Mr. Adewale Adetayo is General Manager and Head of Sifax Haulage & Logistics Company Ltd, an arm of the Sifax Group. He tells Kunle Aderinokun and Bamidele Famoofo that solving Nigeria’s transportation problems is the surest way to create jobs and grow the economy. Excerpts:
How has the experience been since your appointment in the last three months to direct the affairs of this subsidiary of the Sifax Group?
It’s been a familiar terrain because l didn’t just start the logistics business at Sifax. I think my reputation and past achievements in the industry was part of the things that got me this job. So, the challenges and the potential are there, but we are more encouraged by the potential than focusing on the challenges. And of course, as l use to say, challenges are the opportunities we have to make money. Because l have discovered that money hides inside problems. Therefore, we have to go through the challenges to make money. For me, it’s been good because the environment is good. I have a fantastic workforce to work with.
Sifax, from what l have seen so far, has its reputation working for it. It is a company that does not compromise on quality and values. You can see that from the choice of equipment that we use. I can say Sifax is like home to me considering the enabling environment for performance that is in place. I resume here early and close late because of passion for the work. I have been in banking, insurance, and other places, but believe me, l only can’t say those period in my career life was wasted, considering the satisfaction l derive in the transport business, because we are solving problems. I have realised that mobility is the key to wealth creation as immobility propels poverty. We are therefore creating an enabling environment for people to move around to do business and to make money.
What are the challenges you encounter in delivering your services?
There are several challenges, some are internal while others are external. But the external factors pose more serious threats to the business. Those external factors are those that you only pray that God will use our government to fix. I will start by addressing the external factors that are challenges to our business. You can see that we have inadequate transport infrastructure in the country. In some cases, they are not even in existence at all. For instance, the roads that were built in the 50s are still in use today. We still expect those dilapidated infrastructure to still carry the growing human and vehicular movements today. That will not work. We are growing in number on a daily basis and government is not planning alongside the growth pattern in population. The challenges of infrastructure have been the most difficult one we face in this industry. You can see the gridlocks coming from the Ikorodu corridor inward Apapa. From Ojuelegba, you will see articulated trucks queuing for several days on the road before they can access the Apapa terminal, which is the gateway to the economy. Ironically, this Apapa feeds the nation besides oil. For government to have neglected this very important sector of the economy is what l have not been able to relate with. It’s is quite surprising to anybody. The challenge with this is the man-hour daily wasted on this route. If we must place value on the wasted man-hour, you would be shocked as to what we are losing in monetary term everyday as a nation. Talking about government, the ease of doing business programme of government can’t be achieved in isolation of many factors. For example, l want to buy trucks, the initial capital outlay of this business is high, l must go to the bank to borrow money. Banks lend to you at double- digit, and then you have the obligation to fulfill to the bank every month, but it’s based on your turnaround time that you can pay back what you borrowed from the bank. Now, you are to spend five days on the road just to access the port, you have not even carried the load, and your destination is Ibadan.
The estimated journey time for Ibadan is 24 hours to and fro. But already, you have wasted five days on the road to access the port, besides having to confront Customs for clearance of your goods. You know, l was in the port this morning and l began to wonder why the scanning machines were not working. But I was at the port inTogo recently, and l saw the way things are done. Again, for any vehicle to enter Ghana through the Aflao border, all trucks must be driven through the scanner. That saves time and man-hour for you in Ghana.
Meanwhile, the port in Lagos, which is the largest in sub-Saharan West Africa does not have a functional scanner. So what is the problem? Is it that we cannot afford it or we don’t want it to work because of some selfish interests. But we fail to consider the multiplier effect of selfish interests on the part of a few people on the lives of the majority ordinary Nigerians. So, when you consider all that, where is the ease of doing business that we are talking about in the country? And this scenario l have just painted is threatening the economy, because transport drives the entire economy.
But you have not talked about the internal factors?
Drivers contribute to 80 per cent of the challenges we face in this business internally. So, what’s their mentality like? What’s their level of education you want to find out? Do you train staff on the know-how of equipment handling? And the safety measure put in place by the company, among others are challenges that we battle with in the industry. Even sourcing of spare parts for your equipment is another major challenge in the country. But for spare parts, we have resolved in Sifax to buy them from overseas, because you hardly can find original spare parts anywhere in the country. You only get it if you are familiar with the market and you know exactly what you want to buy and insist on having it. Again, genuine spare parts are very expensive and it affects the price you charge your customers in transporting their goods. But because rate in the industry is generic, customers compare you to your competitors, not minding the cost you incur in maintaining your vehicles. For instance, we just bought trucks worth N50million per unit. These are not Chinese vehicles but European Standard trucks for us to play in this industry as a leading company. If you expect me to charge the same amount charged by someone with a truck of N15million, it won’t work. The cost model cannot be the same. The overhead cost of running the business is huge.
What is the solution to the current infrastructural deficit?
Nigeria should be a transport-driven economy as you have rightly observed. We have over-relied on road as means of transportation with about 90 per cent of goods being transported by road. They are complaining about the number of vehicles on our roads, but it is not even enough, considering the size of our economy. What we have on our roads now can even compete with Texas, a State in the United States has. All we need to do is to develop the other modes of transportation in the country.
For instance, we don’t have any business transporting oil products from either Port Harcourt or Kaduna by road to Lagos, before distributing the products to other parts of the country if government has developed the pipeline transportation Mode. Let’s look at import of petroleum products into the country too. . We import from outside the country through the Apapa port where the product is discharged into the various tank farms. Ideally, we don’t need any truck to come to Apapa to load this product from the tank farms; all we need is to establish the pipeline transport system to move the products to every part of the country. Agreed, the cost may be high at the initial stage, but on the long run, the multiplier effect on the economy is huge.
One of the advantages is safety of the product. I spent like seven days in Ghana recently, I noticed that l didn’t see trucks moving fuel to petrol stations, yet there was no scarcity. So, l became curious and tried to find out what was happening, and l was told the means of supplying the stations has been controlled such that you will never find trucks struggling the road with other vehicles in the day time. So, pipeline transportation, like l said earlier, guarantees quality of the product as human interference is reduced to the barest minimum while man-hour and cost of labour are reduced.
For instance, Nigeria recently signed a bilateral agreement with Morocco to supply it gas, which will be done through pipeline transportation. If that would be done, why can’t we do it for ourselves internally? I believe something is wrong with us as a people. And apart from that, we still run a mono-rail system from Lagos to Kano. One of the disadvantages of this system is that it gives priority to passenger train against commodity. For instance, if you are coming from Ilorin, the first stop is Osogbo and Ibadan is the next. If another train is coming from Lagos and heading to Ilorin, a cargo train from Ilorin will have to stop in Osogbo for the passenger train from Lagos to have an interchange, and that amounts to waste of man-hour. So, how much will it cost to lay a standard rail gauge? Also, you can see that our coastlands are just a waste.
If l am coming from Ikorodu to Apapa, l don’t have to use the road. Look at this scenario. I left Okota recently after a management meeting for Apapa via the waterways and it took me only 10 minutes.
But the same journey took my driver one hour to meet me in our head office at Apapa. And that is why we at Sifax have decided to invest heavily in the water transportation system. Already the Group has two boats from Ebute Ojo to the Island.
What do you say concerning plans by the present regime to revive the rail system?
If government did not allow it end up the same way other projects with huge projects had ended in the past, it will be a beginning of a greater Nigeria. In fact, l will even give the government of the day a pass mark for conceiving the idea. If we can solve the problems of transportation in Nigeria, we are headed for greatness. It would interest you to know that the Federal Government controls about 18 percent of all roads in Nigeria.
About 60 per cent belongs to states while the local governments are in charge of the rest. Meanwhile, 70 per cent of vehicular traffic is on the federal government roads. Transport generates huge employment in any nation, if well taken care of. For purchasing just 20 trucks recently in our company, we needed to employ additional 70 people to join our workforce. Remember that each of these persons we have just employed represents a family and they have dependants. So, you can then imagine the number of people that will benefit from the jobs we have just created in the country.
There are people who supply diesels, tyres, and other things to this company, who are indirectly employed. So, you can imagine if government will fix every issue in the nation’s various transport system, what the impact will be on the economy.
How is the investment of about N1.5 billion on new trucks by your company affecting its bottom line?
Let me start from addressing the why. People say ants are naturally attracted to where they can find sugar. Sifax is just like that. We have been able to prove to people in the business sector that we are not here to joke. We have been able to add value to people’s businesses. So, when your supply is no longer meeting up with your demand, you should know that that is a big challenge. So, when we discovered how seriously people need our services, being the only terminal in Apapa that owns its own trucks, we decided to invest in more trucks as our customers are bent on our taking their goods from the bonded terminals to their various destinations in the country. That means expansion to us. Now we are expecting an increase in revenue generation to cushion our cost as a result of this investment.
What’s your profit forecast in five years?
I’m not sure I’m permitted to make public our forecast for profit. But l can tell you that the addition of the new trucks to our fleet of trucks, will at least double our profit.
Sifax will be 30 years old by November. How will you rate its achievements?
Though I’m still young in the group, my position has given me access to some privileged information. You need to know we are into many sectors of the economy. As a matter of fact, l had admired this group from a distance. So, when l was applying to KPMG for a job, little did l know l was indirectly applying to Sifax. But based on what l have seen, Sifax is a company that adds value to the lives of people. This company does not owe salary. This is a company that places value on the lives of its people. Besides, we are solid, we are liquid. It is a forward-looking company. We are a complete supplying chain company. You can see that we have our presence in aviation, maritime, transport and oil & gas. We are virtually everywhere.
What value have you brought to this company?
l want to say Sifax does not lack people before my emergence. But there must be a missing link somewhere. That was the reason l was employed. I think they have seen value since l came in. We have started expanding. We have bought new trucks after my arrival to expand the business. My vision is to increase our fleet of trucks from the 55 l met to 200 in one year. I have the backing of the management to achieve this and all l need to do is turn in the proposal for us to fly.
What you’ve just seen is a tip of the iceberg. We have so much business on ground now that we are beginning to have doubts, if the 20 newly acquired trucks are adequate at the moment. We want to help Dangote transport its flours and we are already having talks with Olam to do business with them. Besides, l have been able to cut down the cost of doing business by five percent since l came in. I also have the native intelligence to know what things to do handle difficult situations. Let me add one more to it, it is the ability to manage human being. For me, it is God-given. I have it.
Who are your business partners?
Internally alone, l have so many. Sifax Shipping, Cargo, Aviation etc. They do the clearing while l do the forwarding. We also deal with multinationals like NBC and BAT. World Food is one of our biggest clients too.
We have the solution, if government cares to listen to us. For instance on the Ibadan-Lagos expressway, rather allow religious organisations to acquire all the parcels of land available there, can’t we establish a dry port in that corridor? We can create a rail line from Apapa to evacuate the containers to the dry ports.
On one side, you are creating jobs and on the other side, better value is given to landed properties whilst the lifespan of our people increases.
The truth is that, we know the right things to do, but nobody seems to be interested in doing them for some selfish reasons, especially a few individuals that are benefiting from the unstructured ways we do things in this country. It is very unfortunate.