Published On:February 16 2015
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Gulf Petrochem acquires Essar's Kenyan operations.
Sharjah-based Gulf Petrochem has acquired the marketing licence and retail outlets of Essar Oil in Kenya.
Essar had an asset-light operation in Kenya, with only four retail outlets (franchisee owned and operated). The licence was held by Essar Petroleum East Africa, a subsidiary of Mauritius-based Essar Energy Overseas. The deal is pegged around $5 million.
'Gulf Petrochem is looking at it from a strategic perspective. It plans to expand in Africa, which it sees as a good growth market,' said a person aware of the development.
In an emailed reply, Essar Oil said in view of its decision to exercise a put option for its stake in a Kenya refinery, it 'strategically decided to exit from the Kenya market and focus on other assets and markets in India and UK.' It sold the Kenya refinery last year, back to the government.
The Essar Group has undertaken a delisting process for some of its businesses in recent months.
Gulf Petrochem has been looking for avenues to expand. Last year, it said it was planning to invest Rs 500 crore in India to enter the competitive Rs. 6,000-crore lubricants market. The investment will entail setting up of two more fuel storage terminals, to have a total storage capacity of up to 600,000 cubic metres. It plans to be among the top 10 lubricant companies in the country.
Last year, Gulf Petrochem acquired industrial lubricants company Sah Petroleum for Rs 95 crore and Royal Dutch Shell Specialties' bitumen plant at Savli, near Vadodara in Gujarat, for Rs. 15 crore to enter the fuel storage terminal business in India.