G.V.K. Raju, regional head for East Africa, Aspam Energy, said, Our established office in Nairobi will act as a springboard to Gulf Petrochem for the sale of downstream products especially fuel oils, base oils and bitumen. The acquisition provides us a channel, through our newly acquired retail fuelling stations, for the sale of all petroleum products like liquefied petroleum gas, fuel oil, bitumen, base oils and lubricants, in particular.

Essar hitherto owned 50 percent equity in a Mombasa oil refinery now owned by the Kenyan government. Essar pulled out in November 2014, citing lack of economic viability in the joint venture. Besides the refinery and a gas station, Essar did not command a strong market share of the Kenya market, according to an industry source in Kenya.

Raju told Lube Report in an email interview that Gulf Petrochem has plans to set up grease and lubricant blending plants in both Kenya and Tanzania. However, he noted that it is vital for the group to first introduce its Ipol brand of lubricants and greases, which is reputable in the industrial lubricant segment, to the African market.

We have plans to launch our entire line of traded products also into East Africa, said Raju.

While Africa is in the companys business projection, Raju said, Our long-term plans are to set up and develop fuel stations in Tanzania, Uganda and Rwanda, subject to the regulatory framework of each country.

He also disclosed that prior to the acquisition of Essars refinery, Gulf Petrochem did not hold any equity in Essar Petroleum East Africa Ltd.

The entry of Gulf Petrochem into the Kenyan market is expected to increase competition in the lubricants and greases market in Kenya. Joseph Ndugu of Lubes Africa, a trade magazine about the continents lubricant industry, concurred that the entry of Gulf Petrochem will impact the local market as they try to acquire end user customers.

However, another industry source told Lube Report the impact will not be felt in the near term.