Namcor – Namibia’s Own Oil
Namcor is the oil company of the Republic of Namibia, 100% owned by the state and with a mandate to operate in both the advancing and extracting sectors of the oil industry. We learn how Namibia’s state-owned oil company is remaining competitive against international players.
Namcor is the oil company of the Republic of Namibia, 100% owned by the state and with a mandate to operate in both the advancing and extracting sectors of the oil industry. From the very beginning, their mission has been to enter into and maintain successful and mutually beneficial partnerships, to offer convenience, quality products and services to its customers, and to offer a motivating, engaging, high-performing, safe and rewarding work environment to its staff. Namcor is a company that aims to meet shareholder’s expectations by running profitable and successful operations while acting as a responsible corporate citizen which is mindful of the community and the environment in which it operates.
“We’re uniquely positioned to participate in all the exploration licenses of the country and we also do business in the commercial sales sector and retail sector,” says Immanuel Mulunga, CEO of Namcor. “We are obviously competing with international oil marketing companies who are present in Namibia.”
While Namcor is operating in a highly competitive market space, the company is forging ahead thanks to their strong sense of Namibian identity.
“Our selling point is that we are a Namibian entity for Namibians, and we want to create value for all of our stakeholders. We want to sell to our customers while keeping the profits inside the country,” Mulunga says. “Obviously, the biggest challenge is gaining a bigger market share. We are a small company compared to our competitors, and because we are a state-owned entity, we have to work under rules that make us a little bit less competitive in the market. So we have to overcome those challenges as we do business.”
Achieving a competitive position in the oil market as a relatively small, state-owned player is no small challenge, but it’s one that Namcor is more than ready to take on.
“We have less experience than our competitors when it comes to retail, storage, and we are still relying on help from the government,” Mulunga says. “We overcome these challenges by taking them head-on. We leverage our position as a national company, and we are making inroads. We have started importing our products and we are able to offer competitive prices.”
The company is also working to expand into new market sectors, creating new business and a new brand for itself.
“We have recently entered the retail space. We started constructing service stations and retail sites that are superior in look and feel,” Mulunga points out. “We are also endeavouring to provide a superior service to our customers.”
Of course, the provision of that superior service is built on a foundation of great people, and this is one area where Namcor has a wealth of resources at its disposal.
“Fortunately, we have the skills in Namibia for the positions we need to fill in Namcor. It has been very successful. The reason for that is because of the leadership Namcor has provided through the quality and character of our managing director,” Mulunga says. “We believe a lot of people are willing to come on board and join the project that we are embarking on to create a large enough competitive national oil company. It excites everybody and people want to participate in that kind of project.”
The staff undergoes extensive training, although thanks to Namcor’s ability to draw in talent they rarely have to worry about teaching the fundamentals.
“In terms of training, it’s something we continue you do to fill the gaps in employees’ knowledge. We tend to hire people who already have the experience, so we miss out on a lot of the elementary training,” Mulunga tells us.
A Namibian Future
One challenge that has hit oil companies from giant multinationals to smaller state-owned businesses has been the COVID-19 pandemic, and Mulunga is blunt about the effect of the crisis.
“It’s obviously affected our business negatively. We believe we will not meet the budgeted sales targets and profit margins,” he says. “I think that goes without saying. What we’ve done is we’ve gone back and revisited our budget figures. We have also gone on a serious cost-cutting exercise, to make sure that we cut our expenditures proportionally so we can still make a profit but it will be difficult. A lot of programmes and budget items have been put on ice. We are travelling less, naturally, those costs have been cut.”
While some cost-cutting has been necessary, however, Namcor’s priorities remain the same.
“We are continuing to look for customers and even during this COVID-19 time we’ve increased our market share,” Mulunga states. “We have some landlocked companies that we were able to help through the export market.”
Indeed, looking beyond the COVID-19 pandemic Mulunga is extremely optimistic about what the future of Namcor holds, for the company, and the country.
“We have an exciting future here with us. Namcor is always improving. We are like a big jumbo jet sitting on the tarmac, waiting to take off,” Mulunga says enthusiastically. “We’ve done a lot of groundwork to get us to this stage. We’ve just rolled out retail service stations and want to continue to build them. We’ve got a storage facility that’s being completed by the end of this year, and in order to secure financial sustainability in the future, we have decided to go after some production internationally so we don’t have to rely on levies from the government in the foreseeable future. I’m excited to be leading Namcor to become not only a fully integrated oil company but one that can stand on its own feet in the next couple of years.”