petrotrade - The International Resource Journal

PETROTRADE
Onsite
zimb
petr
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The International Resource Journal
October 2009
Sudbury
babwe’s
rotrade
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 2009
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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 (1021) 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 African4
The International Resource Journal
November/December 2009
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 1998. 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,
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MINING
Refuel Carriers has complimented Petrotrade’s
improvement in budget revenue, established
business, allowing for further flexibility,
a multi-currency system and largely liberalized
better control and ultimately greater customer
prices and the exchange system. As a result of
satisfaction. Furthermore, Refuel Carriers holds
these improved policies, real GDP is projected
an export delivery contract with Sasol Oil, as
to grow by about 3 percent. Credit expansion,
well a contract to deliver fuel within South
led by post-hyperinflation remonetization and
Africa, with their local partner Ndleleni.
capital inflows, is supporting economic activity.”
Petrotrade would have to agree that the
Petrotrade has a long standing supply
agreement with various major oil companies
country has come a long way from when the
around the world to ensure continued
price of goods would change three times a day
competitiveness in an evolving industry.
due to inflation, shelves were poorly stocked
Supplying commercial, industrial and retail
and businesses were offering foreigners a 99 per
users when each comes with their own set
cent discount if they paid in foreign currency.
of challenges requires ingenuity. ‘Full house’
Unfortunately, increased costs have arisen as
deliveries, fuel in block trains and customer ‘own
part of this economic reform; previously, import
collect’ all form part of the company’s portfolio.
duties on fuel were less than a percent of
Petrotrade and Refuels’ business extends as
the equivalent cost of fuel. Overnight, duties
far as Botswana, Zambia, the Democratic
grew in excess of 50 per cent. There were
Republic of Congo (DRC), Mozambique
no systems in place to accommodate such a
and South Africa, though none are more
move, and whilst positive for the economy in
challenging or rewarding than Zimbabwe.
the long run, it resulted in gridlock at border
The International Monetary Fund released the
posts. Importers could wait as long as two
following statement regarding the state of the
weeks for the implementation of this new
Zimbabwean economy: “The economy has begun
system. Since then, duties have changed three
to recover in 2009, albeit from a low base. Since
times in six months with no prior warning.
The day-to-day situations confronting
early 2009, the government has broadly adhered
to cash budgeting, achieved a significant
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The International Resource Journal
Petrotrade & Refuel are not unique to them.
November/December 2009
PETROTRADE
Petrotrade (Pty) Ltd has been in operation exporting Bulk fuel
products within the SADC region since 2003. 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: +27 11 608 3636
Fax: +27 11 608 3882
E-mail: [email protected]
Website: www.refuelsa.co.za
38 Saturn Crescent
Linbro Business Park
Sandton
South Africa
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MINING
Rather, they are characteristic of the industry.
With their strong foundations, intimate
All Zimbabweans deal with these on a day-
knowledge of African Trading which
to-day basis, never marred, ever optimistic.
might not always enjoy the protocol and
Despite everything, Petrotrade, a relatively small
systemization prevalent in first world countries,
company of 50 people, can supply 10 million litres
an understanding of Zimbabwe’s cultural
a month and gross $100 million U.S. in turnover,
and economic nuances and their tenacity to
annually. Expanding their customer base,
forge ahead, Petrotrade remains a healthy
furthering their infrastructure, improving storage
business with better than good volumes and
facilities and extending their service delivery
is an important contributor to the positive
into shipping all form part of their strategy for
direction Zimbabwe is heading.
improved market placement in the future.
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.
A F R I C A N R A I L CO M PA N Y
Rail Based Logistics Solutions in Africa
Website: www.africanrailco.com
Email: [email protected]
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November/December 2009
“Good quality tanks based on outstanding technology with consistent attention to detail”
www.grw.co.za
PETROTRADE
November/December 2009
The International Resource Journal
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PETROTRADE:
1 Anwar Elmofty St., Dev. & Hou.
Bank Buildings - Nasr City
TELEPHONE: 202 226011 79
FAX: 202 2260 13 07
EMAIL: [email protected]
EMAIL: www.petrotrade.com
As seen in the November/December 2009 issue of The International Resource Journal