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Lubricant production and packaging is a gold mine

By Godwin Uba
21 December 2021   |   2:20 am
Investing in lubricant production is very lucrative. The importance of engine oil, grease and others cannot be over emphasised.

Investing in lubricant production is very lucrative. The importance of engine oil, grease and others cannot be over emphasised. Lubricant is the live wire of any engine. It frees the engine from friction and also helps to transfer heat from one component to the other. These processes contribute to the good health of any engine, as they reduce tear and wear.

The demand for engine oil for different grades of vehicle, generators, motorcycles and industrial machines is enormous.

Statistics say the total world demand for lubricant is about 50 billion liters per year, 60 per cent of which is for the automotive sector and the remaining 40 for the industrial sector.

In Africa, Nigeria is said to consume about 700 million liters, which is just one per cent of the world’s total demand. This translates to a gross earning of N150 billion in 2013 and over N450.37 billion as at the end of Q1, 2021. With this figure, Nigeria becomes the third largest consumer of lubricant in Africa.

The cumulative assets for blending lubricant plant are about N20 billion, which in 2013 generated about N45 billion profits and quadrupled this figure in the Q1, 2021.

Interestingly, about 75 per cent of the raw materials for producing lubricant of any sort are produced locally. Thanks to the nation’s oil and gas industry or petrol chemical industries.

There are four types of lubricant: oil, grease, penetrating lubricant and dry lubricants. The two commonest of these four are oil and grease. Both are daily used for generators, motorcycles and small engines used in homes or small producing outfits.

Lube market, which is divided into two parts (petrol and diesel), is huge and varied. The market is estimated to be over N900 billion and continues to grow at around 3.5 per cent annually. Producers in both markets are still scratching the surface because demand for lubricant is very huge.

For instance, the petrol automotive segment accounts for 65 per cent of the market, while the remaining 35 goes to the diesel segment. Trucks and other heavy-duty engines or vehicles patronise the diesel engines segment.

Although, the project can be located in any place, it would be of benefit to the investor to site it at an urban or semi-urban area, where other facilities such as good roads, good quality power supply will be of advantage.

The project can take off on a two-plot of land with the factory having five major rooms namely: cloak, packaging material, production, finished product and raw material.

The required machines are for blending, oil filling, cap screwing, conveyor and farm tank of about 20,000 litres. Others are standby generator, delivery vans, interconnecting pipelines and finance. With about N38.5 million out
side land and building, a potential investor is on the go.

There is also the need to get the legal and operational licenses from necessary authorities to enable the investor operate without hindrances.
For assistant and further details contact us.
• Uba is from Global Trust Consulting. Tel: 08034494437(WhatsApp), 08023664368. Email: ubagodwin@yahoo.com

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