Energy  

Nigeria, Angola as Africa’s hub for offshore oil, gas

Oil-plant-CopyNigeria and Angola present attractive growth and operational expansion opportunities for manufacturers in the offshore oil and gas paints and coatings market, according to a report by Frost & Sullivan, a South African-based growth partnership company.

With raw material availability and local manufacturing capabilities catalysing production and supply lines, the two countries are rapidly emerging as the African hub for the offshore oil and gas paints and coatings market, the report said.

The report, entitled, “Analysis of the Offshore Oil & Gas Paints and Coatings Market in Nigeria and Angola,” found that the market earned revenues of $675.1 million in 2014 and estimated this to reach $1.13 billion in 2019.

The report, which covered offshore oil and gas facilities, dry docks and fabrication yards, show Nigerian and Angolan offshore oil and gas paints and coatings markets would grow at a compound annual growth rate of 9.6 per cent and 12.3 per cent respectively until 2019.

The company said local production in Nigeria supplied 30 per cent to 40 per cent of the local demand, leaving the remainder supplied through imports, while in Angola, only 6 per cent of offshore oil and gas paints and coatings are manufactured locally.

It said the distribution of local brands supported by sales of international brands would ensure long-term growth in the Nigerian and Angolan markets.

The total offshore oil and gas paints and coatings market in Nigeria was estimated at 24 million litres in 2014 and has an expected market volume of 37.9 million litres by 2019, according to the report.

Industrial protective coatings is the fastest growing segment in the market, the company said, adding that the development and construction operations in ports such as Lagos and Luanda presented significant growth opportunities.

Abdul-Baasit Abdullah, research analyst, Frost & Sullivan Chemicals and Materials, said, “The subsidisation of manufacturing makes Nigeria and Angola vital to the production of offshore oil and gas paints and coatings in Africa, with the goal of African needs being fulfilled by African countries. The drop in crude oil prices has reduced the base costs of paint through a reduction in raw material cost of 8.3 per cent, driving competitive pricing and consumption.”

The company said construction of local production facilities would be vital to ensuring cost-competitiveness, as transport costs of raw materials are steep, adding that local construction would be further justified once higher import tariffs are implemented by the Nigerian and Angolan governments.

As import duties are lower for unfinished than for finished goods, suppliers could consider setting up a local presence in the form of a mixing plant where imported raw materials are blended, Frost & Sullivan said.
“While in-country manufacturing is a must-have, building a brand reputation will be essential for long-term, sustainable growth. Partnerships between local and international companies will speed up the development of high-quality products and assist offshore O&G paints and coatings manufacturers in meeting demand in the Nigerian and Angolan markets,” noted Abdullah.



No Comments yet

Related