Dalol Oil SC, which is one of the four Ethiopian owned oil companies, announced that it will begin supplying alternative energy products for the manufacturing sector. The company that began operating in the beginning of 2012 has stated its intention to begin importing coal and petroleum coke (pet coke) in the current budget year.
Currently, National Oil Ethiopia (NOC) is the only supplier of these two products, and now Dalol will be the second.
According to Serkalem G.Kirstos, CEO of Dalol Oil, the company began importing bitumen/asphalt last fiscal year in addition to the usual lubricant and petroleum (fuel) import.
During its second year of operation the oil firm registered significant profit even though it is usual to take a loss for five years in that industry.
The CEO said that the new energy supplies that the company introduced in the past budget year has played a major role in the company’s success.
In the past budget year the company has supplied bitumen for the Ethiopian Road Construction Corporation (ERCC), Addis Ababa City Roads Authority (AACRA) and Tidhar Group, an Israeli company that constructs roads in Addis Ababa and some other parts of the country.
The product of coal and pet coke is an alternative energy source for the manufacturing sector, like cement factories, which require a significant amount of energy for their production.
The annual report that the oil company released at the general assembly indicated that Dalol supplied 7,500 barrels (1,463 metric tons) of bitumen for its clients.
In the past budget year the company distributed 37.4 million liters of petroleum, which is an increase of 210 percent growth compared with the 2012/13 budget year.
The company that imports the lubricant from Saudi Arabia’s Petromin, a sister company of Saudi Aramco, a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia, has also shown significant growth in terms of the supply compared with the preceding year.
The total volume of lubricant that the company supplied in the past budget year was 206.7 metric tons, which is 750 percent higher than the 2012/13 achievement.
As of the end of the past fiscal year the non-current assets of the company reached 22.1 million birr and the current assets are set at 198.2 million birr.
According to the annual report, the oil company has undertaken 700 million birr in sales. Despite financial constraints the company has been very successful.
The external audit report stated that the company has registered about 10.5 million birr in profits before tax. The net profit after tax for the year was 8.5 million birr, which accounted for a loss during its first year of operation.
The CEO told Capital that even though the company registered good performance for the stated year, financial constraint has been a challenge for the company’s growth. He said that the company should expand its capital to go through on big capacity projects. To accomplish this, the company has decided to expand its capital.
The annual report indicated that the company has plans to put 22.5 million birr worth of subscribed but unpaid shares for interested buyers.
It stated that it has begun negotiations with interested companies and individuals to sell the stated amount of shares.
The total paid up capital reached 41.7 million birr, while the subscribed shares are 64.1 million birr.
At the general assembly held at Global Hotel, the board of directors chaired by Dereje Walelegn proposed that the expansion of the company’s capital to 400 million birr aiming to boost the company’s operation, which is highly capital inducement.
Currently, ten oil station are operating under Dalol, and out of this two are company owned dealer operated (CODO), which are owned by Dalol and operated by investors, while the other eight stations are controlled under a dealer owned dealer (DODO) arrangement or fully owned by investors.
Serkalem expects this will expand to 15 stations and four CODO stations this year including one in Addis Ababa.
Serkalem was the general manager of Continental Petroleum and the Managing Partner of Habitable Business Solutions which works on the environment. He was also commercial manager of NOC. His contribution in introducing alternative sources of energy like Petroleum Coke in Ethiopia, for the first time when he was at NOC, is considered to be a huge success. He is the second CEO of Dalol since it began operating.
[Capital]