15 YEARS IN OPERATION

Nigeria 2020 | TRANSPORT & MARITIME | VIP INTERVIEW

TBY talks to Marvin Abe, Managing Director of Apapa Bulk Terminal Limited (ABTL), on 15 years of operations, congestion, and reform of the port.

Can you tell us about your operations?

A great deal has changed since our establishment in 2005. The port itself was extremely old and poorly maintained pre-privatization. Our parent company, Flour Mills of Nigeria Plc, saw the need to take advantage of the port privatization process in order to enhance our value add to the Nigerian economy. Our terminal handles imports of both liquid and dry bulk shipments for Apapa, so you can expect us to handle tankers vessels for liquids and dry bulk carriers for wheat, Sugar, fertilizer and similar products. We currently handle bulk liquid products such as vegetable oil. Ethanol, Base oil, and other low-volatility petroleum products. We also handle export of bulk products such as wheat offal. I joined the organization in 2017 with the goal to improve on its processes and systems, in 2018, we won the Best Terminal Operator Award while in 2019 we also won Africa's leading Premium Port Terminal Management Services Company of the year award. We have made significant gains in the way we manage our activities and that has influenced us to be more efficient and customer-centric. We are therefore not just here to make money, but to do so the right way thus ensuring we keep the customer's interest foremost on our mind. We revised our vision to now include all the stakeholders in the business, and that is reflected in our behavior.

What challenges does the port face with stranded empty containers?

As we are mainly focused on bulk products, it does not apply to us at the terminal per se; however, as we share common roads, this impacts our movements and productivity. The congestion, about half of which is caused by the empty containers, affects us in that way. Because we are largely an import dependent economy, we have a challenge of dealing with large volumes of empty containers. If we had commensurate exports, then the containers would have found other uses and be widely spread out that way. In that scenario, we would have proper infrastructure from the factory gate to the port as an enabler for the export of goods. The port is currently upgrading its rail system, I expect that it will play a significant role in addressing some of the congestion presently being experienced. The dynamics of the port is expected to change upon completion of the rail upgrade in early 2020. Cargo movements will be quicker, and we will have more direct movement out of Lagos.

What is your assessment of the overall impact of the reform of the port?

Everything positive comes at a price. Before the port concession, waiting times at the port was long; ships remained at berth for several days up to a month. The port was inefficient, and little was working. Size of ships that could be accommodated was severely limited constrained by available depth. So only relatively smaller vessels could call. This meant low revenue and low growth. After the Port business was privatized, many of the inefficiencies disappeared, and the port became more commercially driven, channel and berth depths were improved, berths and cargo handling equipment were upgraded. We now have larger ships coming in, and dwell times are shorter. Unfortunately, the government overlooked the need to expand the infrastructure to be at par with the expected outcomes post privation. The port access via rail, inland waterways and land was not upgraded. The port access road needs to be expanded and repaired, the inland waterways that have not been utilized effectively, unlike in countries such as the Netherlands and Belgium. The use of the waterways needs to be better regulated and navigable channels defined and marked to enable safe transit. In above mentioned countries, a large portion of cargo movement is done through their network of canals, taking advantage of their waterways, we have not exploited that resource in this part of the world, thus putting great pressure on the few access roads available. In 2019, we started seeing a shift from that with many private companies participating in barge operations. Hopefully, this will grow further, and regulation will be more robust to enable organizations and other third-party service providers participate. As a terminal, it is highly unlikely that we will own or operate barges, we will however support such companies, if these other modes of transport are fully exploited, the issue of road gridlock will most likely be completely resolved.

What do you expect for 2020?

I see growth first, although the port business in Nigeria is tricky; a great deal depends on the Federal government's policy pronouncements. If the economy grows, then the port business grows and vice versa. Although we are still predominantly an import nation, Apapa Bulk Terminal will be able to take advantage of the new businesses around and exploring export potentials, particularly with the African Free Trade Agreement. ABTL has increased its market share in the wet bulk and unitized cargo category without compromising its share in the dry bulk category, a little diversification to boost our positioning, we are also open to exploiting investments in other areas outside of Apapa. We have our ears to the ground on discussions regarding other opportunities to grow our land area, if possible. There is a deep-water port being considered in Ondo, Lagos, and Cross Rivers State. The Lekki seaport is also being developed, but for it to effectively compete with Apapa Port, a great deal of work will need to be done so that Lekki doesn't end up congested with the same problem of poor road access. A robust access infrastructure with adjoining arteries as well as power, will have to be developed.