KenolKobil Limited, a public company listed in the Nairobi Stock Exchange (NSE), will begin to construct a lubricants blending plant in Mombasa, Kenya. The plant is a joint venture with UK-based Castrol, which operates directly in more than 40 countries and is represented by third-party distributors in nearly 100 other markets.
Kenolkobil said that Castrol has approved its share of the investment in the KES 1.5 billion (USD 14.5 million) factory.
“Four weeks ago, we received notification that the head office of Castrol approved the budget for the project in Kenya,” said David Ohana, KenolKobil’s chief executive, during the release of the firm’s half-year results.
“We still do not know when they will decide to launch the project. However, their go-ahead means we are now certain that we are going to blend in Mombasa with Castrol,” he said.
In the past, KenolKobil has indicated that plant construction is expected to begin by mid-2017.
KenolKobil has a smaller lubricants blending plant in Kenya with a monthly production capacity of 600 tonnes. The new plant will have a monthly capacity of 1,000 tonnes.
KenolKobil has operational subsidiaries in six other countries in East, Central and Southern Africa, in addition to Kenya.
KenolKobil currently imports Castrol lubricants from South Africa. BP Southern Africa and KenolKobil signed a deal in May 2015, giving the latter exclusive distribution rights.