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Saturday April 27, 2013

Hyrax Oil sets up operations in Africa

KUALA LUMPUR: Lubricant manufacturer Hyrax Oil Sdn Bhd is setting up a blending plant in Maputo, Mozambique in a joint venture with local oil company Petroleos de Mocambique S.A. (PetroMoc).

The range of petroleum products, which the plant would be producing includes automotive, industrial, marine and specialty lubricants, which are to be exported to neighbouring countries.

Under the agreement, PetroMoc, the second largest oil company in the country, has to prepare 2ha of land for the plant as well as secondary facilities such as storage at the nearby port Matola, while Hyrax Oil is to deploy the equipment, provide experts and market the product to neighbouring countries.

Upon completion at year-end, the blending plant is expected to produce some two million litres of finished products monthly, and more in the future.

The ratio of the 70%-30% joint venture, registered in Mozambique under the name of Petromoc-Hydrax Oil International Ltd, may vary slightly pending further discussion in Hyrax Oil as well as PetroMoc’s investment structure, Hydrax Oil managing director Datuk Hazimah Zainuddin told reporters after the memorandum of understanding signing ceremony yesterday.

Although the lubricant market size in Mozambique is only estimated at around 12mil litres per annum, the other countries in the South African Development Community (SADC) demand up to 700 mil litres per annum.

By taking advantage of the existing Free Trade Agreements, it is expected that trade benefits such as stamp duties and tax exemption will give the products more competitive edge in terms of pricing.

Hazimah added that the Malaysian company’s initial outlay of US$10mil (RM30mil) towards the approximately US$50mil (RM150mil) project will ultimately up Hyrax Oil’s revenue of RM105mil by 20% to 30% this year.

Currently, PetroMoc contributes about 5% to 10% to that figure.

The working relationship between the two companies began five years ago when Hyrax Oil started supplying lubricant products to the African company.

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