gave Q8Oils a gateway into the larger sub-Saharan African market, an untapped region for its future expansion plans.
Marais said 51% of Blue Chip Lubricants was being acquired by black-owned lubricant distributor Lutramart Oils.
Sandile Koza, a director of Lutramart Oils, said he and managing executive Themba Mtombeni had been involved in the lubricants business for five years as distributors, but their mission had been to control the entire lubricant value chain by participating at a blending manufacturing level.
“This transaction effectively gives us that opportunity. This is the new phase of our growth in terms of our strategy. “With lubricants constituting a major expense for equipment intensive industries, such as mining and engineering, the fact that an international brand is now being blended locally on a large scale and in accordance with exacting international quality standards, together with all the local BBBEE criteria, is of immense benefit for local companies,” he said.
Koza declined to comment on the financing of the empowerment deal. Gary Marais, the managing director of Blue Chip Lubricants, said the new facility could blend 4million litres a month on a normal day shift.
“Considering the South African market is 22million litres, including exports, we are looking to capture an about 20percent market share,” he said. Marais said their licence agreement was to blend and distribute Q8Oils for the southern African region.
He said they had to upgrade their plant once they had secured the licence agreement and moved to a 25000m² property in Kaya Sands and built a new 2000m² factory and offices, which was funded fully by the Industrial Development Corporation.
He declined to comment on the cost of the facility. Kathleen Marais said there had only been limited job creation until now, because the new facility was being built and only starting operations in July, but they anticipated substantial job creation within the business going forward.
“Currently there are about 36 employees in the company, but we are looking, in the next year, to almost double,” she said. Koza said that with the help of Q8Oils they expected to grow its market share in the domestic market from about 1percent to between 15percent and 20percent in the next two to five years.
“There is currently no oil major that has a 51% black ownership component, which positions us very favourably. “We have got quite aggressive expansion plans."
- BUSINESS REPORT