An open letter on lubricants

their use in Zimbabwe.
Prior to 2004, almost all major companies blended their oil locally from their blending plants and the market was adequately covered.
Following the adoption of the multi-currency system all hell broke loose and the preference is now to import finished goods at the expense of blending locally.
On the other hand, we have written about some of the imports from the United Arab Emirates whose quality is dubious and does not meet the required standards and people buy these products in good faith due to the attractiveness of the price at the expense of quality.
We also have a situation where we have quality products being imported from South Africa that are crowding out local products in the market.
In terms of employment, this industry has lost about 4 000 employees due to the fact that we prefer to export jobs by importing other countries’ products.
If we are to look at the multiplier factor we will discover that about 20 000 people have been affected and this has also affected the spending power of the affected.
Who is benefiting in this scenario? It is obvious, the United Arab Emirates and South Africa. Buy Zimbabwe and Marketers’ Association of Zimbabwe campaigns should step up and focus on this by lobbying with the relevant stakeholders and encouraging locals to buy local products and help create a conducive atmosphere that should enable local players to compete globally. The issue has been compounded by the fact that the Sadc protocol has tended to classify oil blended locally as the same as imported ones.
The net effect of this is that locally produced oils have become more expensive. The certificate of origin issued under the Sadc protocol ensures that goods that are proven to have originated from one country in the region can enter another country duty free.
However, local blenders are not enjoying this benefit as they have excess expenses such as packaging, labelling and a lot more, which at times double the price of their products.
Usually the biggest stumbling block you would find is the cost of packaging, which is heavier than the contents.
A 5-litre container is selling at around US$1, yet in South Africa it is less than 10 cents.
This aspect should be addressed. Let’s share the cake here in Zimbabwe. There is need for the industry to grow.
Looking at the vehicle population in the country we estimate that the engine oil requirements are in excess of 30 million litres annually excluding the mining sector.
There is a huge market to justify local blending. Blending locally could easily create a further 5 000 jobs taking into consideration that these oil companies will be buying packaging from Mukundi, Megapak, CP Plastics, etc, and utilising the services of screen plate writers, designers, labelling, and all the statutory obligations.
The sum total would be an additional value to the country rather than having a situation where most of our money is heading to South Africa. As an illustration, as Obel we are capable of blending over 2 million litres of lubricant oils per month and this figure can be increased through addition of more products to about 4 million litres monthly.
This then opens opportunities for toll blending locally and regionally in central and northern Mozambique, Malawi, South Zambia, DRC and northern Botswana.
We note that there are plans to open a blending plant in Botswana. We could capitalise on this by offering toll-blending facilities here in Zimbabwe.
We respect the fact that some of the criteria used by Buy Zimbabwe to certify local companies and their products are biased towards environmental friendliness, adherence to SAZ standards and labour laws of the country.
They are also companies aiming to demonstrate that there is a significant proportion of value addition being done here.
We have companies that have demonstrated this and one that comes to mind is Willowvale Mazda Motor Industries.
It would be encouraging to have the feedback to this open letter.