The International Resource Journal

Transcription

1 PETROTRADE

2 Onsite zimb petr 2 October 2009

3 Sudbury abwe s otrade navigates currency change to success By Anna Guy The name Zimbabwe is derived from Dzimba dza mabwe, meaning great houses of stone. The natives to this country are made of the same strength imbedded in its name. Business in Zimbabwe has its own unique challenges, and if you are armed with knowledge of the local culture and a keen sense of trade, it can have its own unique rewards. October

4 MINING In recent years, Zimbabwe has been affected by acute hyper inflation. In November 2008, Zimbabwe s official currency, the Zimbabwe Dollar, showed annual inflation figures of 89.7 sextillion (10 21 ) percent. The largest denominated note ever printed by the Zimbabwe Reserve Bank and in circulation before the dollarization of the economy was 100 trillion Zimbabwe Dollars, which equated to far less than one U.S. cent. However, printing of the Zimbabwe dollar was abandoned in April 2009 in favour of a dual currency of the South African Rand and the United States Dollar. Such hyperinflation would have been paralyzing to most business and communities, had locals not devised alternate ways to trade. Prior to the desertion of the Zimbabwe Dollar the only thing allowed to be sold legally in foreign currency were fuel coupons. Fuel coupons started to form a pseudo currency. The demand for and value of oil is so high that it sustained and continues to significantly contribute to the economy. Although turbulent, such economic undulations over the years have not deterred a company such as Petrotrade from establishing themselves in the market. This South African- 4 November/December 2009

5 PETROTRADE based company, with roots firmly lodged in Zimbabwe, has thrived in this unique climate. The founders and directors of Petrotrade and Refuel Carriers, trading and logistics companies, started out in Zimbabwe and selling tires in the Sub-Saharan region in Five years later, a demand for fuel started to emerge, which Petrotrade used it ties to transport companies to meet. What started as a few tanker loads of fuel to a small segment of the market quickly evolved into the company s core focus. The company grew on reputation and dedication. Its ability to maneuver and navigate the ever changing economic platform set it apart from major oil companies who are less adjust to the idiosyncrasies of trade in the region. The company remains competitive by offering flexible delivery solutions to its customers and optimal pricing, the achievement of which is no small feat. Refuel Carriers commenced in 2004 and specializes in the transportation of fuel. It operates a fleet of 20 vehicles and an additional contracted fleet of eighty trucks for the sole purpose of delivering fuel into the region on behalf of Petrotrade. Owned and operated by the directors of Petrotrade, November/December

6 MINING Refuel Carriers has complimented Petrotrade s business, allowing for further flexibility, better control and ultimately greater customer satisfaction. Furthermore, Refuel Carriers holds an export delivery contract with Sasol Oil, as well a contract to deliver fuel within South Africa, with their local partner Ndleleni. Petrotrade has a long standing supply agreement with various major oil companies around the world to ensure continued competitiveness in an evolving industry. Supplying commercial, industrial and retail users when each comes with their own set of challenges requires ingenuity. Full house deliveries, fuel in block trains and customer own collect all form part of the company s portfolio. Petrotrade and Refuels business extends as far as Botswana, Zambia, the Democratic Republic of Congo (DRC), Mozambique and South Africa, though none are more challenging or rewarding than Zimbabwe. The International Monetary Fund released the following statement regarding the state of the Zimbabwean economy: The economy has begun to recover in 2009, albeit from a low base. Since early 2009, the government has broadly adhered to cash budgeting, achieved a significant improvement in budget revenue, established a multi-currency system and largely liberalized prices and the exchange system. As a result of these improved policies, real GDP is projected to grow by about 3 percent. Credit expansion, led by post-hyperinflation remonetization and capital inflows, is supporting economic activity. Petrotrade would have to agree that the country has come a long way from when the price of goods would change three times a day due to inflation, shelves were poorly stocked and businesses were offering foreigners a 99 per cent discount if they paid in foreign currency. Unfortunately, increased costs have arisen as part of this economic reform; previously, import duties on fuel were less than a percent of the equivalent cost of fuel. Overnight, duties grew in excess of 50 per cent. There were no systems in place to accommodate such a move, and whilst positive for the economy in the long run, it resulted in gridlock at border posts. Importers could wait as long as two weeks for the implementation of this new system. Since then, duties have changed three times in six months with no prior warning. The day-to-day situations confronting Petrotrade & Refuel are not unique to them. 6 November/December 2009

7 PETROTRADE Petrotrade (Pty) Ltd has been in operation exporting Bulk fuel products within the SADC region since Most business operation emphasis is placed on bulk supply of product however Petrotrade operates 5 successful commercial retail fuel sites in Zimbabwe in partnership with other traders for the benefit of Bulk Vehicle Operators travelling through the region. The majority of Petrotrade product originates from Sasol Oil Ltd, however strategic supply relationships have developed with other suppliers in order to meet growing demand and increased competition. Petrotrade has been trading with Sasol Oil from its inception, consequently a strong relationship has developed and Petrotrade is a preferred client of Sasol Oil. The managing members of Petrotrade (Pty) Ltd have combined trading experience within the region in excess of 14 years. PRODUCTS INCLUDE Unleaded LRP93 Turbo Unleaded ULP93 Diesel (5000ppm) Diesel (500ppm) Illuminating Kerosene Jet Fuel LPG Furnace Heavy Fuel Oil (HFO)G SERVICES INCLUDE Bulk Trade Logistics Fuel Depots Oils & Lubes November/December 2009 Phone: Fax: sales@refuelsa.co.za Website: 38 Saturn Crescent Linbro Business Park Sandton South Africa 7

8 MINING Rather, they are characteristic of the industry. All Zimbabweans deal with these on a dayto-day basis, never marred, ever optimistic. Despite everything, Petrotrade, a relatively small company of 50 people, can supply 10 million litres a month and gross $100 million U.S. in turnover, annually. Expanding their customer base, furthering their infrastructure, improving storage facilities and extending their service delivery into shipping all form part of their strategy for improved market placement in the future. With their strong foundations, intimate knowledge of African Trading which might not always enjoy the protocol and systemization prevalent in first world countries, an understanding of Zimbabwe s cultural and economic nuances and their tenacity to forge ahead, Petrotrade remains a healthy business with better than good volumes and is an important contributor to the positive direction Zimbabwe is heading. GRW Engineering We design and manufacture a wide range of road tankers and intermodal tank containers in various configurations. Every tank is designed and built to meet each customer s specific requirements. Our range of road tankers are designed for the transport of chemicals, acids, LPG, automotive and aviation fuel, dry bulk,edible and black products. AFRICAN RAIL COMPANY Rail Based Logistics Solutions in Africa Website: info@africanrailco.com Good quality tanks based on outstanding technology with consistent attention to detail 8 November/December 2009

9 PETROTRADE November/December