The process to convert its Durban refinery into a terminal is on track, Engen says.
In April 2021, Engen announced that it would proceed with its refinery-to-terminal conversion initiative as part of a long-term business sustainability strategy.
At that time, it said the refinery, located in the south of Durban and commissioned in 1954, was the oldest refinery in the country and was responsible for about 17% of the country’s fuel production.
It also said at the time that the conversion plan had come after extensive strategic evaluation of its refining business, including a refinery viability study that found that the refinery was not financially viable.
In an update provided to “The Mercury” recently, Engen said it had been operating in importation mode since the first quarter of 2021, with the full integration of the terminal into the supply and distribution network effective as of July 1 last year.
“The progression of the full refinery to terminal capacity and standalone terminal operations are on track for 4Q (fourth quarter) of 2023,” it said.
Regarding staffing due to the conversion plan, Engen said its employees had been openly engaged and consulted.
“Concerted effort has been made to retool, reskill and redeploy as many employees as possible in alternative positions within the Engen business.”
Last week, a youth formation from the south Durban area, said the youth wanted to be involved in the operations of the business.
Ubumbano Youth Unity activist Mfanafuthi Shinga said they wanted to be “part and parcel of any economic activity that takes place within our locality”.
“With the youth unemployment rate sitting on more than 60%, we can’t sit back and not seek solutions for a plight that affects us directly.
“We want to see the companies availing learnership opportunities to the youth, bursaries, jobs and some form of ownership opportunities in the form of shareholding,” Shinga said.
In response to the call for involvement, Engen said it was committed to working with the south Durban community.
“Engen continuously engages openly with the south Durban community to address all matters of concern and to explore the co-creation of future opportunities through the Community-Engen Joint Committee. Engen takes all stakeholder concerns seriously and welcomes good-faith collaboration in partnering with the community that is in the best interests of all parties.”
It added that it had been a long-standing member of the south Durban community and continued to spearhead many targeted community outreach initiatives aimed at uplifting and empowering the local community.
Engen also dismissed suggestions that the company flouted safety regulations and placed the lives of community members at risk.
“Engen complies with all regulations and laws as provided for within its operating licence.
“Our operations are carried out in compliance with strict health, safety, environment and quality standards, and we are firmly committed to the safety of our employees, as well as neighbouring communities.”
Approached for comment yesterday, Congress of South African Trade Unions (Cosatu) KZN Secretary Edwin Mkhize said the discussions about the refinery conversion had been elevated to the federation’s national office and the Department of Mineral Resources.
The trade union federation had raised its concern over the conversion plan when it was announced in 2021.
Regarding the re-skilling of employees for possible deployment to other divisions within the company, he said Cosatu was “always sceptical when such proposals are made because in most cases they are just done to favour the employer”.
He added that they would continue observing developments on the matter, especially the plight of the workers.
Earlier this month, Engen and Vivo Energy announced the combining of their respective African businesses to create one of the largest energy distribution companies on the continent.
According to the statement, Petronas will sell its 74% shareholding in Engen to Vivo Energy at completion and Phembani Group, which is Petronas’s long-standing partner in Africa and Engen’s B-BBEE shareholder, will retain a 21% share in the South African business.
The statement indicated that the transaction would benefit employees of Engen through a newly implemented 5% employee share-ownership programme, resulting in Engen South Africa being 26% owned by previously disadvantaged parties.
At the time, the statement said the transaction was pending regulatory approvals and a fulfilment of conditions precedent.