Puma Energy Africa – one of the largest independent storage companies in Africa – explains how the continent’s growing need for imported products is driving its impressive growth strategy
Despite lacking the necessary logistical infrastructure to meet the continents’ growing fuel demand, Africa holds great potential for high growth.
With economies flourishing in several African countries and demand for diesel and petrol growing as transport infrastructure develops, the continent is increasingly relying on imports of fuel products.
Puma Energy Africa is tapping into this significant potential, and, thanks to a series of large-scale terminal developments, is one of the largest independent storage and downstream companies operating in Africa with 42 terminals spread across 19 countries.
Since entering Africa in 2002 Puma Energy has invested more than $2 billion in the continent and in 2015 added 350 million liters of capacity. It currently has 1.1 million m3 of installed storage capacity and with its growing presence in West Africa and the Southern Africa sub-region it is able to provide a critical part of the continent’s supply chain.
Recently, the company started operations at the facility built by Bidvest Tank Terminals in Richards Bay, South Africa – a 46 million liters capacity facility that will help unlock the potential of the port, the neighbouring industrial development zone and the KwaZulu-Natal region.
It can store diesel minimum 50ppm, mogas 95, JetA1 and liquid paraffin. The facility allows the company to supply specifically non-blended product with no additives to the South African market. The company’s entry into the South Africa market formed part its wider plans to establish a greater footprint in sub-Saharan Africa.
In an interview with Tank Storage Magazine Jonathon Molapo, CEO of Puma Energy Africa, explains that its storage infrastructure allows the company to supply countries that are short of product.
‘Our facilities meet the structural needs of the countries that we operate in. The refineries are not able to meet the demand for products and having infrastructure in place allows us to import fuel in order to supply the countries that are short.
‘Africa represents real growth potential and our business model links global supply to local demand through investment in infrastructure, and is highly compatible with these markets.’
SECURITY OF SUPPLY
Ensuring security of supply is a key component of Puma’s operations.
Molapo explains: ‘The impact of the investments we make in our storage facilities is that we can offer a guaranteed security of supply to our customers and the country.’
Its facility in Matadi, in the Democratic Republic of Congo, increases the storage capacity available allowing the country to enjoy greater security of supply.
‘This new terminal allows us to supply the western part of the DRC in addition to other countries in the surrounding area.’ The terminal, which as four 6,500 m3 clean fuels tanks linked to a state of the art a floating jetty and interconnecting jetty pipelines, can handle petrol, jet fuel and gasoil. It serves as an important hub for the shipment and distribution of petroleum products.
The company’s operations in Mozambique have also allowed Puma to integrate into the aviation markets as well as act as a supplier to Africa’s busiest airport OR Tambo International Airport.
Molapo says: ‘Mozambique is interesting because we were looking for storage capacity in South Africa but it proved to be challenging because of land availability. We needed to supply the local market but also act as a supply hub for the wider region.
‘Thanks to our investment in this storage facility, we are able to bring in products as alternatives and we are able to integrate fully into the market. This would not have been possible if it were not for the investment we made in Mozambique.’
Puma’s competitive advantage in Africa can be attributed to three main factors. Firstly, it offers multiple supply routes and on-site support to guarantee security of supply: secondly, it provides investment and operational control of its supply chain infrastructure, and finally it offers competitive fuel pricing.
According to Molapo the company is well-positioned to capitalise on the fact that demand for oil is projected to grow by 19% by 2020 as a result of the in-roads it is making in the continent.
Despite its extensive logistics network, Puma has ambitions to expand further in Africa.
‘At Puma we look at things that make sense within the supply chain and we are very open to new opportunities. We want to continue growing. It probably won’t be at the same exponential growth rate as the past five years but we will continue to invest in storage as the cornerstone of our strategy.
‘We are still not in a number of countries. We need to grow quite quickly into the South African market and Ghana is a place where we have already invested significantly but we need to increase our market share.’
An example of the positive impact that Puma’s investments have had on economies in Africa is in Angola. Following decades of civil strife, Puma Energy helped the authorities rebuild the country’s road network by building a bitumen business at high speed. It also invested in modern storage and processing facilities at key locations. The bitumen expertise is now being exported to other African countries, including Mozambique and Congo,
where the product is needed to fuel their fast growing economies.
UNIVERSAL STORAGE OPERATIONS
Operating in Africa is no different to any other region across the globe, according to Molapo. ‘HSE is a big concern and that is the same everywhere we operate: the expected level of quality and safety is the same. In terms of our day to day operations there is not much difference at all between our operations across the globe.
‘The price of oil has had a marginal impact on our operations because we take a long-term view when we build a terminal.
‘Competition for storage in the region is quite intense and us coming in as a key player has highlighted the importance of storage. We have added capacity where there has not been any before.’