Even though their parent company has been acquired, Extra Fleet Management have pledged to continue to offer their clients, partners and suppliers the same high standard of professionalism that has set them apart in their industry since 1984. Foylan Rhodes investigates.

Parent company, Eqstra Investment was acquired earlier this year by Nedbank after lengthy negotiations. The recent acquisition, which was valued at almost R1 billion (approximately $55 million), has put the business in an excellent position to expand further into the various elements of South Africa’s fleet management sector, however EFM’s reputation has already been established. So, for them, it’s business as usual.
Over the past four decades the South African fleet management company has set their own standards, which has heavily influenced their industry. The company is an industry powerhouse, purchasing over three hundred vehicles a month, managing over a thousand accident claims, negotiating over six thousand maintenance events and providing roadside assistance to twenty-four thousand monthly drivers, while actively live tracing over thirty thousand vehicles.

As managing director Murray Price said once, “Our job is to run a client’s fleet effectively so they can focus on their business, whether a fleet is large or small it is individual and the solutions we offer have all been customised to suit each customers’ unique needs.”
Dedicated to technology, Eqstra Fleet Management were one of the first businesses in South Africa to make use of comprehensive telematic solutions. This enabled them to track vehicles and provide all the functionality a client would expect from a tracking system, while the data collected could be conveniently included with all the other elements of fleet data.

This enabled them to provide customers’ fleet operations with top-tier technical expertise while also leveraging access to accredited commercial workshops and panel shops—a valuable advantage that keeps their fleet vehicles safely operational. Additionally, they oversee every aspect of tyre management, from monitoring driver behaviour and scheduling tyre rotations to ensuring each vehicle is equipped with the correct tyres.
Protection is crucial, especially in South Africa, and the company provides extensive vehicle fleet short-term insurance, backed by leading short-term insurers in the country. This service blends industry expertise with cutting-edge technology solutions, catering to policyholders seeking to reduce fleet costs.

The Acquisition
The deal, which was announced in July this year, was valued at nearly a billion rand, was not without its hurdles, and has been in discussion for several years. Nedbank Group’s acquisition of Eqstra Investment from enX had to be given the go-ahead by the Competition Tribunal, who are an organisation set up in South Africa as an independent body tasked with enforcing the Competition Act, 1998. This involves reviewing mergers and acquisitions to ensure they don’t harm competition or lead to monopolistic practices. This includes the adjudication of cases of anti-competitive conduct such as cartels and the abuse of dominance referred by the Competition Commission. They also impose penalties or remedies where violations are found. Although they operate as a quasi-judicial entity, their decisions carry legal weight and aim to promote economic efficiency, consumer welfare, and fair participation in the economy. They have become an industry compass in the country’s growing business sector. When it came to Eqstra Investment and Nedbank, the tribunal unconditionally approved the proposed merger.

The deal, first considered by Nedbank’s board in May 2023, has bolstered the financial services provider’s fleet management capabilities three years after Bidvest failed to buy Eqstra. This is as a combined Eqstra and NedFleet operation is set to provide an integrated approach to fleet management, which is aimed at providing better quality, cost and scale to their joint clients.

Simultaneously, the transaction will expand Nedbank’s product and services offering in Namibia and Eswatini, while expanding Nedbank Group’s footprint into a new jurisdiction, Botswana. Petrochemicals, equipment and logistics group enX said the deal came about because it believed keeping Eqstra under its wing might restrict the logistics company’s “growth prospects and restrict the returns able to be delivered to enX shareholders. Other factors cited for the sale were that the group might struggle to secure the capital for Eqstra to grow aggressively in the market, diversify its asset base and increase its credit risk appetite.

In July, enX confirmed to its shareholders that all suspensive conditions to the transaction had been fulfilled and the transaction was unconditional with the Takeover Regulation Panel issuing a compliance certificate.

The deal involved Nedbank buying a 50.2% stake in Eqstra at a minimum of R379m and Eqstra repurchasing all their shares held by enX also for a minimum of R379m, resulting in Nedbank and Eqstra becoming the sole shareholders.

If the subscription price stays at the minimum of R379m, then the gross proceeds of the deal, along with other costs, will be at least R890m. According to the latest audited figures for the year to end-August, the value of Eqstra’s net assets amounted to R529m, leasing assets including 11,300 vehicles amounted to R2.6bn, its loans R511m and profit R109m.

Other Deals
EnX has been trying to sell Eqstra since October 2018, after its board decided it could do no more to enhance the operations of the company it bought in 2016. Bidvest, the top 40 services and distribution group tried unsuccessfully three years ago to buy Eqstra, after initially agreeing to pay R3.1bn for the business in 2019.

It’s a happy outcome as the deal initially fell through in May 2020 after approval from the Prudential Authority failed to materialise before the deadline for the transaction.

The integration of Eqstra’s comprehensive fleet management offerings with Nedbank’s current services is expected to deliver improved quality, cost efficiency, and scalability for clients. Additionally, this move expands Nedbank’s presence into new markets, including Botswana, Namibia, and Eswatini.

This acquisition underscores Nedbank’s commitment to providing integrated and innovative fleet management solutions across the Southern African region, and Eqstra Fleet Management’s dedication to continue doing what they do best. Manage fleets.

The Natref refinery at Sasolburg was commissioned in 1971 and has been at the cutting edge of refining technology since its inception. As it is situated inland, the refinery’s market for heavy fuel oil was quite limited and as a result, it was designed to get the most out of crude oil and equipped with state-of-the-art technology to achieve this. The refinery makes use of the bottoms up grading refining process, this uses medium gravity crude oil which gives NATREF the capability of producing 70 percent whiter product.

Production
At the refinery, the main products produced are petrol, diesel, jet fuel, bitumen, and fuel oil with a capacity of 108,500 barrels of oil per day. Located in Sasolburg, the Free State, Natref supplies the main South African inland market of Johannesburg and the surrounding areas, however it starts its inland journey 600km (355miles) away at the coast. The crude oil destined for Natref is offloaded in Durban via floating Single Buoy Moor (SBM), which is co-shared with other oil companies and managed independently. In Durban, the crude is stored in 15 crude storage tanks before beginning the long uphill journey to the refinery. 

Due to its inland location, near the industrial heartland of South Africa, the refinery is sited in a place where the market for heavy fuel oil is quite limited. Therefore, since it was founded, Natref has needed to squeeze all the value out of their crude, which requires state-of-the-art equipment. By utilising the bottoms upgrading refining process using medium gravity crude oil, the refinery has the capability of producing 70 per cent whiter product than coastal refineries, which must rely on heavy fuel oil. 

Having commenced operations over half a century ago, it is no surprise that in that time the refinery has undergone several expansions and upgrades. Mr Dayanand Rajaram, Senior Vice President at Natref, shared some of the more technical details about the refinery’s evolution and current capabilities. 

“The refinery was originally designed as a 55,000 bbl/d refinery,” he says, “In 1976, it was expanded to 75,000 bb/d, and then to 86,000 bb/d in 1993 and to 108,000 bb/d in 2002. In 2005, the refinery was upgraded to clean fuels 1 specification. In 2016, the refinery started producing 50ppm diesel.” 

He goes on to explain that the refinery configuration has a Solomon complexity factor of 10.9. As mentioned earlier, it has a significant bottom upgrading unit (residual crude desulphurization – RCD), as well as the capability for processing vacuum residue and atmospheric residue from the crude columns into FCC feed. In addition, the refinery also has several specialised units including a hydrogen reformer unit, a hydrofluoric acid (HF) unit, and a bitumen unit.

There are a number of other recent key developments including several upgrades to infrastructure that have been completed. Such as the human machine interface (HMI), and distributed control system (DCS) upgrades. Health monitoring on key rotating equipment was implemented by upgrading the Bentley system and the company has installed state-of-the-art training simulators on two production units, with a further view to link this with virtual reality to further improve operator training and engagement. Further to these items, solutions that provide online monitoring of critical operating parameters to prevent process safety incidents have also been installed. 

“At the moment, the refinery is piloting and rolling out a wireless plant inspection tool that will assist operators and maintenance staff in improving their effectiveness,” Mr Rajaram says, “These are among some of the more recent changes to improve the data gathering, decision-making and the training of employees.”

New Developments
One company leaves another takes its place.
For decades Natref was owned by TotalEnergies and Sasol, but this changed earlier this year, when British company Prax Group struck a deal with TotalEnergies to buy their stake in the refinery. Although the companies did not reveal the agreed price for the 36.36% stake in the facility it is known that Sasol will retain control of the remaining 63.64 percent.
Prax said this purchase would see it enter the South African market where they envisage Natref serving as a focal point for its expansion into Africa. It also represents the beginning of their move into the continent as they plan to make further investments in the asset to establish it as a regional hub. 

“The signing of this agreement is the first step towards our entry into Africa which will provide us a solid platform from which to execute our future growth strategy,” said Prax CEO and chairman Sanjeev Kumar Soosaipillai.
“The acquisition marks another significant milestone for the Prax Group and will create unique opportunities across the South African supply chain, meeting the needs of customers and communities for years to come.”

Focus
“The transaction is in line with the Company strategy to focus on its large integrated fuels and petrochemicals platforms and to divest its non-core assets,” said Jean-Pierre Sbraire, CFO of Total.

TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables, and electricity. Employing over 100,000 people they are committed to energy that is ever more affordable, more sustainable, more reliable, and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people. They own a 50.1% stake in TotalEnergies Marketing South Africa. The other 49.9% is owned by South African shareholders.

Interesting Future
Natref represents not only a long-term asset that has continued to produce for over fifty years, but is still South Africa’s only inland refinery and processes heavy crude. This provides a number of opportunities for the UK company to take advantage of established infrastructure and employee-skills. Particularly as Prax has interests in the upstream but also in the downstream, which means the future for Natref is going to be an interesting one. Not to be crude, but black gold has never seemed so refined.