Business News of Tuesday, 19 August 2014


ZEN Petroleum pushes for part of US$40m business

Zen Petroleum, one of the indigenous oil marketing companies in the country, is confident of making a mark in the oil marketing companies (OMC) business in spite of the firm grip that multinationals have in the area.

The company started operations four years ago with a specialisation in fuel supply to the mining companies, a segment of the business that is even more challenging.

Although the company is young, its Managing Director, Mr William Kwadwo Tewiah, said it had grown its market share from zero per cent in 2008 when it started to about 50 per cent in the mine-fuel supply business.

ZEN Petroleum currently supplies about 10 million litres of diesel to some mining companies, including Goldfields Ghana Limited (GFGL).

It recently set up an agency in Mali to supply fuel to mining companies in that country with plans to establish another in neighbouring Burkina Faso.

These successes, according to Mr Tewiah, were due to the company's hard work and commitment to standards and quality, which has been inspired by a determination not to fail.

"When we go out for business, people will normally say that this is another Ghanaian company; they come with lots of promise and in the end they fade off. That alone is a motivation and it causes us to work three, four and five times harder to ensure that we do not fail," he explained.

The OMC business is worth some US$40 million a year and it is currently dominated by multinationals with Shell Ghana whose products are marketed by Vivo, and TOTAL being the biggest.

"If we do not take time, the OMC business will go the way of the telecoms, where there would be no Ghanaian business but just foreigners. Unless there is some policy direction to tilt the trend towards local businesses, then I'm afraid competition will take indigenous businesses out," he said.

The ZEN Petroleum MD explained that the company had in years gone by, been barred from bidding for certain contracts in the mining sector "simply because we are a local company.”

"We have had that experience before and you still have to compete with companies that are owned by oil traders who determine the price of oil going into a country, then it tells you the challenge we are facing," he added.

He therefore called on the National Petroleum Authority (NPA) and the Ministry of Energy and Petroleum (MoEP) to intervene with policies that would help grow indigenous businesses in the downstream business so as to ensure profit retention as against the capital flight that the multinationals normally engaged in.