Motorist lubricant prices set to fall

Dar es Salaam. Motorists and owners of machinery could be rubbing their hands with glee due to imminent competition for clients in the lubricants sub-sector in Tanzania. This is thanks to a new $20 million (Sh46 billion) investment by Total Tanzania Ltd.

Total Tanzania commissioned its $20 million lubricant factory in Dar es Salaam at the weekend, thus setting the stage for cutthroat competition for clients with other dealers. After all, Total’s move will result in price cuts of up to 15 per cent.

“Basically, such a massive investment could result in a number of benefits, including reductions in prices… Once all the calculations are conducted in the near future, we could be talking of a reduction of up to 15 per cent in price,” said the director for Legal and Corporate Relations at Total Tanzania, Ms Marsha Msuya Kilewo.

Total’s lubricants are already available in Tanzania, but the company was either importing them from its sister companies in Kenya, Zambia and South Africa, or it would use a third party to blend them locally – and the cost of that was passed on to the final consumer. According to the Total Tanzania managing director, Mr Tarik Moufaddal, the commissioned plant has the capacity to blend 15,000 kilotonnes of lubricants per shift per year.

“Tanzania’s annual demand for lubricants currently stands at about 40,000 kilotonnes and this suggests that when it reaches a point whereby we get the approval to do two shifts per day, this plant alone would satisfy about 60 per cent of the national demand,” he said. The facility also has the capacity to blend 750 metric tons (tonnes) of greases per shift per year – and 990 metric tons of coolants per shift per year. “From here at Chang’ombe in Dar es Salaam, we will be producing a range of grade engines oils, hydraulic oil, gear box oil, transmission oils, multipurpose greases and coolants to be used in heavy-duty trucks that are used in mining, cement, steel, textile and transport sectors, among others,” he told the minister for Industry and Trade, Mr Joseph Kakunda, who graced the event with his presence.

Speaking at the event, Mr Kakunda said establishment of the factory was testimony to the fact that President John Magufuli’s industrialization agenda is taking shape. In that regard, he assured the company of the government’s total support.

“My message to all government officials is that we are here to support all genuine investors. We do not expect any government official to come here with the ‘power mentality’ that is common in the thinking of some government officials,” the minister said. Since it acquired the assets of Gapco in March 2017, Total invested a total of $200 million (about Sh460 billion) in Tanzania during the past two years.