Namcor considers retail business
The National Petroleum Corporation of Namibia (Namcor) says plans are at an advanced stage to enter into the lucrative fuel retail business. Managing Director, Obeth Kandjoze says there are two projects in the pipeline that have already been approved by the Namcor board.
He said: “There is a service station we are planning in a small town between Rundu and Katima. Just a few weeks back the board approved that investment based on the economies that we see and rate of return on the dollar invested.
“We should by now have either tenders running, or perhaps in not-too-long distant future. That normally doesn’t take long because these are just service stations along the levels of N$2 million or N$2.5 million perhaps a little bit less for each one of those.”
Kandjoze, however, cautioned against setting up service stations everywhere in the country without looking at the return on investment.
He said:“We will not just put a service station anywhere where it does not make sense, we need to have a healthy return on that investment, that is the determining criteria. We need to know the payback period and return on the dollar, that is, whether we are making a profit or not. If we are not, sorry we don’t get in there.”
Although Namcor would have wanted to be more aggressive in its retail business strategy, the Namcor MD says the sale of service stations like BP and Caltex came at a time when Namcor was struggling financially.
“For Caltex, the timing was just inopportune for us.
“I think that consideration [entering into retail] is favourably considered by the Namcor board as I speak to you, so not being aggressive should not be the focus. It is more of a calculated approach of how you want to expand rather than a haphazard loading of business opportunities.
“In the calculation of how we aggressively tackle that growth, remember that I said that we have a department that is thinly staffed and that is a back step and unless we get the personnel that I spoke about earlier, we may have a challenge. So aggression, although is our intention, the practical bodies to do these, financially, technically and otherwise, will remain a challenge. We want to be calculative about how we move that agenda forward instead of taking positions that will come back to haunt us,” Kandjoze said.
In terms of the bulk fuel storage facilities, Namcor is looking at setting up something in the Lüderitz area in the future, but again Kondjeze emphasised that it has to be on the basis of return on investment.
Currently Namcor has bulk fuel storage facilities in Otjiwarongo, Keetmanshoop and Mariental. There are also plans by the government to build a N$1 billion, 70-million litre petroleum storage depot in Walvis Bay which will be managed by Namcor.