How To Start A Lucrative Engine Oil (Lubricant) Production and Supply Business In Nigeria and Africa

Engine oil, also known as motor oil or lubricating oil, is a viscous liquid that is used to lubricate the internal combustion engines of vehicles and machinery. It is composed of base oils and additives that provide protection and improve performance. Its scientific name is lubricating oil. The engine oil supply business in Nigeria and Africa deals with the distribution and supply of lubricating oil to various industries.

Nigeria is the largest oil producer in Africa and the 13th largest oil producer in the world. The engine oil industry in Nigeria is a multi-billion naira industry, with a high demand for engine oil due to the high number of vehicles on the road.

According to a report by Mordor Intelligence, the African lubricants market was valued at USD 2.8 billion in 2020 and is projected to reach USD 3.5 billion by 2026, growing at a CAGR of 3.4% during the forecast period (2021-2026). This growth is driven by an increase in automotive and industrial activities across the region.

Target Market For Engine Oil Products In Nigeria or Africa

Automotive industry: The automotive industry is a major consumer of engine oil, as every vehicle needs regular oil changes. The target market here includes car manufacturers, car dealerships, auto repair shops, and individual car owners.

Agriculture industry: The agriculture industry is another major consumer of engine oil, as tractors, harvesters, and other farming equipment require regular oil changes. The target market here includes large-scale farms, agricultural equipment manufacturers, and individual farmers.

Construction industry: The construction industry also uses a significant amount of engine oil, as heavy machinery such as bulldozers, excavators, and cranes require regular oil changes. The target market here includes construction companies, equipment rental businesses, and individual contractors

Industrial sector: The industrial sector encompasses a wide range of businesses that use heavy machinery, including factories, power plants, and mining companies. These businesses require large quantities of engine oil to keep their equipment running smoothly.

Marine industry: The marine industry also uses engine oil for boats, ships, and other watercraft. The target market here includes boat manufacturers, marinas, and individual boat owners.

Aviation industry: The aviation industry also requires engine oil for aircraft. The target market here includes airlines, aircraft manufacturers, and private plane owners.

Government sector: Government entities such as the military and public transportation services also require engine oil for their vehicles and equipment.

Export market: There is also a growing demand for engine oil in other African countries, providing opportunities for engine oil suppliers to export their products.

It is essential to understand the target market and develop a marketing strategy that caters to their needs. The process of production, packaging, and distribution must also be optimized to ensure quality and timely delivery. Investing in the right equipment and training personnel is crucial to achieving this.

Profitability: To produce a ton of lubricant, it will cost a maximum of $300. With the present increase in the prices of petroleum products, a ton will be sold at a minimum of $1,000; a gross profit of $400 per ton is accruable. With a mini-plant of 1 ton per day, working for 200 days, annual profit of $100,000 is guaranteed from this investment. This is no doubt, a good investment opportunity.

Prospects, Profit in Engine Oil Supply: Lubricant is a profitable business. This is because it is a fast moving consumer goods. On the average, depending on your economy, you can reap 10% profit of the amount invested. So when you invest N8,000,000, you can expect to get N500,000 – N1,000,000 as profit. , it is possible to turn over N500,000 two times before the month runs out. This can get better, the longer you stay in the business, the aggressive your marketers are, the higher your turnover.

Despite its profitability, the market is fiercely competitive. However, the sheer size of the market allows ample space for numerous sellers to enter the business,

Starting on a small scale: On average, to start the engine oil business in Nigeria on a favorable and profitable scale, you will need a minimum of N200,000.

If you intend to operate on a larger scale, such as a wholesaler, it becomes essential to invest in effective marketing strategies to ensure the success of your engine oil business, especially during its initial phases of operation.

Get a Warehouse: Depending on the quantity you are willing to buy for a starter, you may need to rent a space secured enough to house your products. This can be compartmentalized so that you can easily reach the specific product or brand that you need. It is important that you secure it physically so that thieves do not cart away your property.

Although most lubricants are in a plastic container, manufacturers put this containers in cartons. Ensure that your warehouse is not susceptible to rain fall. This may damage the cartons, thereby slowing down the sales. The heat generated by the sunlight too should be avoided as this may melt your grease and encourage leakage.

The engine oil supply business remains a viable investment opportunity in Nigeria and Africa. With the right strategy, dedication, and hard work, entrepreneurs can tap into the potential of this industry and achieve long-term success.

By developing a comprehensive marketing strategy that combines online and offline channels, emphasizing quality and competitive pricing, and leveraging partnerships, your engine oil business can build a strong brand presence and attract a loyal customer base.

How to set up a lucrative engine oil business, It contains procurement & installations of strong and durable machines, internationally acceptable packaging methods and how to explore the export markets

Click here to fill our application form:   https://forms.gle/jt7DaqkmobimT5PX8 

Our motivation is to see every Nigerian benefit from our Unique Income opportunity, specially focused towards a sustainable, entrepreneurial, and innovative future by connecting them to new ideas and skills Browse through our highly resource information over 500 Business ideas. https://www.facebook.com/share/188T881hZr/   This guide is designed to help business people including Micro, Small and Medium Scale Entrepreneurs navigate the legal and regulatory considerations relevant to starting-up and doing business in Nigeria.CLICK HERE Creating multiple streams of income can be a strong way to improve your personal finances. Whether you’re trying to boost your savings or build toward a goal, this is a move that many of the most financially successful Nigerians make.CLICKHERE