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|  TEMA LUBE OIL COMPANY LIMITED
Interview with
Mr. S.T. Anguah,
General Manager
July 5th 1999
Contact:
Private Mail Bag, Tema
Tel: (233) 22 202152 - 202674
Fax: (233) 22 202181
Telex: 2684 LUBOIL GH, Tema,
Ghana E-mail: tlube@ighmail.com
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Could you begin by giving us a brief historical background of Tema Lube Oil Company?
The government of Ghana wanted a blending plant here in the country, so the government of Italy agreed to give the government of Ghana a loan to use to build a blending plant here. That was in 1987. So construction of the plant began in 1987 with the loan from the Italian government and because the money came from Italy, Agip Petrol were the contractors. So construction commenced in 1987 to 1990. But before the plant could be finished the government decided that the plant should be privatized. So the government invited the oil marketing companies operating in this country to come together to form a company and buy the plant from the government and run it.
What year was this in?
This was in 1990. Tema Lube Oil Company Ltd. was formed, with the following share holding structure: Mobil Oil UK with 16% shares, Shell UK with 16%, Elf Africa Ltd. with 16%, AGIP Petrol with 12%, Total 6%, and then SSNIT of Ghana 10%, GNPC 10% and then GNPC in addition paid for 4% which they were holding in trust for the public, and then Ghana Oil (GOIL) 10%. Last year GNPC sold its 10% and then the 4% they were holding in trust for the public all to SSNIT. So SSNIT now owns 20% plus 4%, and then the other share holding remains. So it is a private company and we started blending in June 1992 for the oil companies. So our only customers are our shareholders. We do not sell directly to the public or to any other organizations. We blend for the oil companies who do the marketing operation.
You are in the Ghana top 100 companies, could you give us some of the figures and statistics, which brought you to the top 100, such as your turnover in 98 your number of staff and above all your market share?
Our turnover was 43 billion cedis in 1998. We have about 90% of the market because we blend for all the oil companies in the country. The other 10% constitute other oils for which the demand is not so much so we do not blend here. The oil companies rather import those ones. We have at least 76 employees, and for a blending plant that is very high. It is high because we do the drums in which we put the oil ourselves. So we have the drum plants and then we have a plastic container plant in addition to the blending and filling facilities. That is why our number of staff is very high.
Who are your competitors at the moment?
The other competitors are other oil companies abroad. Since the major oil companies registered here are our shareholders and therefore take the products that we can do locally from here competition is not so much. They have the right to refuse products from us although they own the company. If we do not produce according to their specifications that they expect or if our prices are too high then they would rather import. So the fact that they are still sticking with us shows that we are doing well.
How are you going about stream lining your operations and remaining efficient?
We try, as much as possible to use the best numbers of people that we need to run this operation. Any activity that we are not best suited to do, we contract out to other organizations which are more technically efficient to do it, and then we concentrate on the core things where our competencies are high which is blending. As a result of that we will soon divest on the plastic container facilities. We will give it out to a private producer because we believe that others can do that better than we can.
So you are actually going to sell your plastic container plant or are you going to sub contract it?
We will rent it out to the producer who will supply us. We will hire out our facilities so he will pay us rent for using it over here. It is so because we have just started and we are not too sure whether it will be safe for us. After five years when we feel more comfortable we will be able to sell them.
Where are you getting all your raw materials?
The basic raw material for lubricants is base oil and it is a product that comes from crude oil that comes from refineries outside the country. Unfortunately, our refinery here does not produce that so we import the base oil mainly from Western Europe but sometimes from North Africa, from Brazil too. But we bid. We go to tender and select the most competitive bid.
At the moment you are exporting to other ECOWAS countries I believe?
We are not doing the exporting directly. As I said we do not do any marketing or distribution. The oil companies who are our shareholders, they export. They have marketing outlets in the sub-region and so they use products from here to satisfy that demand sometimes.
| So what strategies or measures are you going to implement to help you grow as a company? You have 90% of the market. There is a reason to get complacent because you have this market. What measures are you going to put in to stay there?
We had really wanted to go all out to the sub-region to compete with whoever is there. But our peculiar circumstances are such that we would be competing with our shareholders that are already in the market. So the agreement that we have come to with our shareholders is to try to be as price competitive as possible. That is better than sourcing products from Europe so that they will find us more economical and deal with us from here and supply the companies. So the strategy is to try and be as efficient as possible so that we can produce our products at a cost as low as possible. And then aided by lower transportation cost because we are in the sub-region and the European plants are far away. We stand a better chance of being able to supply at a more competitive price.
And is that going to help you grow?
Yes. Since it is going to be incremental business I think we can we can sell more. While the volumes are going up we definitely will have a margin on every liter that we produce and that is going to make us grow.
So you are going to take over some of the market from other countries in West Africa?
Exactly.
What is the plan for that and in what time span?
Yes, we are expecting that the quantities that are exported from here will grow about 10% annually for the next five years. We expect that after five years about 30% of our output will be exported through the oil companies, not by ourselves.
The government is implementing its Vision 2020 program. How does your company expect to go by the criteria stated in vision 2020?
Our company expects to produce the best lubricants at the lowest prices so that overall Ghanaians would be using products from here. The tendency for people who are in business to try and bring in products from elsewhere so that they can make money. We expect our quality to be so high and our prices to be so competitive that products from here will be used in Ghana, not because the government says so but because people find it cheaper and more convenient to use our products.
On a more personal level, could you tell me what you think your greatest achievements are since you have been general manager of the company?
The greatest achievement has been paying off the loan that was contracted. The government lent the loan that it took from the Italian government to the Tema Lube Oil Company and we were supposed to pay the loan in 15 years.
Starting from 1996?
Yes, from 1996. But we finished paying last year.
So you are very efficient about that!
We finished paying 7 years ahead of time and I think that was something because the government gave the loan to us as a dollar loan at 10% interest per annum and because we sell to the local oil companies we sell in cedis. And we were supposed to pay in dollars, and if we delayed the payment, with our inflationary environment it was going to be very difficult to raise enough cedis to change into dollars and repay. So that was why we decided to pay as soon as possible. And I think that was outstanding.
The other issue is the fact that all the staff here are Ghanaian. It was so from the beginning and in fact at the time that we started the company I was the production manager and I was the leader of the technical team. And considering that we had no background in lubricants, we had to learn.
As you know, Forbes Magazine reaches more than 4 million readers, what is your final message to them?
Tema Lube Oil Company Ltd. produces lubricants for great multi-nationals and we do it to the same quality as the oil everywhere that is why they are sticking with us. We believe that wherever our products go people will find them to be the very best.
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
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GHANA
