Feasibility Report and Business Plan for Lubricant Oil Blending and Manufacturing Plant in Tanzania
Introduction
Lubricants are substance normally in a liquefied form that is introduced between two moving parties to reduce the friction between them, thereby improving efficiency and reducing friction.
Friction is what you get when you rub your hands together. Your hands get warmed when you rub them because of friction.
There’s always friction when the two objects in contact rub against each other. But there are a lot of parts moving over each other in an engine, and the rest of an automobile, so there’s a lot of friction, a lot of wear, a lot of heat.
The key characteristics of good lubricants are:
Lubrication is the ability of lubricants to lubricant moving parts and reduce friction.
And Viscosity: Viscosity is the resistance of a fluid to flow.
A lubricant manufacturing plant is a facility that produces and package and distribute numerous type of lubricants oil products including greases, brake fluids, engine oil, etc.
Market Outlook
The lubricant oil sector divided into two main segments including an automotive and industrial segment
The automotive sub-market of the lubricant oil industry holds the 60% market share, and the industrial sub sector holds 40% broadly, the lube market is segmented into five regions. These areas are Tanzania, Asia Pacific, Europe, North, America, The Middle East & Africa, and South America. The Asia Pacific is the largest market for lube followed by Europe.
The industry project that India’s automobile lube oil market will reach $ 9.6 billion by 2022 in the future also, the growing consumer awareness regarding the use and advantages of engine oils and other lubricates is another major reason.
In the automotive segment, cars, two-wheeler, and three-wheeler segments account for 40% of the markets however, diesel operates engines, trucks and other heavy vehicles have the bulk share of the rest 60%.
The increasing number of passenger and commercial vehicles in the region is fueling the growth of the lube market hence, starting a lubricates manufacture business is a highly lucrative business for entrepreneurs who want to start a business in the growing lubricant industry in Tanzania and Africa.
Problem
There is a shortage of lubricant oils production plants in Tanzania. Local market production of lubricants is very few in the country. This led to the importation of substandard lubricants, mainly in Arab countries, South Africa, and Kenya. In turn, it results in the proliferation of the dealers who supply
the substandard oils in the maker and causing damage to cars and machinery that drive significant losses to consumers.
The project describes the investment cost and benefits of setting up a small-scale lube oil blending plant in Tanzania.
The proposed plant can also be established anywhere in the country as its end product is consumed widely and generally in Tanzania.
The unit will be using modern semi-automated machinery for all the processes, ensuring quality checks.
There is not the specific time required for the entry time in the sector. As the need is increasing day by day due to the increase in population and industrialization, investment can be made any time during the year.
Project Indicators:
Plant Capacity: 300,000 liters
Project investment cost: USD 3 million
Profit after tax in the first year: USD 2.5 mil in the first year
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In the full version, you will have access to the following table of contents:
- Overview
- Market outlook
- Market analysis for lubricant market in Tanzania
- Regulation, Permit and Licenses to start lubricant plant in Tanzania
- Production plan.
- Production process
- Raw material requirement
- Land size requirement
- Management and business structure
- Working capital requirement
- Operation costs of the plant (Including salaries for employees, warehouses, land, etc)
