DESTINATION REACHED

Nigeria 2019 | TRANSPORT | INTERVIEW

Costs of transport remain high in Nigeria due to unreliable infrastructure, but one Lagos-based logistics company hopes to ride the country's economic rebound.

Ralph Abi Chahine
BIOGRAPHY
Born and raised in Lebanon, Ralph Abi Chahine moved to Nigeria in February 2006 after completing his MBA in marketing studies. He also holds a BA in accounting. He joined Red Bull - Arizona tradings for almost two years as their national sales manager. By July 2007, he had moved to Channel IT Limited and was later appointed as sales and marketing general manager for Dell. After this, in 2009, Abi Chahine and his two brothers established a family-owned business, “Unireach LTD,” a logistics business managed by a team of professionals. Chahine is the executive director. In addition to his position at Unireach, Chachine works with Premium Partners, an international company with 19 branches worldwide. He has been its managing director since 2017.

How was 2018 for Unireach?

The market started to improve in 3Q2018, and, as a result, our clients imported more goods as compared to 2017 and 1H2018. This gave us an indication that Nigeria's economy is bouncing back, which is why we have high hopes for 2019.

What kind of goods are you focusing on the most?

In 2017, following the devaluation of the naira, big manufacturers that used to import 200 containers a month dropped almost 60% of their importation but in 3Q2018 we saw a significant increase in importation. We bring in different types of finished goods for traders such as electronics, chemicals, spare parts, machineries, and other construction materials, and recently we got in the supply chain of a couple of oil and gas companies.

Can you tell us about the diversification of the group?

In mid-2017, we partnered with Premium Partners, a multinational company operating in 19 countries including Nigeria. It is specialized in marketing and procurement solutions. We offer procurement solutions and provide companies with what they require in order to promote and market their products. We have major clients such as Swipha, BAT, IHS, and Airtel, for example.

Are you exploring further areas of diversification?

That has been a major focus for us since 2017, when we established Select Minerals in order to trade in minerals. We have identified local medium to large miners and suppliers throughout Nigeria and have established a business relationship with offtakers abroad. In fact, we are presently busy delivering our first pilot shipment.

How are you trying to gain more clients for Unireach?

Initially, Unireach was focused on turnkey, full supply chain projects for telecoms, power, construction, and mainly inbound and outbound CAPEX for existing and new clients. When the naira devaluated, many projects were put on hold. We had to widen our angle and approach regular importers, since we have the infrastructure, expertise, and manpower to do the job. It has proven to be the right decision for us.

What is your financial engineering strategy to further finance your growth?

We have been working with local banks and have proposed to expand the business together because. We can use financing from banks to keep investing in the market. We have been using our own working capital to expand the business for the last 10 years and we can keep on doing that but since there are several new opportunities—we could make use of more finances. Discussions are still ongoing on that matter.

How challenging is the Nigerian transportation sector? Has there been any progress in road conditions?

Logistics-related services in general are considered to be one of the most challenging and stressful businesses in the world, and the lack of local supporting infrastructure at Lagos ports makes the job even tougher for us. There has not been much progress in that area, unfortunately. In April 2018, the transport union held a large-scale strike due to the quality of roads around the port and, as a result, transportation costs drastically increased, by up to 300%. However, fortunately, it has dropped slightly from January 2019, mainly due to government improvement of road network.

Do you see your efforts hampered by degraded roads?

Yes, to a certain extent. Roads are generally in bad shape, and we ended spending large sums of money on trucks repairs. For that reason, we got rid of our trucks and outsourced the whole transportation sector to reliable haulage partners of ours. A few months ago, the cost of transportation within Nigeria was almost equivalent to the sea freight cost of a container from China to Lagos port.

What is your outlook for 2019?

I am an optimistic person and even in the worst years I remained positive. We have a good feeling about 2019 based on the number of bids, projects, and requests we are constantly receiving from existing and new clients. We are confident of the level of services we provide at Unireach and the trust of our clients keeps us going forward. We believe that the best is yet to come.