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Lubricant / Engine Oil Production in Nigeria; The Feasibility Report.

Lubricant / Engine Oil Production in Nigeria; The Feasibility Report.

150,000.00

Engine / Lube oil is a substance (often a liquid) introduced between two moving surfaces to reduce the friction between them, improving efficiency and reducing wear. They may also have the function of dissolving or transporting foreign particles and of distributing heat.

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Description

Lubrication of the engine parts is the vital function of an engine oil. The engine oil lubricates the engine parts for its efficient movement, thereby reducing the extent of metal contact, friction, and heat generation within the engine.

In addition, cleaning & cooling the engine parts, sealing the gaps, and rust prevention are the other functions carried out by the engine oil. Engine oils are prepared by addition of substances, such as viscosity index improvers, antioxidants, metal detergents, and others to the base oil. The kind of oil used in vehicles varies depending upon the engine type.

Lubricating oil should have the following properties: They should not change their viscosity as operating temperature changes should not easily oxidize and produce sludge’s and gums, should protect engine parts from corrosion, should also act as coolants that take away frictional heat, should have detergent properties that keep the machine surfaces clean by constantly removing and dispersing foreign matter etc.

The most important physical characteristics of lube oil are viscosity and flash point.

The oil should be viscous enough to prevent metal contact besides reducing viscous drag. Flash point is the temperature at which oil forms an ignitable mixture with air when it is heated under specified conditions.

It denotes the presence of volatile constituents in oil and is indicative of the temperature up to which it can safely be used.
Lubricants for their applications can be broadly classified into:
• Industrial lubricants • Automotive lubricants • Aviation & Marine grade lubricants
Sometimes special features such as energy conserving ability, smokeless ness, chemical and theological design are also either described or implied by the use of certain labels, special labels like “All Synthetic” signify the use of exotic base fluids.

While the Society of Automotive Engineers (SAE) grades are used universally to specify viscosity characteristics and low temperature rheology of motor oils, several systems of rating the performance level coexist in the global marketplace.

Probably, the most popular motor oil performance categories are those that have been instituted by the American Petroleum Institute (API).

Apart from the API, there exists several independent motor oil certification and labeling systems including the US military, Committee of Common Market engine Constructors (CCMC) in Europe and JASO (Japanese Automotive Standards Organization).

The Bureau of Indian Standards (BIS) performance categories of Engine crankcase oils are generally drawn from the various API categories, US military specs and CCMC categories.

In additional to the performance categories and labels of the above mentioned Technical Societies and Institutions, several labels of approvals by European, Japanese and U.S. OEMs (Original equipment Manufacturers) arc also abundantly found on motor oil cans.

Such labels are very often used by oil marketers to achieve market/product segmentation and to embellish the performance superiority claim over specification products.

API uses an alphanumeric code lo classify Engine Oil performance. The first alpha character, either S’ or ‘C’ indicates the application. ‘S’ (Service) is used for gasoline engine oils and ‘C’ (Commercial) for diesel engine oils.

The second alpha character of the label indicates on an open scale, the increasing severity of application and proportionally ascending performance level. For example: SG and CD are higher in performance as compared to SF and CC respectively.

In the case of a few Diesel engine categories, a. third numeric character may also exist; ’II’ indicating a special category for 2 cycle diesels (like CD II) and ‘4’ indicating a normal 4cycle category (that is CF 4).

Each category describes the severity of the engine application or the vehicle model year corresponding to it.

Apart from important application in internal combustion engines, vehicles and industrial gear boxes, compressors, turbines or hydraulic systems, there are vast numbers of other applications, which mostly require specifically tailored lubricants.

The Global Engine Oil market was valued at around twenty-two thousand (22,000) kilo tons in 2020 and the market is projected to register a compound annual growth rate (CAGR) of greater than two percent (2%) during the forecast period (2021-2026).

The market for Nigeria lubricants is expected to reach three hundred and thirty-nine point fifty-two (339.52) kilo ton by 2026, registering a compound annual growth rate (CAGR) of one point fifty-four percent (1.54%) during the forecast period (2021-2026).

The total official lube produced in Nigeria is about one hundred and thirty-five million (135,000,000) litres, although unofficial figures put it at two hundred and seventy million (270,000,000) litres per annum. Imports to Nigeria are about sixty million (60,000,000) litres annually.

The demand from the expanding wind energy sector and the rising demand for high-performance lubricants are the major factors driving the growth of the market studied.

Increasing economic development and rising middle income is set to stimulate the demand for passenger and commercial vehicles in Nigeria.

This report seeks to examine the financial viability or otherwise of establishing a lube oil blending plant in Nigeria using base oil (SN 150) and additives as the basic raw material.

Practically lube oil contain ninety percent (90%) base oil (most often petroleum fractions, called mineral oils) and less than ten percent (10%) additives.

Vegetable oils or synthetic liquids such as hydrogenated polyolefin, esters, silicones, fluorocarbons and many others are sometimes used as base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity index, resistance to corrosion and oxidation, aging or contamination, etc.

The capacity of the proposed plant is ten thousand (10,000) litres per day and the plant would operate at eighty percent (80%) of the installed capacity for triple (3) shifts of eight (8) hours each per for three (300) working days per annum.

Table of Contents

EXECUTIVE SUMMARY
1.0    Business Overview

1.1 Description of the Business
1.2 Vision and Mission Statement
1.3 Business Objective
1.4 Value Proposition
1.5 Critical Success Factor of the Business
1.6 Current Status of Business
1.7 Description of the Business Industry
1.8 Contribution to Local and National Economy

2. Marketing Plan

2.1 Description of product
2.2 Product Packaging and delivery
2.3 The Opportunity
2.4 Pricing Strategy
2.5 Target Market
2.6 Distribution and Delivery Strategy
2.7 Promotional Strategy
2.8 Competition
3. Production Plan

3.1 Description of the Location
3.2 Raw Materials
3.3 Production Equipment
3.4 Production Process
3.5 Production Cost
3.6 Stock Control Process
3.7 Pre-Operating activities and expenses
3.7.1 Operating Activities and Expenses
3.8 Project Implementation Schedule

4.0 Organizational and Management Plan

4.1 Ownership of the business
4.2 Profile of the promoters
4.3 Key Management Staff
4.3.2 Management Support Units
4.4 Details of salary schedule

5. Financial Plan

5.1 Financial Assumption
5.2 Start- up Capital Estimation
5.3 Source of Capital
5.4 Security of Loan
5.5 Loan Repayment Plan

6.0 Business Risks and SWOT Analysis

6.1 Business Risks
6.2 SWOT Analysis

Report Details

Report Type: Pre- Feasibility Report
Formats of Delivery: EXCEL / MS WORD
No. of Pages: Text – 49 Pages /Excel – 6 Pages
Product Code: FORA/09/2016/ENGINEOILPRODUCTIONINNIGERIA/8623-26225-0
Publisher: Foraminifera Market Research
Release Date: 10/06/2021; Update Every 3- Months
Language: English
Delivery time: 24– 48hours

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