Bloomberg News

Petronas’ Engen Plans Acquisitions to Double Africa Business

December 12, 2011

(Updates with comment from Engen manager in fifth paragraph.)

Dec. 9 (Bloomberg) -- Engen Petroleum, a unit of Malaysia’s Petroliam Nasional Bhd., said it plans acquisitions and new sites to help double the number of retail outlets in sub-Saharan Africa outside of South Africa.

“The big plan” is to increase the number of gas stations to 1,000 by 2016 from about 500 across 18 southern African countries, Mike Cook, Engen’s international business retail manager, said yesterday in an interview in Port Louis, the Mauritian capital. “As more and more African countries stabilize, more people are becoming self-dependent. The car population is rising.”

Regional expansion will be led by Zambia, Zimbabwe and Mozambique and to a “lesser extent” by Botswana, he said. It will make purchases in Kenya to boost its “very small footprint,” while a mergers and acquisitions team is also looking at opportunities in Ivory Coast, Cook said.

Petronas, as the Malaysian company is known, owns 80 percent of Engen, which plans to become the biggest petroleum marketer in sub-Saharan Africa by 2016, according to Cook. Engen, South Africa’s largest fuel retailer, bought Chevron Corp.’s assets in countries including Mauritius, Zambia and the French territory of Reunion, in December last year.

“We are trying to build at least 15 new sites each year over the next five years,” Cook said, with an investment of $113 million in the period. It opened 29 new sites in 2009.

Engen has 1,200 retail outlets in South Africa, where it will aim to hold onto its 27 percent of the market, he said. Engen, which owns and manages a 135,000 barrel-per-day refinery in Durban that supplies neighboring Namibia and Botswana, doesn’t have plans to open new refineries in the region, preferring supplies from existing operations, Cook said.

--Editors: Vernon Wessels, Gordon Bell

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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