Nigeria’s lubricant market has been growing and worth over $600m but the influx of sub-standard products and the absence of commercial laboratories for testing have slowed the growth of this industry. In this interview, Ayodapo Keshinro, general manager, sales and technical at Pacegate Limited told Stephen Onyekwelu about what the PG Lab is doing to reverse this trend.
Pacegate Limited is a subsidiary of the Hana Group of Companies, what is your operational profile?
The Hana Group of Companies was established in 1979 and specialises in building materials, household products and plastic manufacturing with a factory in Isolo, Lagos is known as Hana packaging.
Pacegate is one of the companies under the Hana Group and is a business to business (B2B) distributor of specialty chemicals, industrial greases as well as a leading manufacturer of United Nations certified steel drums. We are a customer-focused company and over the years have provided our customers with the best of products and services. Close to our desire to develop local capacity in manufacturing, we commenced steel drum manufacturing.
Our newest drive to improve the quality of testing services led to PG Labs, the first dedicated lubricants testing laboratory in Nigeria. It gives us great pleasure to offer our competence to the public and contribute to the growth of the lubricants business in Nigeria and Africa.
How significant is PG Lab to the growth of the Nigerian lubricant industry and market, what is going to change?
The Nigerian lubricant industry has come a long way from the international oil companies (IOC) dominating the market. Thirty to forty years ago we only had the multinationals; Shell, Total, BP, Agip and the likes dominating the market.
However, in the last 20 years, we have had many independent indigenous plants springing up. Currently, there are also some lubricant manufacturers in the country who do not have blending facilities. We also see a number of companies importing products from the Middle-East.
This proliferation of lubricants in the market highlights the need for local capacity that will enable proper independent testing within the country. In addition, many lubricant manufacturers are not fully equipped with the means to properly assess the quality of their products.
The Standards Organisation of Nigeria (SON) has set some standards as guidelines to ascertain lubricant quality; however, the unavailability and inadequacy of testing equipment has been a major issue. This is where we feel PG Labs has a significant role to play; we have enough capacity to carry out the necessary tests which are a game-changer in the industry.
In addition, SON can now check via PG Labs that lubricants meet all necessary parameters which were hard to do in the past due to the unavailability of testing equipment.
For example, shear stability, homogeneity and miscibility were tests that could not be carried out before now thus limiting the ability to assess the quality of the products. With PG Labs starting commercial operations, many companies bringing products into the country will be forced to meet up with the requirements because there is now a local laboratory where you can test products. Both regulators and businesses can have comfort that PG Labs is able to check for all necessary parameters and users will have a good idea of how genuine the lubricants are.
What forms of relationships exist between you and regulators of the lubricant industry, such as the SON?
We are completely independent of the Standards Organisation of Nigeria. We invited SON to our open day where we demonstrated our equipment and service offerings, then we had a discussion on how we can best be of service.
Before that, SON, was worried regarding the equipment unavailability for testing these parameters. They know the importance of testing but they haven’t been able to get laboratories that can test these parameters until now. Now that they are aware and have witnessed, they are very excited and happy to work with us. We are having further discussions with them and we are more like an answered prayer right now in the industry. We are also in the final process of registering with the Institute of Public Analysts of Nigeria (IPAN).
Tell our readers more about the laboratory.
The laboratory is open and it is affordable. As I said, the focus is to have international standard and reference that everyone can rely on, be comfortable with and rest assured of accurate results. It is not just for the makers of lubricants or regulators, there are people who buy lubricants for very expensive equipment.
For example, you have a gas engine generator; the gas generator is very expensive and capital intensive. As a user of such equipment servicing with lubricant, you would want to also monitor the equipment by carrying out preventive maintenance, so if there is any issue you will be able to identify it before it finally breaks down. That is where a lab like this comes in, you can just send your lubricant to the lab for condition monitoring, and it is preventive maintenance.
The engine oil is to machinery what blood is to the human body. When you go for a medical test, your blood is taken and diagnosis is given. It is the exact thing that happens in engines, you can take the lubricants they use, run the test and then advise depending on the result of the analyses. So it is not just manufacturers and regulators but also people who have expensive equipment that should be interested. PG Labs can go into contract with your organisation, run the test and advise you on the kind of engine oil to use as well.
For how long has the laboratory been here?
PG Labs just opened up to the customers in October 2019 after being International Standards Organisation (ISO) 17025 certified. We had our opening day on the 29th of October 2019 and we have since been open to the public.
So the ISO certification you got, what does it do?
The ISO certification is a quality management system certification. ISO is a world collection of countries coming together to form standards for management systems. It could be general organisation management, it could be environmental management, and it could be laboratory management.
In this case, ISO 17025 as it were, is for the laboratory. This is because we were going to service the industry we wanted to really give them a standard that is comparable to anywhere in the world so we went on with the ISO accreditation where we got the United Kingdom Accreditation Centre (UKAC) body to accredit us.
We are also working with the American Society for Testing and Materials (ASTM). All the tests at PG Labs are run according to ASTM manuals and procedures. We are participating in the ASTM proficiency testing programme, and how that works is that we receive their sample and send the test reports back to them.
All the labs across the world participate and then they plot a graph for z score to compare the results and then let you know how well you have done regarding the accuracy of your own test. All of this is to ensure that our customers have reliable, accurate and consistent results. The ISO accreditation also serves as proof of our quality assurance to clients or customers.
How do you handle samples for people outside Lagos?
They can send the samples through courier. We would test the samples and send a report to them via mail.
Do you plan to expand your services outside Lagos?
For now, no. Expansion for us would mean running more tests and getting more equipment. In time, we hope to increase our capacity to carry out more tests.
What other expansion plans do you have?
The Laboratory right now is catering to a specific test, but of course, we will do more over time. We will bring in more equipment, run more tests; a wider range of tests both for lubricants and other products.
What kind of policies do you think the government needs to implement or put in motion help the sector?
Over the years, there has been a lot of dialogue with the Government to ban importation of finished lubricant into the country, so far they have increased the tariff on the importation of finished lubricants but that is not enough because people still find a way to bring these lubricants into the country and sell cheaply thereby killing the local manufacturers. If it is banned, many plants will increase their capacity and the market will be there for local production.
Nigeria has enough blending plants to cater to our customers’ needs as of now. As we develop further and our motorisation rate improves, we may then have a gap, but for now, we have about 60 cars per thousand Nigerians, which is still a very low motorisation rate. As at last year, according to the National Bureau of Statistics (NBS) we only had about 11.8 million cars on the road, which is still not enough. Going by these numbers, we have enough blending plants that can meet customers’ needs in Nigeria and by extension West Africa.