October 29, 2020

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Chevron boosts stake in Morocco’s Afriquia Lubrifiants to 50%

Chevron boosts stake in Morocco's Afriquia Lubrifiants to 50%
Photo courtesy of Akwa Group

U.S-based Chevron Corp. is boosting its stake in Afriquia Lubrifiants, a subsidiary of Morocco’s Akwa Group, from 25% to 50%, 13 years after the two companies commenced their joint venture in 2006.

“Our partnership has strengthened over the years we’ve been working together. [The capital increase] will allow us to raise our standards and create new businesses,” said Adil Ziady, managing director of the fuels and lubricants division of Akwa Group, whose core shareholder is the Akhannouch family.

The Akwa Group, headquartered in Casablanca, is a USD3 billion business conglomerate and the first energy company in Morocco. Akwa is primarily engaged in the oil and gas industry, but operates also in the telecommunication, tourism, hotels and real estate sectors. With a presence in several market segments, The Akwa Group is organized to operate through its five main operating divisions: Fuels and Lubricants; Gas; Fluids; Development; Real Estate. It operates throughout the country with a broad commercial and logistics structure, distribution centers and large bulk fuels, fluids, LPG and growing base oil storage infrastructure.

Under the agreement, Chevron will manufacture Texaco-branded lubricants in Morocco and export them to 14 African countries by establishing a manufacturing plant in Jorf Lasfar, a deepwater commercial port located on the Atlantic coast of Morocco, that will also serve as its export hub for Africa. Exports of high quality lubricants are estimated at 600,000 tons annually.

Talks are underway to also establish retail agreements in Senegal and Côte d’Ivoire.

The new roadmap establishes new goals for the joint venture, both locally and internationally. Previously, Afriquia Lubrifiants could only produce Chevron’s mid-range quality lubricants. Moving forward, the company will also be able to manufacture premium lubricants locally, with access to Chevron’s Group II base oils. In April, Chevron signed a base oil distribution agreement with Société Afriquia Lubrifiants (SALUB), a subsidiary of the Akwa Group,  to supply Chevron’s premium base oils and process oils to Northern and Western Africa.

“We are very pleased to have the freedom to integrate the entire Chevron range into local production. They own all the technology,” said Mustapha Miri, managing director of Afriquia Lubrifiants. Chevron’s high-quality base oils will be incorporated into production in Morocco through products that meet global auto manufacturing standards and new environmental regulatory requirements.

In addition, the new roadmap outlines an expansion plan to sub-Saharan Africa.

Fourteen countries are specifically targeted, covering North Africa, Central Africa and West Africa. Operations have already been launched in five of the above-listed countries (Côte d’Ivoire, Burkina Faso, Cameroon, Togo and Niger). 

“We want to draw up agreements with local retailers and the overall potential has been tentatively estimated at 600,000 tonnes per year in these countries. Our partners from Senegal and Côte d’Ivoire are currently in Morocco to negotiate the clauses of the future partnership,” said Miri.

“We have prioritised certain countries where we would like to become leaders quickly, such as Senegal, Algeria, Cameroon, Côte d’Ivoire and Tunisia,” said Ali Redouane, Europe/Middle East business development and projects manager at Chevron Lubricants.

Afriquia Lubrifiants, owns a network of 560 service stations throughout Morocco, which gives it a total market share of 35% and the country’s largest storage capacity, with 980,000 cubic metres across Morocco. 

“Our new strategy with Chevron couldn’t arrive at a better time, just as our company is looking to expand in Africa,” Ziady said.

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