US$ 14.5m lubricant factory to be built by Kenol Kobil

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Kenya’s third largest oil marketer, Kenol Kobil is planning to develop a mega lubricant factory in Mombasa which is stipulated to cost US$ 14.5m.

“We will build a new blending plant in Mombasa in the next one or two years at a cost of between $10 million (Sh958 million) and $15 million (Sh1.4 billion),” said KenolKobil Managing Director, David Ohana at the signing ceremony in Nairobi.
The projected amount will be raised through a joint venture with another oil company- BP Southern Africa. The two companies signed an agreement that gave Kenol Kobil the go ahead to supply Castrol lubricants.

The mega development project which is anticipated to boost the profits and sales of the company will be used in the production of Castrol-branded lubricants which will enhance the company’s bottom line. It is set to produce a whopping 1,000 tonnes of lubes per month.

This initiative will massively increase competition in the petroleum sub-sector locally.

Kenol Kobil has another smaller lubes plant in Kenya with a monthly production capacity of 600 tonnes for its own lubes. Castrol lubricants from South Africa are also imported by the company.

They are currently in a quest of cutting costs by importing inputs that attract 10 per cent duty for local blending other than the 25 percent that they incur.