While it remains a major player in the East African market, it is seeking a substantial position in West Africa and is leaving nothing to chance. In June LubesnGreases visited Oryx Energies automated blending plant in Togos Lome Free Trade Zone to learn how the company is positioning itself for the West African lubes market.

Africa Rising

In the shifting global economic climate, Africa is the new bride of the business world. With stagnating economic growth in Europe, many forward-thinking business concerns are looking for opportunities in Africa.

Oryx Energies appears to have come to this realization a long time ago. Though based in Geneva, Switzerland, its activities have been in Africa since its founding more than 25 years ago. Its lubricant business has operated a blending plant in Tanzania since 1999. The opening of the Togo plant is a strategic move to make the company a major player in the lubricants market in sub-Saharan Africa, said Guillaume Desenne, general manager of lubricants and mining at the time of the visit. (Desenne has since left the company and been replaced by Sebastien Sarrazin.)

We knew that to expand our lubricants business in West Africa, we had to invest in production and expertise close to the market, said Desenne, and the opening of our plant in Togo in June 2011 reflects our ambition to expand in the region. The Togo plant, with an installed capacity of 20,000 metric tons per year, manufactures a variety of products, both conventional and synthetic lubricants, marine lubricants, rail oils, automotive lubricants, gear oils and other industrial lubes.

The plant has a 9,000 ton tank farm with four base oil tanks connected directly to the Lome seaport by a 20-centimeter, 2-kilometer-long pigged pipe. The line is pigged, Desenne said, to eliminate cross-contamination and to help clean the pipe to remove residual oil.

A connecting rack takes base oil from the tank farm to the production area where it is blended. The plants finished production goes into 14 tanks that can store a total of 365 tons. Desenne said, The key to making quality lubes is to have a high level of homogeneity in the mixture. This is the reason that specific oils have dedicated lines, filters and pumps.

Products in the dedicated tanks include hydraulic oils, marine engine oils, gear oils, automatic transmission fluids, small engine lubes and two-stroke engine oils. There is also a drum assembly plant. Since January we have had zero percent non-conformity, Oryxs plant manager claimed.

Desenne described the plant as a state-of-the-art facility that uses the latest technologies and a high level of automation to ensure a modern, flexible and safe environment with the highest standards of product quality and traceability. He said that the entire process is automated from raw material reception, to additive dosing, to transfer and filling lines, to the loading of finished products onto trucks or ships. The filling lines are semi-automated, but this was a conscious decision Oryx Energies made to increase employment.

Desenne said that the plant is in the process of being certified to ISO 9001 and 14001. The external auditor is SGS Inspection, and Desenne added that Togos environmental agency is very strict. We did an environmental impact assessment that we presented to the environmental agency in a day-long session. Then, they audited the plant before we started, Desenne said. The plant is audited every two years for environmental compliance. In addition, he added, the plant produces virtually no landfill waste, and our impact on the environment is basically zero.

Desenne took pride in two features in the plant: the control system that ensures no off-specification product leaves the plant and makes each product and shipment fully traceable, and its ultra-modern laboratory that can perform analyses ranging from spectrography to particle counting. The laboratory also makes it possible for Oryx Energies to offer its customers used oil analysis and oil condition monitoring services, Desenne said.

Desenne claimed that the Togo plant is the most modern facility in West Africa. This is a clear differentiator, he said. Product traceability and our lab capabilities are the other key elements that give it a competitive advantage.

The plant employs 36 people, and was located in Lome, Togo, because the country meets Oryx Energies needs for a viable launch pad into the West African region. We were looking for a country that offered efficient port facilities, good connections with land-locked countries and a favorable environment for foreign investment, Desenne said. Togo fulfilled these criteria.

Lubricants a Central Strategy

Desenne said, The Togo blending plant is integral to the strategic objectives of Oryx Energies because lubricants are natural part of our value chain. With their strong technical component, lubricants are a significant brand builder for us and complement our other product and service offerings, especially for the industrial, marine and mining sectors. He added that the lubricants line is supported by the companys storage, distribution and logistics expertise, and its network of affiliates across the region.

Desenne noted that West Africa shares many of the opportunities and challenges of much of sub-Saharan Africa. It is benefiting from economic growth, which calls for extensive investment in energy, infrastructure and services to accompany its social and economic development. The region also has natural resources and is developing the capacity to transform them into value-added products, and the population has powerful aspirations for a better life. All this creates exciting opportunities, Desenne acknowledged. However, the region suffers from lack of infrastructure, access to quality products and services at the right price and basic commodities, factors that seem to suggest why Oryx Energies is in the region.

He added that Oryx Energies sup-plies products to 10 West African countries, from Senegal to Nigeria, through a network of affiliates that provides a range of products and services. We mainly market our products through [subsidiaries] in order to control the full value chain, Desenne said. Lubricants are specialty products, not commodities, and require trained professionals to promote and manage them. He emphasized that even when they sell through a partner, they ensure engineers from Oryx Energies visit customers and support their business directly.

In his assessment of the East and West African lubricants markets, Desenne said the standards and business structure in East Africa are more developed. He stressed that the East African lubes market is mostly based on British standards, and many countries have set rules for importing, selling and manufacturing lubricants. Standards organizations, he pointed out, are active in protecting consumers, setting minimum specifications and TBN levels, and controlling the quality of products on the market.

To my knowledge, there is no such effective organization in West Africa, outside Nigeria, Desenne said. He acknowledged that demand for low-tier products is comparatively high everywhere, but the minimum API specifications are higher in East Africa than in the west. West Africa prefers SAE 50 grades for engine oils, while SAE 40 is the preferred grade in East Africa.

While Oryx Energies says it imports additives and base oils from Europe, which guarantees high quality, Desenne lamented the lack of product knowledge among end users. He further expressed worry about the competition, which exploits the lack of knowledge among end users and sells poorly refined base oil as lubricants. This can lead to engine damage and a lower life span for engines in countries where the population can ill afford to replace their motorcycles or cars very frequently. So, the end cost can be high, he added.

He was, however, quick to add that large industries and mines are closing the quality gap with their requirements for high-end lubricants, compounds and greases. This section of the market is where we are focused and the reason our plants increasingly blend synthetic oils or specially-formulated products to meet the specific needs of individual customers, Desenne said.

Target Markets

We serve a broad range of customers, Desenne said, including car owners, large marine vessel operators, railroad companies, power and cement plants, sugar companies, mines and quarries. Oryx Energies largest mining customers include gold, copper, iron, uranium, diamond and platinum mines, operating open pits and underground sites.

We lubricate any type of equipment, from hydraulic systems to complex transmission systems and large gearboxes, with mineral oils, synthetic fluids and greases, he said. We even produce zinc-free engine oils for marine or railroad applications. He also disclosed that Oryx Energies seven fuel terminals across Africa, its extensive distribution network and its lubricants product line position it particularly well to supply the mining industry.

Our fully-integrated, high-end products and services naturally fit their requirements, he said. We are spurred on by the fact that more modern equipment is coming into Africa. This poses a number of challenges for Oryx Energies customers in terms of maintenance, operations, fuel quality, lubricant performance and fluid cleanliness, which are yet to be fully addressed.

Desenne feels that Oryx Energies has the requisite experience, expertise and commitment to help its customers overcome these issues. We offer a high level of product and service quality and reliability, and have developed a specific portfolio of services to respond to their needs. He said current trends involve the incorporation of clean fluid management and remote equipment condition monitoring, including exhaust gases. There is also a push to lower greenhouse gas emissions and on top of everything a desire to keep maintenance costs down.

The marine lubes business is global, Desenne said, and I think the future will see the emergence of a number of new actors, such as national oil companies, large bunkering companies and independent blenders alliances. He added that the company is well positioned in the marine lubes market and is supported by its affiliation with the Sealube Alliance network. It currently services six of the main East and West African ports and recently reached a manufacturing and distribution agreement in South Africa.

Desenne disclosed that Oryx Energies will open a strategic oil and gas terminal in Las Palmas in Spains Canary Islands at the end of 2013. The new terminal, he said, will not only provide a reliable supply of oil and gas products along the West African coast, but will also offer marine lubricants from its plant in Togo, further expanding its position in the segment.