The aim is to get a fair deal for Batswana in the lucrative energy sector where P60 million accrues exclusively to international oil companies per month as fees for importing 120 million litres of fuel. A good start to realisation of an ambitious vision full of power plants and energy mills has been made by means of a partnership with Dubai-based ENOC for the supply of unbranded products to filling stations. KEABETSWE NEWEL reports.
Boswa Energy Africa is a 100 percent Botswana citizen-owned company that is licensed to provide wholesale petroleum and oil refinery products. It is set up to meet the needs of Africa by eliminating the energy deficit, in the process creating opportunities and improving lives. Some of the services it offers are filling station franchising, fuel depot development and management and supply of bulk fuel and lubrication.
The company recently introduced its fuel brands, namely FuelPrime ULP95 and FuelEco ULP93, and secured an exclusive distribution partnership with Emirates National Oil Company (ENOC), a Dubai-based entity, for the lubricants end of their business model.
The CEO of Boswa Energy, Tumelo Sealetsa, says from its humble beginnings in 2016, Boswa Energy identified a gap in the energy sector and realised that it had the potential to help diversify the economy and create jobs. To attain this, Sealetsa says, it would enter into partnerships with other determined entrepreneurs eager to venture into the same industry with a view to empowering other locals.
“There is a gap between locals and our industry, which is penetrated by international players,” he notes. “For us to close it, we need partnerships and to come up with ways of working together. We envision haing about 54 filling stations by 2022 in Botswana and across SADC, tagging along with some locals to realise this.”
Several international oil companies (IOCs) have for years profited from Botswana’s fuel industry, with limited participation by Botswana owned companies. Limited participation in the petroleum space by citizen companies means that the profits and industry perks are only enjoyed by multinationals. Selaetsa feels it is time citizen-owned companies compete in the space.
Botswana currently consumes around 1.2 billion litres of fuel annually, according to available data. This means that only IOCs are currently responsible for importing that oil into Botswana. What they do is place orders from their mother companies outside Botswana, which are then be supplied to their subsidiaries operating in Botswana. According to industry players, when importing oil into Botswana, the supplier benefits from fees known as supply margins. If importation of oil was done by Botswana-owned companies, these supply margins would accrue to them.
With Batswana consuming 120 million litres per month, IOCs making the orders benefit more than P60 million as Industry Supply Margins per month. Sealetsa says Botswana-owned companies can – and should – tap into this wealth to empower themselves and the local economy. Doing this could also lead to expansion of local fuel companies and create employment while the dividends remain in the country. To that end, Boswa Energy has entered into a partnership with Dubai-based ENOC.
In terms of this partnership, Boswa Energy will distribute lubricants from Dubai and sell them in Botswana. The company also stands to benefit in skills transfer as its staff are to get training in Dubai. “Our franchisees will also benefit in this endeavour because they also get an opportunity to go and get training in Dubai,” Sealetsa emphasises. “We also consider exploring other business opportunities because ENOC also does other businesses, such as supply of aviation fuel which we want to venture into in the near future.”
Having realised the gap in the energy sector, Boswa Energy found it fit to penetrate the energy field in Botswana with a quest to take over an existing niche. Sealetsa says his company’s entrance into the foreign dominated petroleum, gas and power generation market has shown them that Botswana’s needs are more than they estimated and brags about experienced personnel running their daily activities.
The company has many projects in the pipeline, mostly for empowerment and improving its standing in the market. Sealetsa says Boswa recently began to focus on retail business with the company inviting people to apply. The retail franchise project is there to facilitate business advisory and help aspiring business owners from inception to operation. “The project aims at equipping those with a desire to venture into the energy sector with enough skills to persevere in it,” he emphasises.
As part of creating awareness, since February this year Boswa Energy has conducted three interactions with all their franchise applicants, giving updates on projected commencement dates and shortlisting processes as part of Vision 2022. The company’s interaction with the Botswana Oil Limited (BOL) and the Chamber of Mines has ‘lubricated’ its involvement and aggression in the local energy market. This was after a look at the import bill and realisation that Botswana consumes but does not produce oil and oil products. Its inability to produce means the country ends up a net importer who enriches other countries with money that could be circulated within the country.
Boswa Energy is well equipped with cross-border partnerships because it leverages on the CEO’s experience in South Africa’s energy field. Sealetsa’s association with JRD Company as Chairman and having served at Hertford as a director has positioned him well to identify trends and keep apace of developments across the market. Boswa’s association with Mzesi Energy, which is one of the largest energy companies in South Africa, will ensure that when the time comes, supply is available, Sealetsa notes.
Speaking with the fervour of patriotism, the CEO of aptly named Boswana Energy explains that the company will be built to a state where it is associated with ordinary people, noting that the market has accepted the brand and it is off to a good start. Boswa’s recent venture of engaging local filling station owners to become a part of the game has proved successful. The company will be providing unbranded filling stations with the use of its branding, a move that should ensure that more and more franchisees shift to the brand as time goes on.
Boswa is striving to create a well-known brand that everyone can identify with and is calling out to investors to support realisation of this dream. The company intends to build its own power plants and facilitate energy mills that can support the whole country and export to others. Sealetsa emphasises that as soon as Boswa reaches this point, Botswana will reduce its oil import costs and in turn save and make considerable revenues. The first project on the company’s extensive list of acquired filling station plots is already under construction and should be operating by November this year.