The Nigeria Automobile Technicians Associations endorsement of Nigerian blender Ammasco International Ltd.s lubricants under a recently reached agreement could be a first step towards more domestic independents gaining a larger shares of the nations lubricants market.
The content of the memorandum of understanding, obtained by Lube Report, grants Ammasco the sole right to produce customized lubes for members of NATA throughout Nigeria. The association will emboss its logo on all Ammasco products as a mark of endorsement and certification of its quality. All NATA selling points across car garages and mechanic workshops in Nigeria will stock Ammasco products, with a certain percentage of sales revenue going to NATA, said Shola Olorunfemi, media consultant to the technicians association in its Abuja office.
According to Olorunfemi, the memorandum was preceded by six months of painstaking research, testing, and a survey before Ammasco was certified fit as NATAs sole blender. The technicians know the products that work well, so for them to pick Ammasco means they are outstanding in terms of quality, Olorunfemi said.
The technicians endorsement is strategic for independent blenders seeking a foothold in the Nigerian lubricant market. In 1995 Lubcon International, a leading independent, leveraged NATAs wide reach to entrench its brand on the market.
We understood that they are the decision makers in terms of the choices, and being able to win their trust was very strategic, Taiye Williams, managing director of Lubcon International, had told LubesnGreases Europe-Middle East-Africa.
This past experience informs the competition for NATAs endorsement among independents in Nigeria. The memorandum is therefore considered a masterstroke for Ammasco, considering that the associations automobile technicians as end users will give preference to its products, in advising car owners on the choice of lubes for their cars.
Let me add that what happens today is a step towards the right direction. We will not renege on our part as we are ever ready to make the best out of this deal, said Abdulrasaq Sabo, manager Administration for Ammasco.
However, Lubcon says its market has not been affected by the new agreement between NATA and its new partners but instead insists its partnership with the association continues.
Lubcon is not perturbed by the MoU between NATA and Ammasco because we know that a court ruling will bring the situation to normalcy soon. The active members are still with us and that is what matters, Williams told Lube Report. Olorunfemi, however, said there is no disagreement in NATA because one of its members, who earlier went to court, had withdrawn and settled its differences.
Olaniyi Okedairo of Velvet Hill Consulting described the partnership as a welcome development for the Nigerian lube sector. It marks a significant development in the growth of indigenous lubricants companies, Okedairo said.
Okedairo anticipated the partnership will have great impact on the quality of products that would be coming out from Ammascos plant and also other companies that would like to go into such partnership in future.
Emeka Obidike, executive secretary of Lubricant Producers Association of Nigeria (Lupan) concurred that Lupan sees the partnership as an indication of positive developments in the Nigerian lubricant sector. The NATA-Ammasco agreement shows confidence in Lupan members ability to sustain the local market with quality lubes that are in conformity with local and international standards, Obidike said.
Obidike noted that the partnership opens a vista of opportunity for Lupan members to partner with other notable bodies such as the NATA in Nigeria. Okedairo agrees that it would encourage other relevant bodies and organizations to patronize lubricants produced in Nigeria.