Could you elaborate on the background of the company and its position in the Nigerian market today?
In 2003, Nigeria's Cabotage Act was passed to summarily make coastal trade the exclusive preserve of indigenous companies. Eventually, the National Content Development Act was also enacted. These were part of deliberate attempts by government to facilitate the deepening of indigenous participation in the marine logistics in particular and the Nigeria's oil and gas industry in general. Tamrose Ventures Limited entered the market with a strategy based on three pillars (tonnage age, service delivery culture and organizational structure). We looked at the age of the indigenous tonnage, which was averaging above 20 years, and decided to buy a brand-new vessel. We looked at the caliber of people in the marine space and how they approached service delivery, and decided to do things differently. From day one, we decided to be a customer-centric company that puts customers' interest and expectations above all else; and we walked our talk. This made Tamrose Ventures Limited a service-driven company. Thirdly, we looked at the management structure of some of the existing companies and realized that most business owners were actually running a lifestyle oriented businesses with attendant consequences. We decided to set up a business with proper structures built to last. The strategic integration of these three pillars defines TAMROSE, and the response we have received from the market thus far shows we are doing something right. From just one relatively small vessel in 2010, we have grown organically to a fleet of 12 vessels (including 2 PSVs) in 2019. We have also grown in terms of our vessel tonnage and category and are looking into the future with confident optimism.
What does the acquisition of new vessels signify for the company, and do you have any other expansion plans?
Our vision is clear; we aspire to be the dominant marine logistic services provider in the Nigerian oil and gas industry. With a vision like that, expansion is second nature to the company. Over the last four to five years, we have been extremely cautious about how we grew, primarily because of the slump in oil prices. In the absence of any political crisis as a result of the 2019 elections, we projected there would be an upswing in industry activities, which is why we undertook an aggressive fleet expansion drive. Of our 12 vessels, eight were added in 2019 alone and all are gainfully employed adding value to our customers' operations. With these new additions, we also had to strengthen our human resources to sustain and even improve on the quality of our services. In 2020, we intend to consolidate our operations to ensure all these assets run the way we want them to and that our operations allow us to consistently deliver the service quality that Tamrose is associated with. In 2020, we also want to take a step back, look at the environment, and decide what to do next. This industry has great potentials and consequences; a single move can impact a company tremendously one way or the other.
One key challenge for indigenous companies in Nigeria is that of sourcing capital. How have you overcome this challenge?
There is a funding challenge in Nigeria no doubt. However, lending institutions in Nigeria are doing their best to support serious indigenous players. The recent CBN policy on deposit lending ratio is another step in the right direction. So, one can say we are making progress, and the prospects are looking brighter going forward. In 2019, with the purchase of eight vessels, TAMROSE spent a significant amount of money on assets acquisition. This was made possible by the robust financial support received from our financial partners Union Bank of Nigeria Plc and the Bank of Industry via the Nigerian Content Development and Monitoring Board (NCDMB) intervention fund focused on enhancing indigenous capacity by granting them, single-digit USD-denominated loans. Tamrose has been able to secure good-sized funding from her primary financial partners at very competitive and supportive rates. Recently, we have been receiving overtures from foreign-based entities, such as private equity firms and fund managers looking to partner with us. the world believes the opportunities and prospects in Nigeria and Africa are fantastic, we are the new frontiers. The funding challenge can be tackled if indigenous players can get their act together; it is only a matter of time.
What is the perception of local players in the sector, and what future opportunities do you envision in the industry?
The main reason for setting up TAMROSE was to change the indigenous service narrative in the oil and gas industry. In addition, we have seen other indigenous companies push the envelope, break the glass ceiling, and make an incursion into areas that were hitherto dominated by multinationals. It is only a question of time before this narrative is completely rewritten. Therefore, the future opportunities are endless. The price of crude oil is better than it was in the very recent past. With that, we expect to see a great deal of activity within the oil and gas industry. The security challenge is there, but the accessibility of the Nigerian terrain, ease of extracting crude and the low Sulphur content of our crude, will continue to be drivers that will encourage IOCs to invest in the country. If we look at our industry segment and the combined marine services spread of the four major players in the E&P sector in terms of what is owned by indigenous players, you will realize that we are just scratching the surface.
What are your key priorities and expectations for 2020?
My priority for 2020 is to set the framework for making TAMROSE an institution. I have taken a look at our industry historically and cannot find any indigenous company that existed 20 years ago in this space. Therefore, 2020 is about laying the foundation to ensure that in 20, 50, or 100 years from now, Tamrose will not only be here, but will dominate this space.