, NAIROBI, Kenya, Mar 25 – Oil marketer KenolKobil intends to venture into the property market as it seeks to diversity into sectors that are not stringently regulated.
Chairman and Group Managing Director Jacob Segman said they have acquired a four acre piece of land in Addis Ababa, Ethiopia which they intend to develop in partnership with private sector players.
"We have a big piece of land in the heart of Addis Ababa and we know that from an environmental impact point of view, we will never be allowed to have it as a petroleum terminal. So we intend to join forces with property developers and put up residential houses and a shopping centre," said the chairman.
The company has complained of government interference in the sector which has in turn negatively affected the operating environment in petroleum business.
To mitigate this, Kenol plans to focus more on the non-fuel business which includes Liquefied Petroleum Gas (LPG), lubricants and resell so that the line can contribute at least 25 percent to the firm\’s bottom line in the next few years.
The group, which consists of seven subsidiaries, has made substantial investments in the LPG plants in Nairobi, Kigali and Kampala which have in turn been contributing 16 percent to the business. It also plans to become an active player in the cooking gas market in Tanzania and it is currently in the process of designing a Sh588million ($7million) plant in Dar es Salaam.
The African trading desk which deals with developing new mid-stream trading markets in African countries through bidding for tenders to supply petroleum products in several countries has also been on the up.
"The group\’s non-fuel net contribution is currently 10 percent. We have set a target of 25 percent but we know that it is not going to happen overnight; it\’s probably going to take six to 10 years but we will make it," Mr Segman said.
Mr Segman spoke at a press briefing, where the group announced a 37.2 percent rise in net profit to Sh1.77billion for the year ended December 31 2010.
The group has a positive outlook for 2011 and has vowed to continue with its geographical expansion in East, Central and Southern Africa to shore up its performance.
"We are looking at all markets starting with Djibouti all the way to South Africa. Specifically, we are looking at Malawi, Congo, Angola and Namibia. Some of them are at an advanced stage and some of them are at the formative stage," said the company\’s Group Mergers and Regional Manager Patrick Kondo.
Kenol has been eyeing Mozambique and Zimbabwe and it already making headway there. In Mozambique, they have already secured a storage of 21,000 cubic meters which means that they can start bringing in products for sale.
They also have someone based in Harare who is charged with establishing the operations in these two countries.
Follow the author at https://twitter.com/cirunjoroge