Despite the fact that flexible packaging has gained traction in recent years, East African lubricant companies still use a mixture of flexible and rigid packaging in the fast-changing market. East Africas market is highly competitive with international manufacturers and local marketers fighting for the same automotive and industrial customers.

Interest in the regions lubricant market is influenced by the growing auto industry, industrial development and increasing investment in mining, agriculture and infrastructure. Consultants at KPMG said a jump in East Africas economy and an expanding middle class are fueling a growing and changing regional auto industry. In its 2014 report, East Africas Changing Auto Industry, KPMG stated, New designs are forthcoming, new manufacturers and sellers emerging, new facilities being built, and an old player returning, with everyone wanting a foothold in this hungry and expanding market.

Kenyas National Bureau of Statistics Director General Zachary Mwangi said in the 2015 Economic Survey, Registration of motor vehicles has maintained an upward trend since 2011, adding that new vehicle and motorcycle registrations jumped 9 percent from 2013 to 2014. The increase spurred greater lubricant consumption by heavy-duty trucks, station wagons, buses and coaches. Similar trends were observed in Tanzania, Uganda and Rwanda.

Apart from the automotive and industrial markets, lubricant companies are eager for a share in public works projects, especially with increasing investment in mining, infrastructure development, agriculture, marine and aviation. The companies are also active in the specialties segments of metalworking, solid lubricant films and greases.

Importance of Packaging

The regions lubricant companies in are pushing to grow market share by focusing on their packaging to suit various consumers, who are keen for packaging with sleek designs and attractive labels. Lubricant brands in the region come in a variety of packaging, with some companies preferring efficiencies such as easy opening and reclosing; detailed product information, including its use and storage; and disposal of the packaging after use.

In its report Unwrapping the Packaging Industry, London-based Ernst & Young said that concerns over the impact of packaging on the environment would lead to a reduction in the amount of raw materials used in packaging. Given the increased volatility in raw material prices over the past few years, and increasing concern over the environmental impact of packaging, it has become extremely important to cut the amount of raw material used in the production of packaging, both for packaging producers and their customers, the firm stated.

The majority of companies package their lubricants under their own brand names and sell them through service stations, automotive accessory retail outlets and resellers. Total, KenolKobil and Oryx have lubricant blending plants in the region and, therefore, play a wider role in lubricant packaging than smaller competitors who supply imported brands. Both market leaders and small players prefer the widely used plastic oil bottle because it is moisture resistant, leak-proof and nontoxic.

The commonly used material for lubricant packaging in this market is high-density polyethylene in both flexible and rigid form. Cardboard and tinplate are also used. A large percentage of the brands are packed in small quantities for light commercial trucks, motorists, resellers and a small network of retailers.

No precise statistics are available on the role packaging, especially fast-growing flexible packaging, plays in East Africas lubricants market. However, market researchers and analysts say the impact of packaging on sales is great and universal.

KenolKobil, whose lubricant brands include Kenol, Kobil and Castrol, said it packs its automotive, industrial and construction lubricants, specialties and greases in 1,000-liter plastic drums and steel barrels, and 210- and 20-L plastic packs. Other categories include 5-, 4-, 1-, 0.5- and 0.25-L bottles packed in cartons.

BP said flexibility in its approach to packaging Castrol-branded lubricants means the product can be supplied using a range of different options, including packs that can work at very high pressures and tanks that can hold lubricants at very low temperatures.

Total Kenya packs its lubricants in various sizes, including 1- and 5-L bottles. The company said, Packaging is conceived to meet both ecological and user-friendliness requirements. The company also reported that up to 15 percent of the packaging material it uses is recyclable high-density polyethylene, and that it restores and reuses its packaging pallets and containers.

Drawing Attention

Ernst & Young reported that many companies realize that effective packaging can actually increase sales, and this understanding would influence the performance of the packaging market itself. In emerging markets such as Africa, innovative packaging is expected to grow as both increased consumption and demand for consumer goods drives the need for more sophisticated packaging, due to a growing middle class.

Nearly all lubricant marketers in East Africa are implementing marketing strategies that could help them to stand out from the crowd, including sleek designs and shapes and eye-catching labels for their lubricant packaging. These attributes could make a difference for a company in a crowded market such as East Africa.

The Castrol brand, for example, comes in various types of packaging, including small packs that the company says offer a high degree of versatility and flexibility. Its 5-L cans are equipped with telescopic tubes to ease oil pouring, while antiwave rings in tubes help control oil flow. Apart from being easy to handle, BP-Castrol said the small packs have a visibility line to check oil level and a multilanguage label to provide the user with product description in most languages.

The latest developments in packaging are helping shape the performance of lubricant blenders, suppliers and distributors in the East African market. Generally, we have seen a trend from rigid packaging to flexible packaging because of the lower investment costs, said James Hynd, vice president for Africa at Constantia Africapack Flexibles.

The shift to flexible packaging is attractive because it requires less material, generates less waste after use, requires less storage space and provides lower transportation costs. The development of the pouch industry has been a key success in products for liquids such as oils, with add-ons such as spouts. Flexible packaging can provide many looks and feels, depending on the combination of materials used in the lamination process, said Hynd.

He noted that international packaging companies such as Constantia have observed global growth in the use of flexible packaging versus rigid packaging. The company recently entered the African market with the acquisition of Africapack, after what it says was pressure from its global customer partners.

Ernst & Youngs report related that the market has seen a trend involving convenience features on packaging such as resealable closures, easy opening and stand up pouches. There is also a trend toward smaller pack sizes, which have already been introduced by Castrol.

Total Kenya has responded to this trend by providing packaging alternatives for customers who want smaller quantities of lubricants. If you perform your own oil change, you will need a 5-L container because the capacity of the sump is 4.5-L, but if you are topping off between oil changes, a 1-L container will suffice. It is practical, easy to use and cheaper, the company said.

Ernst & Young noted that packaging should develop more eye catching and colorful designs that enhance brand awareness and stand out on the shelf. Success in increasing sales and ensuring customer loyalty call for packaging that delivers new shapes, uses new materials [and] prints more colors in higher definition, said the consultancy. The real driver of innovation is the consumer, which means that packaging producers have to have well developed and collaborative relationships with their customers, who are closer to the end consumer.

For the African and East African lubricants market, the often quoted American Marketing Association statement, Differences in package excellence are directly translated into corresponding differences in sales appeal, is likely to shape trends in the coming years.