Business in Nigeria
The Chief Executive Officer of GPC Energy & Logistics Limited, Mr. Elvis Okonji in this interview with Peter Uzoho, speaks on a wide range of issues including his voyage into full time haulage business and his personal principle and philosophy that are driving the success and growth of the multi-billion naira business. Okonji also delves into his eternal passion for logistics business, the ambition of the company to become a publicly quoted company as part of his goal to build a large business empire; and end touting in the haulage industry
You have been in operation since 2010, what has been your experience in the haulage business so far?
It is something I have to smile about because it has not been easy. It has been a rough road in the last 10 years as the CEO of this company. I will not say it has been interesting, neither will I say it has been bad, but in all, God has been able to see us through till date.
What is your major area of service provision?
As GPC, we are basically into dry cargo. We work with the FMCGs in the country. We work with PZ, we work with Nestle, Nigerian Breweries, Lafarge, Guinness, International Breweries, and then, we are currently doing hauling of fertiliser in the country from Indorama in Port Harcourt to all the blending plants in the county.
Looking at where you are coming from as a company and where you are today, do you think you have been able to close that gap that you saw then that made you to venture into the business?
We can’t close the gap because the gap in the country is so wide when it comes to logistics or when it comes to transportation business or the haulage business. The haulage business is very wide. You have the wet cargo, you have the dry cargo. The dry cargo is for the FMCGs in the country, and then you talk about the guys carrying the granite from the quarry; you talk about the guys carrying the diesel haulage. So they are so wide that GPC can’t finish. Even if you have 100 haulage or logistics companies that have over 50,000 trailers you can’t close the gap. The business is so wide and then the capital to start the business is so much. So it is not easy. Imagine, when we started this business, getting a Chinese trailer would cost you about N10million or N12million. Today, getting one 30 tonnes Chinese trailer on the road will cost an average of about N36million. So how can you close that type of gap? The gap is huge. If you say you want to buy European truck, putting one on the road will cost you around N65million or N70million. If you want to put it on the road on today’s FX rate, it is not easy at all. So we can’t cover the gap because it is huge
How many trucks do you have running now?
We have a lot of trucks because it’s not something you want to say openly to the world. We try to be very quiet in our business model. But I will say we have tried when it comes to the number of trucks we have in the country. Currently, I may say we have over 600 workers working in this company. So you know what it means when somebody says he has over 600 workers. But we know that we have done a lot in removing people from the unemployment market. I remember vividly this year, we bought 150 European trucks for Nigerian Breweries. When you have 150 trucks that means you have employed over 200 people on that alone. And then when we are assembling the truck, we employed people that helped us in assembling them. So that alone, you have also removed about 100 people from the unemployment market. So we are trying, we are creating jobs for Nigerians.
What are the challenges haulage operators face in the course of the business?
There are so much challenges in the business. We run business on the road. I will tell you that the current government has tried when it comes to road maintenance in the country. Some years ago, you cannot go from here (Lagos) to the north easily, you can’t even go from here to Benin easily. But today, the infrastructure the government is putting in place is helping us now. So it is better now compared to what it was some years ago. So I will tell you that I embrace the government efforts in road infrastructure. However, our biggest headache in this business is touting and excessive extortion. Every state government wants to collect money from a truck owner. When you pass some states, they will want to collect money, they have their own agents. So, you see multiple taxation in the business. That is a very serious challenge to us. The touting activity is so much on the business. You are going from here to Ogun State, people will take stick and block the road and tell you to pay this amount of money. Every state you go to it is the same thing.
Imagine, there is this sticker we buy from each state, if you buy it in Ogun State now, when you get to Gboko in Benue State, they will tell you that is not their own paper, and I begin to imagine, are we not in the same country? They come up with different policies. When you are loading a state government will tell you that every load you carry you have to pay me extra amount of money. So it is challenging. It is killing. When I mean it is killing, it is killing indeed. When I started this business 10 years ago, I had colleagues whom I started it together with, I think all of them have gone down the drain. They have no money so they have closed shops, they are liquidated and had to shut down. Most of them are heavily indebted to banks, they can’t even pay. So right now because of the challenges in this business, we now have fewer players. Some of the policies of the government are not helping us.
The frustration is so much. Local government will come and tell you to pay it so so amount of money. So, the multiple taxation is so much on us. Imagine, before you leave, a state will come and say they have given somebody the job of collecting money from truck owners. Every state will have that and before you know it they harass your truck, cause accident for your truck. There is a lot of touting in the business. That doesn’t happen in advanced world. So I think the government should come in and see how they can help in stopping the touting issues we are facing in the haulage business in the country. We are passing through hell.
When did you develop interest in haulage business?
I have been a workshop boy from my childhood. My father was a mechanic, I used to go to workshop with him and also when I was in the university it was tough for me to get money to go to school. So where my father worked, I will go there to do odd jobs. So I followed truck drivers to travel, when they carry loads, I act as conductor for them. So from there, I left university, I started working in the bank. And I was having a project while I was in the bank that involved us bringing goods into the country. So by the time the ship berths, I begin to see middlemen, they would start looking for trucks and making money even more than the owners of those trucks.
So I said it means there is something big in this business. So with my background and my understanding of trucking, I now said, after all my banking experience, from the university I’ve gone to, my finance knowledge, everything, I think I can do better in this sector, and also as a street man, who came out from the street. You know when you come out from the grass -you don’t have any hope, nothing in life, and then you see an opportunity to tap into something that you think will change your life -you will put all your efforts. And then it was from that project that I saw that there is a lot of opportunities here. Most of the people that went to school and are graduates don’t want to do that type of business. And you see the illiterates now making money from it. So I now I began to think that if I come into this type of business and put in my banking experience and then my street sense and everything, I think I will be able to do better. That was how I resigned from the bank early 2010 to set up GPC Energy & Logistics. We had wanted to go into full time energy business -trucking of wet cargo -petroleum business, but we saw a lot of dishonesty in the market and then said no. We came back to the drawing board and said no, we won’t go to that aspect, let’s stay with dry cargo where we will focus more on the multinationals in the country. And that’s where we are today, where you will not go and beg somebody or bribe somebody to pay you what you worked for.
We have a system here, we don’t joke with our integrity, we can’t give you bribe and you cannot give us bribe. And so that’s why we focus mainly on the multinationals -the Nestle, the PZ, you can’t bribe them. You work, you earn your money. If they tell you they are going to pay you today, you will see your money as they said, you don’t have to go and beg. So that’s how we were able to get to where we are today. It was tough, it was a very tough decision to take. All the friends I had were telling me not to go into haulage business, saying ‘it’s risky, you will risk your life and all kinds of things, just to discourage me from going into the business. But my mind is strong. Today I don’t have blood pressure issues, I don’t have any terminal illness, I’m strong and healthy. I take the business as part of me, part of my life, it’s fun to me. We borrowed so much from the bank to do the business, we keep paying the banks back. We don’t have any issues with the banks we are working with, we don’t have any issues with our clients, they are good, everybody is happy.
What particular personal principle do you think is helping to drive your business?
I’m a very principled person. I keep telling people that my word is my bond. If I tell you that if you supply me XY, I will pay you on XY date, that date, you will get your money. So it has helped me a lot. It has made my suppliers believe in me, it has made my bankers believe in me, it has made my suppliers abroad believe in me, everybody believes in me. They will tell you, if it is Elvis, don’t worry, GPC will pay you. So what has pushed this business to where it is today is our integrity. And it is extremely key to us in the company. Everybody, from the beginning to the end of this company, we keep telling them about integrity, respect for individuals, that’s what we keep telling them. We don’t joke with that. So we call it acid here. We ask ourselves, are you an acid? Because when acid goes into anything it spreads round.
So we keep putting all the acid in the system and that’s why we are here today. If you go to my bank and tell them you gave GPC load, they will tell you ‘go and sleep, your money will be paid back to you’. Everything is all about integrity, life is all about integrity. Let people not doubt your person. Imagine, I’m not a son of a rich man but today I run a multi-billion naira business. We started this business in 2010 with five trucks, today we have over 600 staff. That’s to tell you where we are going to. By end of the year we should be hitting more than 1,000 trucks. So there is no issues with all the banks we borrowed money from, we have paid 100 per cent of what we owed them from day one. So we don’t joke here, we mean business, because we want to take the business to the next level. If you watch, you see, people set up UPS and others, worldwide.
We have a dream of where we are going to. We want to run a business that will outlive us, not a business that after Elvis, it is gone. My dream, the dream of GPC is for us to run a business that will live after our generation. So how do you do it? You have to create integrity, principles, what has to be done, everything has to be done right from day one. You have a good template. The corporate governance has to be there. When a business does not have corporate governance, it’s gone. There has to be systems and processes and in the last 10 years, we have been building systems and processes and that’s what has helped us to where we are today. So currently I’m not on any stress. People say haulage business is bad, I don’t believe it. Let me tell you, in my next world, I will be a logistician. It’s something I have joy doing. You see, a lot of people fail in this business because they don’t get their goals right.
How can you set up a logistics or haulage company and you go and put the office in Victoria Island? How do you want to succeed in it? You will set up a haulage company but you don’t have a yard where you maintain the trucks, you don’t have systems and processes in place. How will you cope after spending all the millions? You go and pack them along the roads, tomorrow LASTMA will impound them, then it’s a failure. Let me tell you, I will have greater joy when GPC becomes a PLC. It therefore means the pioneer CEO has not achieved the dream of his life. I want to run a business that investors will benefit from. If you put money in GPC, you are sure of getting your money back, you are sure of getting your dividend back, you are sure of building an institution that will outlive me. I want to be happy the day I resign as the CEO of this company, that I am the pioneer CEO, that I took it from one level to where it is. We work as a team here, I don’t take decisions alone. So that has taken us to where we are today.
How were you able to carve a niche for yourself when you entered the sector that already had big players at the time?
It is continuous push, never believe you are a failure. From day one, we had a plan and keep working with the plan and we said we will never fail. There is no No for an answer in this company, GPC; that’s the team for you. We built a team and the slogan of that team is, ‘no No for an answer’. And we keep pushing. And what we said to ourselves is that none of our soldiers, none of our clients will doubt our person and we have kept to it. We can sit down here and say we need truck from China, we don’t need to pay, we just communicate with them, they will give us bill and send trucks to us. Same thing with Europe, because we have delivered that our integrity here, we have built a solid company that has come to stay. They keep saying that a son of a poor man will want to work hard and make sure that he survives, he removes the poverty out of his lineage. My father is almost 90 years of age, he is in the village today. So we came from zero to where we are today. Let me tell you, GPC story is a story that is God’s doing. Even when I look at the company today I begin to imagine how did we build a business in the last 10 years that will live to the test of time? But when I look back I say we worked so hard. I stayed in my yard for five years. I was learning every trick about trucking: how do I interact with my drivers, how do my drivers behave. I almost became a mechanic.
Have you been on the road with your drivers before?
Yes, I go on the road with them. My four, five, six years, when accident or anything happens I go on the road to see it. I run round and understand what the drivers are passing through, so I put a face to them and that is why in GPC, my numbers are open as the CEO of this company. Everybody talks to me, even my drivers call me anytime and I pick their calls and hear what their problem is. We run an open system here.
Do you share the view that there is no opportunities, no hope in this country?
No, I don’t. Let me tell you something, when I left university and I got a job in a bank, I was telling my God that the day I make the first million in my life I would leave the country. That was then. But as time goes on, I started seeing opportunities. This country has a lot of opportunities. What you are looking for abroad is here. What you are looking for in America is in this country. Don’t you ask yourself why did the Chinese, the Indians, the Lebanese, the Europeans, most of the Americans come here to work and they don’t want to go back? When you ask them to go back to their country they start crying.
In a country that you have a population of over 200 million people, how can you be poor? If you are focused and you know what you want and you have your integrity in place, if you start up with one million naira or even with N500, 000, you can’t be hungry in this country, I’m very sure of it. We have not tapped the enormous opportunities we have in this country.