Kuala Lumpur-based Hyrax Oil Sdn Bhd is investing US$10 (RM30) million toward the establishment of a 24 million litres per year lube blending plant in Maputo, Mozambique, its first outside Malaysia. The investment will also include storage facilities at the nearby port of Matola.

A memorandum of understanding was signed last week between Hyrax Oil and Petroleos De Mocambique, S.A (Petromoc), the national company of Mozambique and the second largest oil company in the country, in which the two parties will register a company under the name of Petromoc-Hyrax Oil International Ltd. in a 70%-30% joint venture.

"The purpose of the new company is to build and operate a lubricant blending plant to manufacture and market a range of petroleum products, including automotive, industrial, marine and specialty lubricants", Managing director Datuk Hazimah Zainuddin said after the signing ceremony in Kuala Lumpur last week.

Hazimah added that the Malaysian company’s initial outlay of US$10 (RM30) million towards the approximately US$50 million project will ultimately up Hyrax Oil’s revenue of RM105 million by 20% to 30% this year. Currently, PetroMoc contributes about 5% to 10% to that figure.

Upon completion at year-end, the blending plant is expected to produce some two million litres of finished products monthly, and more in the future.

Hazimah said the new company intends to market its products not only in Mozambique but to all countries in Africa. Although the lubricant market size in Mozambique is only estimated at around 12 million litres per year, the other countries in the South African Development Community (SADC) demand up to 700 million litres per year.

The working relationship between the two companies began five years ago when Hyrax Oil started supplying lubricant products to Petromoc.

Hyrax Oil presently produces more than four million litres of finished products per month at its blending plant in Malaysia where it blends and markets a full line of lubricants including passenger car motor oil, diesel engine oil, four stroke motorcycle engine oil, two stroke gasoline engine oil, marine engine oil, automotive gear oil, transmission fluid, tractor fluid, industrial oils, transformer oils, specialty oils, greases and brake fluid.