One oil company has moved out of its own backyard to take on the whole region. tanzania has sizeable natural gas reserves off its coast but, as yet, no crude oil has been discovered. This means that the country's requirements for petroleum products must be imported. Over the last decade the relative size of the market has encouraged the world's biggest oil companies to pull out, causing a fragmentation of the market.

But out of the scramble for assets has come one clear contender, Gapco, which through its acquisitions has begun to re-consolidate the sector in a regional context. Now, from Mauritius to Tanzania, Rwanda to Sudan, motorists are able to see one recognizable sign as they pull in to fill up the tank, the distinctive red of Gapco's gas stations.

Founded in 1980, Gapco or the Gulf Africa Petroleum Company, was incorporated in Mauritius to purchase the assets of oil majors exiting the region. In the mid-90s it bought the shares of Esso Standard in Tanzania and Uganda, as the parent Exxon Corporation pulled back from East Africa. Now it works throughout the land-locked Great Lakes region, serving Rwanda and Burundi, the Congo, Zambia and Malawi.

In 1998, the company also took the significant step of purchasing the assets of Italy's Agip in Sudan, and is on the lookout for more opportunities throughout the continent.

"I am still very confident that the group is going to be even bigger," says Dhiran Kotak, chairman of Gapco Kenya and one of two brothers running the company. Over the past decade, the company has clocked up a remarkable increase in revenues and now forecasts sales of $400 million for the overall group. Clearly, the company has come a long way from the single gas station opened by the brothers' grandfather in 1931.

Kotak puts this success down to strong management, tight control and a thorough understanding of the market. In Sudan, the company was able to increase sales more than ninefold, from 3,000 tons to 29,000 tons, in two years. "We focus on implementation of the ground and are aggressive in our marketing," he says. Another key advantage is the fact that Gapco is vertically integrated and owns its own trucks and oil tankers as well as storage and retail outlets. This extensive and complete downstream infrastructure is the real strength of the company, giving it a competitive edge in all its markets.

In Tanzania, the gas market is intensely competitive and any price advantage is critical. Gapco is the leader, with a 42 percent share of a market estimated at $150 million. Its facilities are a real strength: a 5-million-gallon gasoil tank in Dar es Salaam is the largest in East Africa.

The company is expanding in the south of the country in Mtwara and in the north in Tanga and is poised to push out further to meet greater demand for petroleum products as the economy's growth increases. As the road network improves and is extended, traffic will pick up with a resulting increased demand for gas.

Such factors make Tanzania the centerpiece of the company's regional strategy and it is here that the lion's share of Gapco's revenues comes from. But it is also strong in Kenya, Uganda and Sudan and is aggressively pursuing market share in these countries.

Fierce competition comes from BP and Oryx and could soon resume from Caltex, which is interested in coming back to the region. An oversupply of stations is one major issue facing operators in Tanzania, as is smuggling, with many smaller operators avoiding tax and undercutting the market. Despite firm moves by tax authorities to tighten regulations and observance, through such measures as color-marking gas, smuggling remains a serious problem.

Still, the advantages of a strong infrastructure will be integral to Gapco's ongoing success as it adapts to offer new services, such as the clean fuel LPG, which is widely anticipated to become increasingly important in the market.

Taken as a whole, from a regional rather than a country basis, the market is large, there are 130 million people in the East Africa region. But a company needs to have that regional, if not a continental, vision to really grow, and for Gapco, eyeing new opportunities throughout Africa, the market is looking ever more promising.