FuelServe Petroleum branches out into Africa

In just over two years since joining the Shanduka Black Umbrellas programme, Fuelserve Petroleum has grown tremendously and is now at QSE (Qualifying Small Entity) level. This means the business is now generating an annual turnover of between R10 million and R50 million. Having started operations in 2014, the business now has a fuel distribution wholesale licence and two bunkering licences at the port of Port Elizabeth and Port of Ngqurha.

In October 2016 the business purchased a fuel tanker worth R2.7 million, integrating backwards in the value chain; this has created another income stream for its logistics division.

When Fuelserve started in 2014, Zambia was one of the first markets that it identified but, the business could not exploit the opportunity then due to capital constraints. Fuelserve could not meet the strict cash on delivery terms required for all transactions as it did not have access to sufficient working capital.

As soon as Fuelserve had access to the much needed working capital reserves, relationships with partners, customers and suppliers were reactivated. An initial order of 160 000 litres of fuel has already been placed with the business, which equates to four truck loads. In the long-run Fuelserve is expected to deliver these volumes on a weekly basis.

Although the profit margins differ from customer to customer, the Zambian market offers better profit margins than in South Africa. Entry to this market also offers investment opportunities in both wholesale and retail.

Administration and execution for the Zambian office will take place in the Port Elizabeth head office, presenting an opportunity for development and better earnings for the current employees. “We are delighted about this milestone and at the huge business growth of Fuelserve. This is a first for SBU Port Elizabeth; we are excited that one of our client businesses is branching out to Africa.” remarks Nomaxabiso Klaas, SBU Port Elizabeth Regional Manager.

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