The Opportunities for Menj Oil Limited
OPPORTUNITIES
* Impending deregulation of the downstream Petroleum sector should result in improved margins
* Menj Oil has a Market leading infrastructure (in terms of Jetty size and storage capacity)
* Highly nimble organizational structure
* Menj Oil has Alliances with leading international Petroleum Products suppliers
THREATS
*Competition from established players (i.e. the Major Oil Marketers) is formidable
* The petroleum sector is exposed to significant political/ regulatory risks (given the recent wave of policy changes)
* Potential difficulty in accessing new loans or refinancing existing ones
Business Model
Focus on 3 key drivers of shareholder value:

• Maximize gross profit margin
– Order in large quantities to obtain bulk order discounts and amortize delivery charges over more
units
– Skew product mix, where possible, toward higher margin products & services
– Exploit reference pricing potential.
• Minimize working capital requirements (ideally negative
w.c.)
– Minimize days' inventory held
– Maximize trade credit from suppliers
– Obtain overdraft facility to fund 50% of inventory
• Maximize revenue per location
– Maximize number of builder/trade accounts per location
– Maximize wallet-share of each buyers' spending