Umongo Petroleum acquired South African base oil distributor Orbichem Petrochemicals, which is now a wholly owned subsidiary. Terms were not disclosed.
Cape Town, South Africa-based Orbichem distributes API Group I, II and III base oils, naphthenic process oils, transformer oils, waxes and bitumen. In 2014, Orbichem began distributing Ergon Internationals naphthenic insulating oil, base oils and process oils in South Africa and sub-Saharan Africa.
Umongo Petroleum of Durban, South Africa distributes base oils and lubricant additives in various regions in Africa for several multinational corporations, including Chevron, Evonik, BASF, BRB International and Innov Oil.
Umongo CEO Boston Moonsamy told a reporter that the acquisition of Orbichem will allow Umongo to continue its expansion into other parts of Southern Africa and sub Saharan Africa. Moonsamy said the deal shows that local companies can develop into significant regional suppliers for multinational players. CEO Cliff Classen will continue to lead Orbichem, according to Moonsamy.
Classen asserted that the African market is poised for growth but faces supply and logistics issues. “Not only will African consumers benefit from the comprehensive spectrum of oils offered but also from the technical expertise and the supply and logistics capabilities inherent in the company, said Classen.
Patrick Swan, former president of South Africa Institute of Tribology and managing consultant at Aswan Consulting, said in an interview that the acquisition of Orbichem by Umongo is a good fit when you consider that Orbichem is both a base oil and naphthenic distributor while Umongo is also base oil distributor for Chevron Oronite and other multinational brands. The acquisition will make Orbichem products more available on the market.