SEGUN OLUGBOYEGUN

Nigeria 2020 | INDUSTRY | VIP INTERVIEW

TBY talks to Segun Olugboyegun, Managing Director of JOF Nigeria Limited, on customer base, reducing cargo transportation time, and priorities for the coming year.

What is your competitive advantage, and how do you manage your loyal customer base?

Cadbury, Nestlé, Unilever, Nigerian Breweries, and Guinness are our core customers. It involves doing what you say you will do and not changing contract terms in the middle. We were able to ask our core clients on a weekly basis their raw material requirement and adjust production to fit their needs. They do not need to carry a huge stock, as a huge stock means tying down money. We are also able to tell them a single price for a consignment. Therefore, we might import and store their products in the short term; in some cases, clients want product delivered immediately, but in other cases, we have developed an arrangement where we keep the stock and deliver on a just-on-time basis, taking into account the financing and delivery costs. We have over a hundred trailers. Our competitive advantage is we carry out every delivery requested. We have many professionals in the business. As the business was developing and growing, we brought in experts from different areas; I just tell every single one to deliver on promises that we have made. In 2014, we were one of the 100 big businesses in Nigeria.

How has the closure of land boarders affected JOF and the logistics service provider industry nationwide?

Up until the border closure, we were taking finished products from Unilever Nigeria to Unilever in Ghana, as Unilever is seen as one company and Nestle is seen as one company. We would bring stock from these companies via road, and they would sell to their sister companies. Furthermore, we also brought the products they produce abroad that they sell here. If there are raw material issues, we will bring raw materials from their sister company or from other manufacturers or suppliers within ECOWAS, including Ghana and Benin. We are aware that there are many things coming into Nigeria for which no duty was being paid. This smuggling is why the federal government shut down the border. We work with most national companies, and we pay the full duty for whatever we are bringing in. In exports, we ensure the other party pays the duty at their end. As the border is closed, these goods cannot go by road anymore, but they can still go by sea freight. This process is a bit complicated, as the sea route to West Africa is not well developed. If you want to use international freight liners or large shipping companies to export goods from Nigeria, unfortunately products go from West African countries, and then Europe, before they reach Nigeria. So, if you are sending goods from Nigeria to Ghana on Maersk line, the goods will first go to Europe before coming to West African. It is complicated and there are many costs associated with it.

What opportunities for diversification has road deterioration in Nigeria offered JOF?

For every problem there is a solution. Because of the road issues, we are using the train to move our cargo from the port. We have also been using barges on the waterways to move our cargo out of the port, which we have found to be effective. Due to this, we have a little port being developed where our barges can go, and, pending that, we use the Ikorudu light terminal for our barge operation. Hence, we bring in the goods by barge. Our trailers then go there, where they load the containers and take them to our clients' factories.

How will this port reduce the time of the cargo transportation, and how much cargo can it support?

It will be first and foremost for our clients, then we will open it to third and fourth parties to use. With this new port, the value we bring to our customers is that they do not have to clear their goods at the port. This was done because the process was taking too long and people were complaining. In terms of cargo support, we are looking for a space that can line up three different batches for discharge and can store up to 1,000 containers. We are supporting the operation we already do with the dry port, which is the container terminal and bonded warehouse that we have had since 2007.

What are your key priorities for this year?

We intend to complete the building of the small container mini port and terminal where there is a long jetty that can berth a few barges. They can put all their equipment there and offload onto the jetty. We can also make it into a bonded terminal so one does not have to clear the goods. Furthermore, there will be space for customs and other agencies to have their operations. It is a way of decongesting the port; thus, we are working with APMT to make this happen. Our clients have bought into this and are excited about it.