Deojay Petroleum: Meeting changing demand in challenging times

The depreciating value of the rand is having an important effect on so many South African businesses. Within the petroleum market, the impact, when combined with supply chain costs, makes this a challenging market.

Deojay (1)

For Jackie Le Roux, Managing Director at Deojay Petroleum, the present climate is far from easy:

The depreciating rand and the impact on the price of raw materials where it is difficult to continually increase prices are constant pressures at present.

We have to continually access operating costs and make adjustments to our method of operations as well as reviewing input costs and taking more control of these by either changing suppliers or becoming more self-sufficient.  Where possible we use technology to access customers face to face rather than via the old cold calling methods,” he states.

Deojay Petroleum (KZN) (Pty) Ltd was founded in July 1994 and is an independent privately owned oil company based in Durban specializing in the marketing and distribution of internationally branded lubricants including its own Deojay Brand range of Automotive and Industrial Lubricants.

As the company prepares to celebrate its 20th anniversary, Le Roux reflects on how the business has evolved:

We became the first BP Distributor back in 1995, then in 2002 we started our own brand. During 2006 we signed a new agreement with BP/Castrol and became Castrol Brand Distributor. The Castrol contract was sold in November 2009 and we became a totally independent lubricants company.

Today we are a medium sized company and very much a niche market. We have 14 employees and we provide value over price rather than price over price for our customers,” he continues.

Those customers include heavy and light transporters, civil contractors and plant hirers, agriculture, heavy and light manufacturers, chemical companies, heavy and light engineering businesses and mining companies.

The company markets and sells a range of automotive and industrial lubricants and whilst Deojay does not currently manufacture, Le Roux suggests readers should “watch this space”.

Our range (of products) is extensive embracing a full range of engine, gearbox, rear axle oils and fluids. Industrial oils cover the full range of industrial applications from hydraulic oils to metal treatment oils,” he describes.

We supply to order and to stock and the products are blended by an ISO 9001/2008 quality managed privately owned blend plant. Products are labelled in-house. Our labels are unique in that not only do they reflect the company name, but also the product and a product data sheet,” he adds.

Le Roux says that the company relies heavily on IT systems to maintain sufficient stock levels and that this is one of the main drivers for operations: “It is criticalto ensure that the right product, at the right time, in the right pack meets customers’ expectations,” he affirms.

Increasingly, the industry is turning its thoughts to greener products and whilst Le Roux says that Deojay’s products are mainly traditional petroleum base stocks, a range of greener products are under development.

He says that there are plans for major investment over the coming months but maintains that this is a difficult time within the industry:

We operate in an over traded market sector with competitors vying for sales at the expense of bottom line and healthy margins. There are also new international entrants who enter the market believing that they have hit the pot of gold at the end of the rainbow. Also competitors who are independent operators claiming all sorts of specifications but who really supply according to the correct quality standards.

Right now there is also a lack of skilled and knowledgeable people. This is most difficult to overcome as we operate in an industry where very little training is taking place and the knowledgeable people left the industry many years ago as the major oil companies shed staff due to cost containment. We are looking at introducing a cadet programme of bringing in young people and training them,” he says.

Of course one of the ways to combat these challenges is through better sales channels and in 2009 the company, having identified a gap in the online sales market in South Africa, launched Oil-On-Line, the first virtual lubricants based company in Africa to provide customer with an online range of high quality automotive and industrial lubricants, metal cutting fluids and specialities.

At the time, Le Roux commented:

We aim to bring the consumer, quality based lubricants according to internationally accepted quality standards and Original Engine Manufacturers (OEM) specifications. All our clients have to do is go online, and follow a few easy steps. Within a specified number of days their order will be delivered to their premises, and they didn’t even have to get in their car, or pick up a phone.

Looking to the future, Le Roux remains confident that the same innovative approach to business will stand Deojay Petroleum in good stead:

Deojay Petroleum has been in the market place for 20 years and its technical expertise collectively spreads over 86 years. Its products meet the stringent standards and specifications as required.

We have a customer base which in the main has been loyal for as long as we have been around. We are a passionate company and very proud of our track record.

Our future will continue to be to provide lubrication solution not just as a supplier of lubricants. We will continue to bring to the market new products as performance demands and specifications change. We are also considering joint ventures which will allow us access to cross border opportunities,” he concludes.