In little more than a year, leading base oil distributor Penthol has gained a solid foothold in South Africa and established itself as a major supplier in the region. It is now providing independent blenders and lubricant manufacturers with API Group I base oils in a market filled with potential, says Clifford Classen, sales director for Africa.
“South Africa is a market that has fundamentally changed over the last year and we saw this as both a challenge and an opportunity,” he says. “In cooperation with a major Middle Eastern refining company, Penthol offers access to base oils from one of the biggest producers in the world.”
Until a year ago, South Africa had been almost entirely self-sufficient in terms of its base oil requirements, he says. Yet after the last of its base oil refineries closed in March 2022, the market become almost entirely import dependent.
Penthol, a trusted supplier of Group I, Group II, and Group III base oils worldwide, decided to seize the chance to expand into a promising new market.
There were, however, a few hurdles to overcome, notes Classen.
It is notoriously difficult to secure dedicated storage tanks in South Africa, he says, and rolling blackouts – or load shedding – have put additional strain on the already limited capacities. With the country’s growing dependency on diesel for power generation, the fuel often takes priority over base oils when storage tanks become available.
“Even though we have enormous experience in the North American and European markets in terms of base oils distribution, our first major obstacle was to find available storage,” he says. “We were able to use our contacts to find the tanks we needed, which gave us an entry point into the market.”
“We are a solutions-driven company and found a way to introduce premium base oils into the market to supply some of these independent lube blenders across the country.”
The response has been fantastic and Penthol has since grown its storage footprint to a relatively small – but significant – 10 million liters of capacity. It is also now offering a fixed tank supply service to some of the majors wherever they need supply in between their existing bulk shipments.
Within less than a year, Penthol has acquired 6% of the South African market – with further growth limited only by the current lack of additional storage capacity, he says.
Although Group I is still the dominant base oil in the country, Group II is growing and this is an area it eventually plans to develop.
Classen predicts great things for base oils in South Africa – and indeed, for Penthol. With blenders and end users demanding high-quality product from a reliable supplier, the business is eyeing ambitious growth and hopes to increase its market share to 20-30% within the next three years.
To find out more about Penthol and its base oils, visit the website or email baseoils@penthol.com.