KenolKobil and Castrol to build lubricant plant

PHOTO: COURTESY

KenolKobil and British industrial and automotive lubricants manufacturer Castrol have partnered to construct a $15 million (Sh1.5 billion) lubricants factory in Mombasa.

KenolKobil sought the partnership believing it to be a cheaper option than importing the lubricants from South Africa, where it has been obtaining the merchandise from.

The oil Company’s Chief Executive Officer David Ohana confirmed the partnership and adding the budget for the mega project has already been approved by Castrol’s management.

“The Castrol head office has approved the budget and the project is due to commence,” Ohana said during the release of KenolKobil half-year results last Thursday. The construction of the plant is set to begin by mid-2017.

Ohana said the factory will have a monthly output of 1,000 tonnes of lubricants and will strengthen KenolKobil’s standing in the local petroleum sub sector.

British Petroleum (Southern Africa) owns the Castrol brand of lubes in Kenya, and it also runs a smaller lubricants plant in the country that produces a monthly capacity of 600 tonnes of Castrol lubricants.

KenolKobil currently imports the Castrol lubricants from South Africa, attracting an import duty of 25 per cent. The oil firm is keen to cut soaring costs as it aims to strengthen its balance sheet.