Hyrax Oil sets up joint venture in Africa
Malaysian lubricant manufacturer Hyrax Oil Sdn Bhd is setting up a blending plant in Maputo, Mozambique, in a joint venture with local oil company Petroleos de Mocambique S.A. (PetroMoc).
The range of petroleum products the plant will produce includes automotive, industrial, marine and specialty lubricants, which are to be exported to neighboring countries.
Under the agreement, PetroMoc, the second largest oil company in the country, will prepare 2 hectares of land for the plant as well as secondary facilities such as storage at the nearby port Matola, while Hyrax Oil is to set up the equipment, provide experts and market the product to neighboring countries.
Upon completion at year-end, the blending plant is expected to produce two million liters of finished products monthly, and more in the future.
The ratio of the 70-30 joint venture, registered in Mozambique under the name of Petromoc-Hyrax Oil International Ltd., may vary slightly pending further discussion in Hyrax Oil’s as well as PetroMoc’s investment structure, Hyrax Oil Managing Director Datuk Hazimah Zainuddin told reporters after the memorandum of understanding signing ceremony held on April 27.
Although the lubricant market size in Mozambique is only estimated at around 12 million liters per annum, the other countries in the South African Development Community (SADC) consume up to 700 million liters per annum.
By taking advantage of existing free trade agreements, it is expected that trade benefits such as stamp duties and tax exemption will give the products a more competitive edge in terms of pricing.
Hazimah added that the Malaysian company’s initial outlay of US$10 million towards the approximately US$50 million project will ultimately boost Hyrax Oil’s revenue of RM105 million (US$33.8 million) by 20-30% this year.
Currently, PetroMoc contributes about 5% to 10% to that amount.
The working relationship between the two companies began five years ago when Hyrax Oil started supplying lubricant products to the African company.
(April 27, 2013)