Total Namibia is shaping up to leverage its international experience and reputation to establish a foothold in the country’s booming mining sector.
In March and April 2010, BP and Shell, who between them accounted for nearly half of Namibia’s fuel sales, announced that they would halt operations in the African country. Amid these developments, Seggie Kistasamy was appointed managing director of Total Namibia. He found himself in Windhoek as leader of the only major international oil company with a presence in a country which, while eclipsed in terms of economy and population by neighbouring South Africa, possessed amazing potential and ambitious plans.
Total commands a third of oil and gas production in Africa and is the continent’s top petroleum marketer. It has had an established presence in Namibia since 1968. Its current network extends to 28 retail service stations and 77 commercial sites scattered across the country.
Last November, Total moved into a prestigious new building in Windhoek. “Total House captures the ‘Total attitude’,” says an enthusiastic Kistasamy. “It perpetuates an environment that reflects boldness, cross functionality, mutual support and listening. The ultra-modern office building harnesses natural light and encapsulates the energy of our brand.”
A well established player in the retail fuel market, Total certainly stands to benefit from a somewhat less competitive environment. However the real opportunity lies in the expansion of industry, Kistasamybelieves. “The one market in Namibia we haven’t really tapped into is the commercial sector. In particular, Total has major contracts throughout the world with mining companies, but in Namibia we are absent from that market.”
An early priority for Kistasamywas to reposition the company’s internal structures to address this market and appoint a business development manager to cultivate that sector of the business. Mining is a rapidly growing and pivotal sector of the Namibian economy. Some of the largest uranium mines in the world are being built there, including Areva’s $1 billion Trekkopje mine, due to start production in 2012. Despite the setback to the nuclear industry brought about due to the recent Japanese earthquake, it is certain that demand for uranium will continue to grow. Namibia is currently the world’s fifth largest exporter.
In the mining industry, machinery and equipment utilised all require specialised lubricants, greases and oils—products that have been supplied by Total throughout Africa. “The process machinery, the extractors, the crushers, and the earth moving equipment all depend on specialised lubricants for their efficient functioning and dependability,” Kistasamysays. “We have tribologists who study the strategic requirements, the applications and equipment at a specific mine. Then they look for the matching products that will suit that equipment working in those conditions to reduce operating cost and extend the life of that equipment.”
Those specialised skills are not available in Namibia but the parent company is only a short hop away in Johannesburg, with massive experience gained in the mines of South Africa. Moreover, special requests can be referred to Total’s technical centre in France, the Centre Scientifique et Technique Jean Féger (CSTJF). Total Namibia also supports the government’s skills development programme, offering ongoing training to staff, contractors and emerging entrepreneurs. In addition, it currently sponsors bursaries and offers an in-house internship programme.
As it engages with the market, Total Namibia hopes to secure OEM contracts on the back of similar agreements already in place across Africa. Such a contract has already been secured with Toyota. “If a brand like Toyota has confidence in Total it demonstrates to the market that they are satisfied with our tailor-made service and the product,” says Kistasamy. “Total Namibia is the only I4001-certified petroleum company in Namibia. In addition, we subscribe to Total international safety standards.”
Namibia, like South Africa, is doing its best to encourage small traders and entrepreneurs from previously disadvantaged groups to establish themselves. However, inexperience can present challenges for both small businesses and their customers alike. It is one thing to become a supplier of petroleum products, but another to understand the product and the value chain. Without the right skills and funding, the environment, safety and eventually the customer’s profits can suffer. It can be a problem for the oil company too, Kistasamypoints out. “Once we become the supplier to an installation we become fully accountable for its operations and the environment as well; but some new local companies place us in an intermediate position—they sign an agreement, we supply the product, but then they walk away from the liability.”
Total Namibia’s solution has been to engage with those companies, train people and expose them to Total’s standards and best practices. “We want to help emerging companies even if they do not directly trade with Total. We help anyone who comes to us for assistance and wants to understand the market.”
An opportunity to put this policy into practice arose in November 2010. A small depot 200 kilometres north of Windhoek was due to be closed when the local market it had served dwindled. But a local businessman expressed an interest in keeping the facility open and running this fully fledged facility for storage, handling and distribution of petrol and lubricants. “Giving access to smaller companies is something the government is keen to do, so we provided the opportunity to grow the operation, while we took on the training and maintenance of the equipment.” Energy Solutions is trading under its own name and with the support of Total Namibia, will tap into niche markets, providing a customised service to small farms and businesses in the area.
Following the 2005 fire at the Buncefield depot in the UK, Total reviewed its entire infrastructure. “Our engineers and external consultants set minimum prescribed equipment standards for all storage facilities over 1,000 cubic metres in capacity. We set out a programme to refurbish our main transhipment and storage facility at Walvis Bay. This should be completed by the end of 2012.” The company is also refurbishing its other depots in Windhoek and Otavi, in the north of the country.
At present the Otavi facility is quite small, but in a growth area where a lack of storage facilities exists, he says. “We are upgrading it and bringing it up to Total Group safety and environmental standards. The ‘Invariant’ equipment exceeds the minimum statutory requirement for Namibia but we don’t compromise on standards and quality. Over the next few years, we plan to ensure that all our facilities comply not just with internal requirements but the best European standards.”
Namibia has declared Vision 2030—the date by which it wants to be considered as a developed economy. To achieve that, its infrastructure—particularly its port at Walvis Bay and its railways—will require significant investment. As such, there is a great deal of work to be done by Total: Kistasamy says he relishes the opportunity to support skills and expertise in the oil industry and promote the Total brand in Namibia’s mines and manufacturing industries. Tourists will be mainly aware of the network of service stations and can expect to see a big change here too, as they are refurbished and their range of services expanded.
