25 October 2015, Windhoek — Starting local businesses and conceptualising local brands are two possible ways of preventing the constant repatriation of profits made in Namibia to other countries. This is exactly the intention of Petro Afrika, the country’s first-ever local fuel brand and service station.
“Service stations can be excellent centres of economic activity and a local service station brand is one way to keep profits in the country,” said Isaiah Kavendjii, the managing director of Petro Afrika.
The company’s unique business model focuses on establishing service stations in remote areas of the country where larger and established fuel companies see no financial viability in setting up shop. To date Petro Afrika – which boasts a full-time staff of 12 people – has three operational service stations and intends to have two more (one in Okongo and one 20km outside Eenhana) up and running by the end of the year.
“In the remote and isolated areas of the country people have to drive long distances just to get fuel. People have to stretch their meagre resources to gain access to a basic commodity,” said Kavendjii.
PetroAfrica, which is jointly-owned by Hengari Hoff Holdings and Starship Investments cc, offers entrepreneurs an opportunity to open either a mini-service station or a medium-sized service station in their communities, particularly in the absence of larger, well-established international fuel companies.
Kavendjii noted that the fuel and lubricants supplied by Petro Afrika are sourced from traditional suppliers, as the company does not compromise on quality. However, the start-up capital and initial investment is considerably less than larger fuel companies, with an investor able to establish a service station for between N$1.4 million and N$2 million, depending on their specific requirements.
Petro Afrika entered the energy sector with a view to meet government’s set imperatives of bringing energy closer to the rural poor by affording them accessibility to petroleum products, as well as ensuring broad-based participation.
Kavendjii noted that eventually the company plans to set up storage facilities to enter a broader scope of the value chain. “As a country that has been independent for a long time it is inconceivable that we still heavily rely on foreign entities,” noted Kavendjii.
He added that in isolated rural communities a service station is not just a place to fill up. “A service station in isolated and remote areas is a new lease of life for these communities. We are in the process of extending our range of services to include tyre repairs and gas sales and we are encouraging investors to add to the services offered as and when required,” remarked Kavendjii.
He explained that additional services could include financial services, sale of animal feed, groceries and postal services. Petro Afrika is also investigating its own financing scheme for potential investors, as the company has a list of about 300 interested investors. “More financial institutions should also come on board to provide financing for the establishment of service stations,” he added.
Kavendjii continued that he has been involved in the fuel industry for about five years and would eventually want to see Namibia establish its own oil refinery. “The private sector must take the lead in driving the establishment of a local oil refinery,” he concluded.