Kenol Kobil shuts down Tanzania, DRC subsidiaries

In an effort to streamline operations, Kenol Kobil has sold two of its subsidiaries in Tanzania and the Democratic Republic of Congo.

Before the exit, the oil marketer had operations in nine countries but operational challenges and the need to manage debt forced the sale of the two subsidiaries.

“Owing to the above, the said two companies namely Kobil Tanzania Limited and Kenol Kobil Congo SPRL shall no longer be subsidiaries of Kenol Kobil Limited,” Group CEO David Ohana said.

In the DRC, Kenol Kobil operated a fuel depot Lubumbashi as it sought to meet the regions oil supply. However, political instability in the country is seen as a major reason for the company’s exit.

In Tanzania, the oil marketer operated 17 fuel stations.

Kenol Kobil has been consolidating its operations since posting a massive loss in 2013, largely linked to aggressive expansion and foreign exchange losses.

With the sale, Kenol Kobil now has operations in Kenya, Uganda, Rwanda, Mozambique, Ethiopia, Zambia and Burundi.

The oil marketer announced a half-year net profit of Ksh 918 million as it tightened the lid on spending and cut back on borrowing. Kenol Kobil is also selling part of its assets as part of the turnaround strategy.

The shift in strategy is expected to make the company more profitable going forward.