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(Olaolu Olusina, Lagos)
For three days last November, stakeholders in the Nigerian lubricants sector converged on Lagos, the commercial capital of the country, to brainstorm on the way forward for the lube market in Africa’s largest economy and the most populous black nation in the world.
The occasion was the second edition of the annual Nigerian Lubricants Summit, which started in 2014 as a forum to discuss the challenges of the industry and proffer the way forward.
The summit, which was appropriately tagged, the Nigerian Lubricants Summit 2015, had as theme, Quality Lubricants: Key To Techno-Economic And Industrial Development Of Nigeria.
Apparently building on the success of the first edition during which 20 recommendations were made to the Nigerian Government, the 2015 Summit was specifically targeted at tackling the technical and commercial challenges of the country’s lubricants market.
The Principal Partner, Lubeservices Associates, Engr. Kayode Shote, whose company is the Technical Consultants to the Summit, stated this much in his opening remarks.
“The lubricants sub-sector of the downstream petroleum industry is a sector usually characterised by its secrecy while at the same time susceptible to the vagaries of the techno-economic dynamics and socio-political imperatives of the local and international politics, ” Sote said , noting that statistics available confirms that Nigeria is the third largest consumer of lubricating oils in Africa with 32 registered and other illegal blending plants.
“With a total installed capacity of about 965 million litres per annum but currently producing at an average of 40 percent of their total installed capacity, the plants employ over 5,000 Nigerian workers with a potential to generate over 50,000 additional direct work force and over 500,000 related services amongst the mechanics, oilers, greasers, technicians and other service providers if the plants are working at full-installed capacities,” he added.
According to Sote, “The nation’s lube plants also have the needed technology and potential to blend an estimated 75 percent of the total needs of lubricating oils while the remaining 25 percent are specialised products manufactured in developed countries with more advanced technology-driven process and are usually imported by the major oil marketing companies into the country.”
Sote however lamented that despite the obvious contributions and related business potential to the nation’s economy, the Nigerian lubes market is awash with excess base oils, different grades and types of products both locally blended by the majors, independents, fake and illegal manufacturers.
“It is worrisome to note that the market is also a dumping ground for sub-standard and off-specifications imported lubes of questionable quality. All these infractions are indeed a continued threat to the survival of the lube manufacturers if concerted efforts are not made by stakeholders to address these fundamental issues that can lead to the total collapse of the sector in Nigeria,” he stated.
He said the summit therefore was also an opportunity to showcase the fact that locally blended lubes meet and in some cases exceed both the national and international quality standards in the choice of raw materials, product formulations, packaging, quality sustainability, performance level and original equipment manufacturers’ (OEM’s) specifications and approvals.
Summit chairman, Chief Phillip Asiodu, who is a former Permanent Secretary, Ministry of Petroleum Resources, while welcoming delegates to the summit, said: “We are here to consider in detail a not-much discussed subsector of downstream operations of the oil industry but which is of critical importance to the efficiency of the machinery and equipment we use in the functioning of all sectors of the economy – transportation, infrastructure, agriculture, processing, manufacturing etc.”
He charged participants to examine the progress made, if any, in the implementation of the 20 recommendations of the 2014 Lubricants Summit.
Declaring the summit open was the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who also doubles as the Group Managing Director (GMD) of the state oil corporation, the Nigerian National Petroleum Corporation (NNPC).
In a keynote address titled, Lubricants – Key To Sustainable Industrial Development, the minister noted that the theme of the summit could not have been more apt and auspiciously needed than this time in the nation’s history, with the lean time of dwindling oil prices and industrial activities, saying his keynote address would be unusual as an unusual problem requires an unusual approach and solution.
Maintaining that the Nigerian lubricants industry had indeed come a long way but still has a long way to go, Kachikwu said it was not a hidden fact that Nigeria was passing through a period of modest industrial activities occasioned by inadequate power supply among other factors, leading to situation of either shut down of factories or outright relocation, especially foreign owned industries as witnessed in the tyre manufacturing sector.
Lamenting the current challenges facing the sector in the country, the minister said : “There was a time, when we could produce most of our base oil locally – Kaduna Refinery had an installed combined production capacity of 677 MT/ day of various base oils – leading to some major oil marketers siting lubricating Oil Blending Plants in the hinterland for nearness to source of raw materials – base oil.”
According to Kachikwu, “ Due to delayed or lack of timely Turn Around Maintenance (TAM) of the refinery, this is no longer the case as our base oils are currently imported 100 percent with its attendant heavy toll on our external reserves, loss of jobs and increasing unemployment.”
The minister also listed the proliferation of un-additivated or poorly additivated lubricants that are marketed in Nigeria with reckless abandon as another major challenge, noting that this was thriving due partly to consumer attitude and lack of awareness.
He however commended the efforts of the regulatory bodies in tackling this, saying “The efforts of the Standards Organisation of Nigeria (SON) and Department of Petroleum Resources (DPR) at combating the menace of sub-standard lubricant products are commendable. These have resulted in the level of increased sanity currently witnessed in the industry.”
The minister, nonetheless, stressed the need for more efforts in this area, warning that the menace was far from being fully eliminated.
He said the good news is that with these myriads of problems notwithstanding, the outlook is bright for the Nigerian lubricants industry.
According to him, “Nigeria with a population of over 177.5 million (2014) is the most populous country and largest economy in Africa, 26th in the world with a GDP of USD 569 Billion in 2014. Nigeria also has the highest vehicle population in Africa put at 12.6 million in 2011 (WHO). In comparison, Singapore has a vehicle population of 972,037 in 2014.”
The minister said with the requirement of modern vehicles becoming more stringent, demand would influence an upward pull in the quality of supplied lubes, noting that “With our abundant natural gas resources (183 TCF), Nigeria could serve as a regional hub for synthetic lube stock/fluid production through deployment of appropriate technologies e.g. Gas to Liquid (GTL).”
He therefore charged stakeholders in the industry to be ready for a paradigm shift through cooperation, knowledge exchange and data/information sharing, saying this will lead to the advancement of the industry even as he lamented the unavailability of accurate data on lubricants consumption which often leads to improper planning and forecasting.
The Managing Director, Lubcon , Mr. Taiye Williams, whose company single-handedly sponsored the maiden edition of the summit, stressed the need for consumer education in waste management while reacting to a paper on The Establishment of Waste Oil Reclamation Plant in Nigeria (Waste to Wealth) presented by Pastor Ayoade Kasali , Manager, Hydrocarbon Plant, DPR. Williams described the summit as a wonderful idea that started very small but “it’s becoming the voice of the lubricants industry.”
Director-General, SON , Dr. Joseph Odumodu, who was represented at the occasion spoke on standardisation In the lubes sector and efforts made so far by his agency in collaboration with the Lubricants Producers Association of Nigeria (LUPAN) and Major Lubricants Marketers Association of Nigeria (MOMAN).
Mrs. Mary-Anne Adeeko of Frals Testing & Consulting Services Limited spoke on Quality, Health, Safety & Environment Management Systems Assurance and Sustainability of Nigerian Lubricants Business.
In a goodwill message at the occasion, chairman of Lubcon International Group, Engr. Jani Ibrahim, expressed happiness at the turn-out at the event even as the Director- General, Nigerian Automotive Design and Development Council (NADDC), Engr. Aminu Jalal, said his agency relies heavily on lubricants and therefore expressed the commitment of his agency to the summit, promising that NADDC would be represented in the summit’s committee whenever invited.
A former lecturer at the River State University of Technology, Port Harcourt, Prof. Steven Odi-Owei, who is also the President, Tribology Society of Nigeria (TSN), spoke on Human Capital Development and Capacity Building in Lubricants and Lubrication. He stressed the need for the study of lubrication and tribology in the country’s institutions of higher learning to train the needed personnel to perform lubrication functions in the industries.
LUPAN secretary-general, Emeka Obidike, told Lubezine that the second Lube Summit would build on the success of the maiden edition which recommended a reduction in tariff on base oil from 10 to five percent which the Nigerian Government has already approved and granted.
The summit also attracted quite a few foreign delegates with interest in the country’s lubricants market. One of them was the Managing Director, Top Polymers FZC, Ajman, United Arab Emirates (UAE), Mustafa S.S. In an encounter with Lubezine after the closing session of the summit, he said: “It’s been three days of fun here in Nigeria. I’m not new to Nigeria, my company has been supplying additives to the Nigerian and West African markets, and all over the world.”
On his impression of the summit, Mustafa said: ”The Nigerians have tried, there is nothing to improve upon. They have said all that is there to say and you could see from the participants, the expression of satisfaction. This is not my first time in Nigeria but my first time at the summit.”
Packaged and endorsed by SON and DPR as an international conference and exhibition of the nation’s lubricants and the related industries, the service providers of the summit included the Lubcon Group – Managing Consultants; Lubeservices Associates, Technical Consultants and CMC Connect Burson Masrteller – Communication Consultants.
This article first appeared in the December 2015 edition of Lubezine (www.lubesafrica.com)
