South Africa’s Omnia Group (Pty) Ltd. has agreed to acquire 90% of the shares of Umongo Petroleum (Pty) Ltd. for ZAR780 million (USD58.19 million) from Lubricant Additives Solutions and Technology (Mauritius). Umongo Petroleum is a leading distributor of petroleum additives, base oils and other related petroleum, oil and lubricant products in South Africa and sub-Saharan Africa.

The remaining 10% of Umongo Petroleum’s shares will continue to be held by Autumn Storm, an entity in which the current Chief Executive Officer, Boston Moonsamy, is a shareholder. Moonsamy will continue as CEO of Umongo Petroleum for five years.

The acquisition by Omnia Group, an oil products and lubricants supplier, is part of its strategy to expand its chemicals business. Omnia’s Chemicals division, which operates under the Protea Chemicals brand, has a reputation for excellence in the distribution of specialty, functional chemicals and polymers in sub-Saharan Africa in countries such as South Africa, Namibia and Kenya.

“It’s really an area we are not involved in currently which has good product volumes and has good growth,” Omnia CEO Rod Humphris said.

“Umongo is a market-leading, complementary asset to our existing Protea Chemicals business which will broaden our current product offering and strengthen our sub-Saharan Africa strategy,” said Wayne Koonin, Omnia’s financial director.

Following the approval of the transaction by various competition law authorities, including the South African Competition Authorities, Umongo Petroleum will become a subsidiary of Omnia and report under the Chemicals division in the consolidated results. Umongo Petroleum will continue to operate as a separate stand-alone entity within Omnia.

Umongo Petroleum has distributor agreements with Chevron Corp. for its base oils, additives, other petroleum-related petroleum and lubricants in South Africa and sub-Saharan Africa.

Umongo Petroleum reported earnings before interest, tax, depreciation and amortisation (EBITDA) of ZAR101 million (USD7.53 million) for the year ended February 28.

In 1998, Chevron Oronite Company LLC, which is part of Chevron Chemical, appointed Mahmoud Homayoun via African Petroleum Additives Proprietary Limited (APAC) to represent them as an agent in South Africa, servicing the requirements of lubricant and fuel marketers with Chevron Oronite lubricant and fuel additives. Homayoun is the current chairman of Umongo Petroleum.

In 2005, Umongo Petroleum Additives was established as a distributor of Chevron Oronite for South Africa and sub-Saharan Africa. Umongo Petroleum diversified its business activities to also include distributor agreements with Chevron Products Company U.S.A. Inc, BASF SE and Evonik Oil Additives GmbH. This led to the change of its name to Umongo Petroleum.

Umongo Petroleum has also concluded an agreement to acquire 100% of Orbichem Petrochemicals Proprietary Limited, the distributor of Ergon range of products in South Africa and sub-Saharan Africa.

Umongo Petroleum, based near Durban, South Africa, operates a fully outsourced supply chain and logistics business model, using accredited storage facilities, transporters and other related service providers to import, store, process and deliver raw materials and finished products to customers.