Libya Oil to Expand Its Investment in East Africa
Posted on :Friday , 11th September 2015
Libya Oil Ethiopia Limited, a subsidiary company of the Libya Oil Holdings Ltd, is to expand its investment and business in Ethiopia.
Two weeks ago the corporate management of Libya Oil Holdings held a week long meeting at Hilton Addis Ababa. The senior management team members came from the headquarters of the company, which is based in Dubai, UAE. Eighteen country managers from different African countries attended the high-level management meeting held in Addis Ababa in mid August.
Zekarias Wolika, sales and marketing manager Libya Oil Ethiopia, told The Reporter that after a week-long deliberations the management of the company has decided to make additional investments and expand its business in Ethiopia. According to Zekarias, the management made an assessment on Ethiopia's economic growth and agreed on the need to make additional investment and expand its business in Ethiopia. The planned investment is estimated at 150 million birr.
According to Zekarias, the management decided to build motor oil and lubricants blending facility in Ethiopia at a cost of 124 million birr. The company plans to establish an LPG distribution wing. Shell Ethiopia Ltd had an LPG distribution facility but sold the business to Ghion Industrial before it pulled out of the Ethiopian market.
Libya Oil wants to expand its bitumen supply business. "Considering the huge emphasis the Ethiopian government has given to the road sector development in the second Growth and Transformation Plan we want to significantly grow our bitumen supply capacity," Zekarias said.
Libya Oil has also the plan to engage in chemical supply business. "We are planning to supply chemical inputs to paint and plastic factories. For the time being we will import the chemicals but eventually we will manufacture them locally," Zekarias told The Reporter.
Libya Oil is working on the aviation fuel supply aggressively. The company claims to have a 42 percent market share in the aviation fuel market. According to Zekarias, the company supplies jet fuel to 30 international and local airlines including Ethiopian Airlines, its major customer.
Libya Oil entered the Ethiopian fuel distribution market in November 2008 after acquiring Shell Ethiopia Limited. Libya Oil has 143 fuel stations across the country-44 of them in Addis Ababa. The company has an annual turnover of 13 billion birr. Zekarias said his company is opening nine new stations every year. "We plan to have 185 fuel stations in Ethiopia by 2020 and we want to increase our market share to 30 percent from the existing 24 percent." The company will open nine stations every year.
Since its entry to the Ethiopian market in 2008 Oil Libya made an investment of 50 million birr on aviation fuel depot expansion and refueling machines, and the construction of the ethanol blending facility at Gottera (Akaki Fuel Depot). The company so far built only eight additional retail stations in the country. "This is due to the hassle to acquire plots of land. There was also a tax issue in connection with the acquisition of Shell Ethiopia Ltd. This tax raw has thwarted our growth in Ethiopia. Since this has been resolved now we are committed to expand our investment and business in Ethiopia," Zekarias told The Reporter.
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