Navigating Tanzania’s lubes market: Mr. Nagesh’s perspective

Would you kindly tell us about yourself and 1 your journey in the lubricants industry?

Iam a Chemical Engineer with an MBA, and I have been active in the industry since 1990.

I joined the lubricants industry with Castrol in 1994, and Iworked for 14 years. Then I worked with Gulf Oil International in India for a good stint and in 2015, I joined Oryx Energies Tanzania as a Lubricants Manufacturing and Supply Chain specialist. From the start, I have seen professional growth, as well as transformation in the industry through the 90s and the new Millennium. Castrol and other leading brands like Shell, Valvoline, TotalEnergies, Gulf, Servo the lubricants brand of Indian Oil Corporation have made exploits in the very competitive Indian market. Non-conventional and performance lubricants proliferated in the large and emerging markets of automotive, industrial and power sector. Offers, value propositions, positioning strategies and refinement of practices, technology in manufacturing, outsourcing, logistics and planning systems evolved a lot.

Sectors of mining, construction, transportation and power are now active in the East Africa region. The competitive market positions global majors against local ones. With the help of transnational marketing companies, it creates aunique pattern within the business to customer (B2C) segment and I think it is great.

2 As the Lubricants Manufacturing Specialist, what does your work entail?

I help to maximize business performances by providing the best customer service, based on quality products, coming from a safe, reliable, cost effective, and efficient manufacturing and supply chain.

What is Oryx Energies footprint in Africa 3 and what market segments does it serve?

Oryx Energies serves East and West African Regions and a part of the South. Tanzania being the largest African market, it covers close to 21 countries. Our business to business (B2B) segment includes the mining industry, in Tanzania and Zambia. It also includes marine, transport, power, construction, sugar mills, cement, food, beverage, and agriculture with an impeccable track record. Our B2C segment comprises our network of Company Owned Distribution Operation (CODOs). They are spread across the country to enhance the reach, distributing full range of automotive and industrial products. The Oryx Energies network of service stations across Sub Saharan Africa are also outlets for lubes. Our World class manufacturing plants in Tanzania and Togo, are well located to support this large footprint.

4 What product ranges does Oryx Energies have for the mining segment and what other services do you offer your clients?

We have several ranges: automotive and industrial lubricants, greases, coolants, and other specialties for the mining sector. Products are formulated with Group II, III and IV base oil that makes them high performance for critical applications at the mines. The service offer is end-to-end, starting from survey and prescription, product realization, Vendor managed inventory systems, managing life cycle of lubricant and dispensing to use to monitoring and timely replacement, and safe disposal of used lubes.

5 You have been involved in setting up blending plants, what makes up an efficient blending plant?

An efficient blending plant must consider adequate bulk base oil storage, with automatic tank gauging for perpetual inventory monitoring and controls. Additives, packaging and finished products require a well-planned warehouse, as well as an integrated sequence of logic controlling PLC (Programmable Logic Controller) and SCADA (Supervisory Control And Data Acquisition) based automation for the blending. To provide robust and accurate filled packs, we also need automatic or semi-automatic filling machines. Integrated ERP(Enterprise Resource Planning) and WMS (Warehouse Management System) will help transactional processes and inventory, order management and delivery system. Quality control and technical testing require good laboratory equipment for analysis. In addition to plant safety, operating and maintenance SOPs (Standard Operating Procedures) are essential to have a reliable plant. It enables high OEE (Overall Equipment Effectiveness), 100% First time pass rates of batches, high IFOT (In Full on Time service), zero processing waste and non-conforming stock generation, optimal inventory and a smooth supply chain.

6 Could you tell us about the Oryx Energies’ automated lubes blending plant and how the experience is of using it compared to when it was manually operated?

An automated blending set up is a step towards modernization and substantially enhances controls and traceability. It is an intensive application of PLC for sequence automation and distributed control, combined with SCADA, to help in efficiency, traceability, and controls. This serves as a significant enhancement from a manually controlled plant. It ensures the high product quality and process standards.

7 What would make an Oil Marketing Company (OMC) choose Oryx Energies Tanzania as its lubricants toll blender?

Oryx Energies provides a world class manufacturing and supply chain service. We are offering quality, process standards, optimal sourcing of base oil and additives. We also help increase the demand by supplying reliable planning, high level service and cost-efficient conversion. This fosters sales, lasting business and distribution.

8 What is your view regarding the coolant market in Tanzania and how is Oryx Energies plant positioned to take care of the needs of this market?

Oryx Energies has a world class facility to cater all possible types and ranges of coolants, and in all packs and sizes. As a lot of substandard products have unreasonable market footing, the coolant B2C market needs proper regulation. We need regulatory governance around both manufacturing and imports. TBS (Tanzania Bureau of Standards) needs to define optimal standards to fulfill the market needs. On its side, FCC (Fair Competition Commission) needs to tackle reported defaulters. B2B market is more OEM (Original Equipment Manufacturers) recommendation driven and better aligned to existing standards.

Oryx Energies serves East and West African Regions and a part of the South and Tanzania is its largest market. It has two lubricants manufacturing plants in Togo and Tanzania.

9 What are some of the challenges you have encountered in Tanzania’s lubricants market?

Counterfeiting! It has affected most of the brands over the world, and Africa is not an exception. When high price and inflationary situations happen, cheaper products from other global envelopes, based on low index of raw materials and from free trade zones, invade markets. Substandard products make their way into the market clandestinely. EAC (East African Community) and Revenue Authorities have taken actions to exempt import duties on base oil and it is a good initiative. If additives are exempted as well as import duties on finished product enhanced, it will help local manufacturers more. The congestion at port is another challenge. It is added to demurrages on chartered vessels and additional storage costs on dry cargos when storage time limit is exceeded, due to a tight port infrastructure.

10 You have worked in Asia’s and Africa’s lubricants market, what are the similarities and differences in these markets?

Structures, features of B2C channels and route to market have both similarities and differences. Asian markets are bigger and have more standards and high-end products. Automotive OEMs are also extensively present. With NOCs (National Oil Companies), the competition is tougher, but there are less channel conflicts in B2C as the market is more structured and controlled. The route to market is the same, from the manufacturer to a bunch of resellers, to the final retail counter. In terms of sales volume, Bazaar or High Street sales are more important than Forecourt sales in both markets for B2C lubricants. In West Africa, a large part of market is cluttered with a wide range of imported products, but it is not the case in East Africa.

Plastic recycling in lubes is still a challenge. Asian markets prefer plastic packages over metal. In Africa, we can see monograde lubes in metal packs in the retail market. Multigrade lubes are more often packed in plastic. In East Africa there is a developing awareness on environmental issues such as plastics reduction and recycling. Below a certain gauge, films are banned from usage. Asian markets are more environmentally compliant as they have created a distinct market for re-refined used oils. It is a circular economy. Africa is still to reach there though; some re-refining units have started to operate. .