Morocco, Egypt Making More Lubes

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Morocco, Egypt Making More Lubes
A man works on a car on the assembly line of a plant in Cairo, Egypt. © REUTERS / Mohamed Abd El Ghany - stock.adobe.com

North Africa’s lubricant production – primarily in Egypt and Morocco – can help meet Africa’s growing demand in industries such as power generation, cement, road building, steel and auto making and general manufacturing, an Egyptian blender said recently.

“Today, Egypt has a solid chance in penetrating central and east Africa,” Rami Kinanny, managing director for HiTech Oils & Grease, said during a presentation, “North Africa: What role does the region play in the African continent?” on Oct. 13 during the ICIS African and Middle Eastern Base Oils and Lubricants Virtual Conference. “I believe we will be seeing a lot more products blended in both Egypt and Morocco penetrating the African market.”

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Morocco has come a long way in lubricant production facilities, he said. “Back in 2014, only 400 [metric] tons were blended locally in Morocco, Two years later, they increased that 400 tons to 30,000 tons. Today Chevron alone produces 30,000 metric tons annually in Morocco. So the market is huge, and the production capacity is huge. They’ve invested a lot in that segment specifically to cater to West African nations.”

In Egypt, a variety of oil majors have been present as blenders for many years, he said. According to Kinanny, HiTech’s own KinZoil blending and packaging plant makes 500 tons per month of grease, as well as fluid lubricants. He said the country has over 10 blending facilities with large capacities.

North Africa – Egypt especially – has invested heavily in infrastructure in recent years. He noted the country has built 8,200 kilometers of roads over the past seven years.  The country has seven container ports, three bulk ports and four more to be delivered in 2022. A new electric train for passengers and commodities is under construction between Ain Sokhna in Egypt and Libya.

That infrastructure development and automobile manufacturing are two main drivers of lubricant demand throughout Africa, he said.

In 2019 Morocco became the largest car producer in Africa, Kinanny noted. Morocco is a manufacturing hub for European brands such as Groupe PSA and Renault-Nissan. According to Kinanny, Morocco aims to produce 500,000 cars this year and plans to produce 1 million cars per year by 2023. He said the country’s automobile manufacturing base will witness increasing demand and will target 14 West African countries.

“Vehicle manufacturing is a big part of the Egyptian economy today,” he added. “We produce passenger buses and electric trains with Chinse companies.” Egypt also has plants that produce tractors for Belarusian companies. Plants there also produce passenger cars for a variety of companies based in Europe and other countries, he added.

“There’s going to be a lot of infrastructure being done, so they’re going to need power plants, transformer oils, turbine oils,” he said.

“A lot of passenger cars are being sold,” he said. “The [gross domestic product] of so many countries is going up, so more people are going to be buying more cars, more roads are being built, and more trucking will take place. This will require engine oils, hydraulics, gear oils.”

With more manufacturing taking place, he added, a lot of industrial oils will be needed as well.

“So you have a huge portfolio of all kinds of lubricants that will be needed in Africa,” Kinanny said. “There’s not just one specific kind or one specific segment that will be focused on. Africa will be able to absorb all kinds of lubricants that can be produced.”

Although Africa is the poorest continent in the world, he said, it is home to much of the world’s raw materials that are in high demand, including in agriculture, mining, fishing, oil and gas.

“Developing sectors are banking, consumer goods, construction, telecommunications, manufacturing and electricity,” he said. “Many, many power plants are being erected as we speak.”

Africa’s population has almost tripled in the past 40 years, to 1.3 billion today, he said. According to Kinanny, continent’s biggest market advantage is its youth – 75 percent of Africans are below 25 years old. That represents “huge potential for consumption as well as production capacities,” he said.

Related Topics

Africa    Egypt    Finished Lubricants    Morocco    Region