Okumagba: Greater Packaging Will Enhance Agricultural Exports

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Mudiaga Okumagba

The Chief Operating Officer, Red Star Express, Freight Division, Mudiaga Okumagba, in this interview says the company is prepared to play a leading role in the export of indigenous products. Chinedu Eze brings the excerpts:

When you mentioned freight, we have air and seaport, is your specialty air cargo?
No, we do both air and sea; we specialise in air and sea freight. We are also into GSA (General Sales Agent), we got our GSA license about a year or so ago, almost two years now. But we just started with Aero Contractors, there are other airlines that we hope in the next couple of months will start working with us. That is domestic cargo, but even foreign airline, Lufthansa; hopefully before the end of the year we are hoping that we will be handling Lufthansa as well.

What is your relationship with Fedex?
Red Star is a wholly Nigerian company owned by Nigerians and run by Nigerians. We have a partnership; we are licensee of Fedex. So it is a kind of licensee- licensor relationship that we have with Fedex. Fedex, of course, we all know is an American company, so that enables us to ship anything we are shipping out of Nigeria, it goes into the Fedex network. But for us in Red Star, Red Star freight, we have our own network partners, we belong to two other networks apart from Fedex networks, we have independent international network partners. One of them is IFLM and WCA, and we belong to those networks. What those networks enable us to do is that we can pick up shipments from any part of the world, we can contact any of the companies, companies like Red Star in Nigeria, America, Indonesia, in any part of the world, they can help us get our shipments from door to door. You know we do door to door shipments either by air or by sea.

What are the details of the GSA you have with Aero?
Well, like our business, we started as an air express delivery company, that is Red Star as a company. So our main area of competence before now is the air express. So we deal more with airlines and all of that before we started going to the sea. So for us the airline industry is an industry we are really familiar with and we have been doing business with them.

A lot of airlines have been approaching us, asking how they can generate cargo through us, since Red Star is a cargo generating company par say; we have outlets all over the country. We have 166 offices nationwide, so that tells you our capabilities within Nigeria. So a company that has 166 outlets, getting cargoes and all of that, why won’t you want to partner with them than just to partner with hustlers at the airports? So we are professional cargo handlers and cargo generators, so to say.

So for us, really we know this is an area where we can play, we have the strength; we have the capacity in terms of offices and even staff nationwide. So why do we allow non-professionals to now be running this profession? The airlines know this; a lot of them prefer that cargo generators are better able to manage such business because we know the implication on how to handle cargo, the implications of allowing the wrong cargo to enter an aircraft. We know what it means more than those who are not really professionals.

When you say cargo generators or generating cargo, it means you get cargo from the clients and then you move them. Does this include perishable goods?
We also handle the agro, Red Star Agro trade. So we deal on those subsidiaries, in fact we have just merged those subsidiaries with the freight subsidiary. So we handle perishables as well, we do a lot of export. Perishables, of course we develop different templates, we don’t farm but we handle such things on behalf of farmers and aggregators.

How quickly do you move them?
We have done quite a lot of shipment in that area, we have done for a lot of customers, we have moved to America, United Kingdom. We do them by air and I am sure the ones that we have done they are very successful. For instance, there was a time we did a lot of pepper, tomatoes and all of that to the UK. We have done vegetables to the UK and in 24 hours they are there. And of course you already have somebody at the other end to do the clearing.

In terms of freight business, I know that between 2016 and 2017, there was a lull in the economy, how is the situation now?
Well, there has been a lot of talk. Personally, I don’t think we have seen a lot of action in that direction. We have a lot of constraints; a lot of our products from Nigeria, the truth is that they are not so competitive at the international market. And this is because of the fact that there are too many windows at our export gates. In Ghana you have just one gate, I am sure you have heard a lot of stories where Nigerians even have to go to Ghana to export their items because it is one gate that means that it will be a lot cheaper. At different fora we have had these discussions even with the Customs authority to see to the reduction of these gates. We have tried to present it to them but the problem is not just with the Customs; alone it had to do with government policy and how we can harmonise some of the various units. You have National Agency for Food and Drug Administration (NAFDAC), Standard Organisation of Nigeria (SON) and these agencies have to go through these goods individually. Most times they even become bottlenecks and become impediments. So, if they can have one window where we have a kind of documentation that will facilitate, rather than talk to everybody you just have the forms to capture all that is required and you just deal with one phase. I think that will reduce a lot of the challenges.

Receiver nation have to certify our producers. Do we have those certificates?
Well, for you to export more that means that they should be able to overcome those bottlenecks. Price is very important, the issue of certification, that quality, is very important because it starts from even the planting stage, and the packaging. If you go to the airport, you will see that sometimes the way they package some of those perishables like the vegetable is terrible. And you know when those things get over there, those people we will not say that their system is perfect but they have very high quality standards.
So they don’t even accept some of those things, they would either be destroyed, and when they are destroyed, they are destroyed at a cost.

So you are even asked to pay for the destruction of your own item most times. And it is very bad for an exporter after investing so much only for your item to get there and they are destroyed. Or sometimes they get there and because of lack of certain information you are unable to even clear them on time. There are cases where perishables are not cleared and they get bad.

So you need to be properly informed. What we have been doing for a lot of our customers in that regards is to educate them. Now, if you want to do anything at destination, do you have a good representative at the other end who has done all the documentation? If you are exporting for the first time, there are certain things you need to take into cognizance. Because you are doing it for the first time, there are certain documentations you need to do and it will take a while.

So you need to take that into consideration, the items that you are exporting. So those are the things that we advise. But one thing that we have also tried to do is to see how we certify farms. A lot of the people we export for, we work with the quarantine unit and a lot of the farms that we have been using for exporting vegetables and all of that, we have gotten them certified. Such that their product at least they have gone to inspect and they have also advised them on what and what to do; such that whatever product we are exporting meet international standards.

Why do you plan to sign airlines as General Sales Agent?
With GSA we have the authority to handle any airline’s cargo in the territory that we operate. When we say territory in aviation it means a country. And once you have it, there are lots of opportunities out there. You know we see Nigeria as an importing nation and most of these shipments that are coming to Nigeria will definitely be moved to other parts of the country, the north, east, south and other destinations.

We are not only focusing on domestic cargo, we are planning to have a relationship with our domestic airlines and the foreign airlines alike. Presently we have signed an agreement with Aero Contractor; we are negotiating with other domestic airlines like Air Peace. Our negotiation has gotten to a certain level and almost concluded. We are negotiating with Medview Airline too; we have proposal with Dana Air, and some others.

When we look at the international sector, we have our proposal with Lufthansa, we are negotiating with them and they promised to give us the business to handle their shipment at Port Harcourt and Abuja, including Gabon. So we are still proceeding in getting that business for Red Star. Red Star has a vision; it is not just to handle cargo on domestic or international territory; we are looking at flying our own aircraft. Because that is the opportunity you have in GSA business.