Independent lubricants vendor KZN Oils successfully started production of its own brand of lubricants in December.
Global oil giant Chevron is responsible for blending the new lubricants, which are used in the commercial, industrial and marine sectors, on behalf of the company.
The KZN Oils product range is blended to a high-quality formulation with base oils and additives that are used by Chevron to ensure customers are guaranteed that the oils meet all relevant global industry specifications required by original-equipment manufacturers.
KZN Oils CEO Rajen Reddy says having Chevron blend its products and having its oils come from the same plant as the Caltex brand are a major accomplishment for the company.
He adds that convincing Chevron to support an independent broad-based black economic- empowerment company is a breakthrough.
Further, he says KZN Oils will aggressively market itself this year.
“I believe we have a competitive edge with our brand of lubricants, so I foresee that we will get a lot more support from our customers from a quality point of view now that Chevron is blending our products.
“That should remove the doubt factor and, because we can control our costs, I see KZN Oils delivering quality lubricants at an affordable price,” he notes.
Rather than going directly to the end-user with its products, the company plans to set up franchises to give other distributors and black economic-empowered companies a chance to grow in the industry.
“I am very positive for 2012,” he says.
Meanwhile, the independent company has also concluded a deal with Chevron to supply its products to the oil giant’s 29 service stations between Salt Rock and Swaziland, including the Monte Vista North and Monte Vista South service stations along the N3, 13 km north of Harrismith.
This has necessitated that KZN Oils acquires more road tankers to transport its product. “We currently have 19 tankers but will need to acquire more in the near future,” says Reddy.
Further, the company will distribute its products to all service stations that will join the Caltex brand over the next 15 years.
Reddy says the project has taken off well, but highlights that there are supply constraints.
He has expressed the hope that government will become more accommodating in allowing independent oil companies to import finished products into the country.
“We may lose jobs on the refinery side but, if you look at the lower costs, I think we really need to realign our thinking on this issue,” he states.
Meanwhile, KZN Oils is considering acquiring another storage depot in Ladysmith.
Last year, the company acquired two oil storage terminals, one in Empangeni and the other in Newcastle, from Chevron, boosting its storage capacity by 2.4-million litres to more than 12-million litres.
While the Empangeni depot was fully operational, the Newcastle depot needed refurbishment, as it had been dormant for a number of years.
The company had initially planned to have the Newcastle depot upgraded and operational by April last year, but says it has now found an alternative option.
“We did not go ahead with that project, as there has been a potential opportunity for another storage space in Ladysmith. “This depot requires less work than the Newcastle depot and suits our company’s needs better,” says Reddy.
The Ladysmith depot will provide 1.2-million litres of storage space, similar to that of the Newscastle depot.
As part of KZN Oils’ continued growth, its environmental monitoring system has been upgraded. It has, together with fuel management specialist AFS Group, introduced the use of electronic probes that detect fuel leaks, water or other contaminates in the product, or any loss of product.
“The automatic tank gauging system calculates your throughput and your replenishment, so if you lose any product, the system alerts you immediately. “In the old days, you drilled test pits and sampled them but now you can do that electronically every second of the day,” Reddy tells Engineering News.