Namcor’s ambitious downstream dreams

NAMCOR is negotiating with the Botswana government to supply fuel to the country as the state-owned enterprise (SOE) widens its downstream business scope to try and make more money.

The company will also launch an automotive lubricant distribution business and construct bulk fuel depots countrywide in Namibia, Namcor’s Petroleum Downstream Manager Patty Olivier and public relations officer Katrina Sikeni told Nampa.
Olivier said Namcor plans to construct bulk fuel depots, both for commercial and strategic fuel supplies, as part of the its resolve to fortify its presence in the downstream oil sector. Currently, Namcor’s involvement in the downstream oil sector involves of importing of petroleum products into Namibia and the supply of such products to oil marketing and distribution companies.
Olivier said the company has entered the marketing and distribution sectors of the business by participating in fuel tenders in line with its new strategy of building an integrated oil company that competes on an equal footing with other players in the industry.
The company was awarded the fuel tender in May this year.
The company also refurbished a bulk fuel depot at Otjiwarongo to address the country’s dependence on refined fuel in terms of transport, electricity generation, road construction and mining,
“This storage facility will be for both commercial as well as strategic fuel supplies to ensure that all Namibians have access to fuel wherever they are and at all times,” she said.
Olivier said similar depots would be set up in places such as Walvis Bay Ondangwa, Windhoek, Katima Mulilo, Keetmanshoop and Lüderitz.
“We have already bought 25 per cent of the Caltex depot in Keetmanshoop, and we are also planning to enter into retail markets,” she said added.
It is essential that fuel centres be set up in the rural areas to enable Namibians to fill up their cars in close proximity to where they stay, she added.
Sikeni said the automotive lubricant distribution business is expected to start this month.
“The launch of the automotive lubricant business will be held this month, on a date to be confirmed at later stage. The growth markets sectors have been identified and the strategy is to aggressively compete on an equal footing with the existing oil majors,” she said at the Ongwediva Trade Fair on Tuesday.
Namcor’s aspirations to take over BP’s assets in Namibia were recently halted when Government refused to financially back the plan.
Cabinet refused to back Namcor’s bid, rumoured to be worth around N$600 million, saying it “was not convinced that buying BP Namibia is economically viable for Namcor in light of the fact that Namcor is already facing cash problems, while the projected cash flow for BP Namibia does not confirm the acquisition as a feasible proposal”.
Namcor made a N$257 million loss last year, and was declared technically bankrupt with liabilities of N$354 million outstripping assets by N$70 million.
Cabinet Committee on Treasury (CCT) furthermore said it “also determined that while retail and distribution of fuel products is not the core business of Namcor and in the absence of a Cabinet directive to Namcor to venture into that business, Namcor’s request to Government could not be considered by the said Cabinet Committee”.
Namcor has long lobbied for a role in the fuel retail business as a means to become profitable. When BP Namibia announced in March that it would be pulling out of Namibia, Botswana, Tanzania, Malawi and Zambia, Namcor decided to bid for the deal.
–  Own report and Nampa

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