Red Star's 24-year Odyssey

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Crusoe Osagie reviews the achievements and challenges that have shaped Red Star’s operations in Nigeria

The Logistics Industry in any economy lubricates the dynamics of distribution from the point of production to the point of consumption. It is the intermediary from the time the raw materials are sourced to the end production. The firms that make up this industry provide services such as ocean freight, air freight, inland transportation, warehousing, material handling, packaging and removal, inventory, security, courier services and cargo tracking.

The logistics and transportation industry can be quite challenging. By investing in this sector, multinational firms position themselves to better facilitate the flow of goods throughout the world’s largest consumer markets.
In Nigeria, operators in this industry benefit from a highly skilled workforce and relatively low costs and regulatory burdens.

After decades of this industry being dominated by foreign companies and government, Red Star Express Plc was given birth to 24 years ago, by Mazi Sonny Allison, Mr. Patrick Nwosu, Olorogun Eddy Olafeso and with the support of a few other investors, including the long-standing Chairman, Dr. Mohammed Koruna.
They set out with a mission to provide value added logistics solutions that will be secure, prompt and effective.

The Group Managing Director of Red Star Express Plc, Sola Obabori, praised the foresight of those who built the Red Star brand from the scratch confessing that their tenacity brought the company to its present state of growth. “It has been a long journey. As you know, 24 years is also a length of time in the history of the company, we have seen it together. I have been here for seventeen (17) years, which means out of the twenty-four (24) years I have seen ups and downs. It is such a journey that has been rewarding to a very large extent, considering the amount of issues Nigeria has dealt with over the same period. I think the founders of this great company have done a great job, because, naturally, the mortality rate for companies is typically five years. I can mention many companies that came up during the same time Red Star Express was established but struggled to stay alive for only five years before fizzling away.”

Over the years, Red Star Express has provided services that are evolving and marketing a range of technology-driven services designed to meet the diverse needs of customers. They have ensured that their operations reflect a commitment to quality and are profitable at all times through prudent management. Little wonder, the company was awarded as one of the company quoted in the Nigerian Stock Exchange and yet doing well enough to contribute to the success story of Nigeria, during the Top CEOyear by the BusinessDay Newspapers.

Amazingly Red Star Express, like some other Nigerian Companies, has stayed strong in spite of the various economic melt downs in the country. Speaking at the 2016 AGM of the company, the Chairman, Dr. Mohammed Koguna noted that in spite of the challenges of decline in oil prices, immense pressure on the Naira, volatility and uncertainty in the foreign exchange market, regular flight cancellations, upsurge in the price of food commodities, transportation and general cost of living, the staff and management worked assiduously to ensure that the company posted a satisfactory result with a turnover of N6.6billion in this year, and has maintained its commitment in the creation of wealth for shareholders in appreciation of their support at all times.

The Group CEO, Mr. Sola Obabori, explained that focus is the company’s major driver. “Looking at the present economic challenge, this is not what happened when the company was established. At that time, it was very turbulent. Therefore, permanent rejuvenation and focus should be core areas that companies must emphasise. If you dabble into various businesses to stay alive, even diversification can kill your business. For us at Red Star, one of the keys that have taken us thus far is focus. Red Star is a much-focused company I met and I have inherited as the CEO to run the affairs. Our focus at this time, despite the challenging business environment, is to build Red Star Express from a Good to Great Company, positively impacting lives and businesses, within and outside the shores of Nigeria.”

With a view to optimising emerging opportunities in the domestic and international business environment, the company changed its management structure. Since 2008, Red Star Express has had a bit of compartmentalisation of the business such that the Red Star Group now has four companies within. This took effect from April 1, 2016, and four (4) Divisional Managing Directors emerged. Obabori assumed the position of the Group Managing Director, while Mr. Charles Ejekam assumed the Divisional Managing Director of Red Star Express, Mr. Ocholi Etu assumed the Divisional Managing Director of Red Star Logistics, Mr. Enoma Ojo assumed the Divisional Managing Director Red Star Support Services, and Mr. Tonye Preghafi assumed the position of the Divisional Managing Director of Red Star Freight. Two Executive Directors, namely Mr. Victor Ukwat, (Sales & Marketing) and Mr. Auwalu Babura (Finance & Admin) were also appointed for the group.

Obabori explained: “The company deliberately unbundled itself in order to ensure entities focus on the area of growth that is considered a core for the business. We created these divisions in our business to address the needs in our current economy, and we are responding well to the challenges”.

Just as every other company embarks on Corporate Social Responsibilities (CSR), Red Star Express has also been at the forefront. It embarks on series of activities such as Customer Week, ‘I care’ projects, Scholarships for Secondary Schools, amongst others.

The company organises the annual scholarship programme for secondary schools in collaboration with its host community, Oshodi Local Government. From inception in 2004 to date, there has been about 97 beneficiaries of the Red Star Foundation across Nigeria. Nine students from four senior secondary schools in Oshodi-Isolo Local Government are currently benefitting from the annual scholarship to the tune of N50, 000 each per annum for their school uniforms, books and other physical needs till they graduate from senior secondary school. And in order to spice up this year’s scholarship, the company embarked on mentorship programme for students under its scholarship.

According to the Executive Director Sales, Mr. Victor Ukwat, some of its top management staff members were selected as mentors to nine scholars from public schools in the area under the Red StarFoundation Scholarship scheme to provide guidance and counsellorship for the young scholars.