Analysis: BENEDICT TEMBO
INDENI Petroleum Limited board chairperson Yamfwa Mukanga has handed the company’s new managing director, David Lungu, the challenge to increase the production of bitumen, especially now that road construction in the country is in full gear.
Mr Mukanga’s expectation from Indeni to increase the production capacity of bitumen is timely.
The increased production by Indeni will definitely be a plus to the road sector in many ways given that bitumen is one of the major components of asphalt roads that are normally constructed in Zambia.
The local manufacture of bitumen will reduce outflow of foreign exchange as, at the moment, the country is importing the product from South Africa and Saudi Arabia.
Kumbukilani Phiri, an engineer, says local manufacturing of bitumen will also reduce the lead time from procurement to delivery on site.
“It will also lessen procurement costs related to import taxes, agent fees and other logistical costs,” Mr Phiri says.
He is hopeful that if Indeni properly manages its cost of production, there is a good chance that it may lower the cost of bitumen which will then also lower the cost of road construction.
“I think mass production of bitumen may not necessarily cheapen the cost of bitumen. The cost of bitumen will depend on the cost of production by Indeni, vis-a-vis their selling price in order for them to make a profit. However, the country will save a great deal in terms of forex outflows,” Mr Phiri says.
South Africa produces bitumen and indeed their construction cost per unit road is slightly lower than in Zambia.
Thomas Nkaka, Quickfix Zambia Limited chief executive officer, is also confident that the mass production of bitumen by Indeni will come in handy.
“I am sure this will come in handy especially that we use asphalt for road constructions,” Mr Nkaka said.
However, Quickfix technology for road construction is far different.
“We don’t use bitumen for stabilisation. Instead, we use enzyme which treats the soil making it stronger than asphalt. We are currently importing from UK, but we will soon be setting up a plant here in Zambia,” Mr Nkaka said.
Indeni was established in 1972 but started production in 1973.
The refinery capacity is 25,000 barrels per day; equivalent to 1.1 million metric tonnes per year
Mr Lungu says the design capacity for a bitumen plant is close to 200 metric tonnes of production per day, which gives a potential annual production of about 70,000 metric tonnes.
“Current production is only at 50 percent capacity (100 tonnes per day). In the Indeni strategic plan, there will be revamping of another unit called Asphalt Blowing Unit, which will make Indeni produce bitumen from crudes with lower bitumen component,” Mr Lungu said.
These major programmes being implemented by the Road Development Agency (RDA) include the Link Zambia 8000, the Lusaka 400, the Pave Zambia 2000 and the National Road Tolling.
The author is editorials editor at the Zambia Daily Mail.