| Why private refineries
can't work here – Jimoh Ibrahim, Global Fleet CEO
By CHIDI NNADI
Monday, January 31, 2005
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Jimoh Ibrahim
Photo: Sun News Publishing |
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Like an elegant damsel, Global Fleet Oil and Gas Nigeria
Limited within one year of its foray into the downstream oil
sector has become the beautiful bride of the major marketers.
Beginning business with African Petroleum (AP), the company
is now also selling petroleum products under the brands of
Total and Oando Plc, but in its own stations.
No wonder in one year, the company has built over 145 petrol
stations while pushing hard to mark it up to 300 before the
year runs out. It has also vowed never to rest until its fuel
stations hit 1,000.
The Chief Executive Officer of Global Fleet, Barrister Jimoh
Ibrahim, who initially had wanted to sell fuel under the brand
name of other marketers for a short time seems to have decided
to elongate this. He says for now, his Energy Destination
brand of filling stations should wait. Reason? He just wants
to continue to acquire stations and to operate under other
marketers’ brand name.
Introduction
My name is Jimoh Ibrahim. I attended Community Grammar School,
Igbotako in Ondo State. After this, I went to the University
of Ife and then proceeded to Harvard Law School. At Ife, I
obtained two degrees, Bachelors of Law and Masters in Public
Administration. At the Harvard University I had a degree in
Economic Tax Law, a masters degree. And I worked as a consultant
to the IMF (International Monetary Fund) on tax reforms in
Croatia and Etonia. That was a one-year consultancy. I was
called to bar as solicitor of the Supreme Court in 1991.
I grew up in a village; a place called Igbotako in Ondo State.
I did my primary and secondary school in the village and later
went to Federal School of Arts and Science, Aba. I was born
into a polygamous family. My father had seven wives and several
children. I have published some books.
My dream as a kid
My dream then was to become famous, to become a successful
person, not to suffer, to leave poverty. That was my dream
as a kid. It was also my dream to be one of the celebrated
people in the world, to become renowned among my colleagues
and to become somebody that will contribute to mankind. I
wanted to leave a legacy of a first class attendance to human
development and to contribute my own quota to my fatherland,
the Federal Republic of Nigeria. I also want to make my home
state proud, that is Ondo State.
I also had a dream to make my town a unique place, to see
that even in the village, kings can be developed, millionaires
are developed, billionaires developed, happy people developed
and handsome people produced from the village.
My political life
Yes, I participated in social service delivery. I tried to
go into politics to make my people happy. To prove that the
youths can also come out to participate in democratic governance.
Then, I took my opponents by surprise. They were panicking;
they were running helter skelter because I was a little boy
of 35 years old then. And the youths were very proud that
one of their colleagues, one of their brothers, one of their
friends, Barrister Jimoh Ibrahim, was challenging the existing
structure where the octogenarians were the only ones that
have access to governance or people whose fathers have been
involved in politics before or those who already have big
names and all that. So, people were happy and I was happy
too that I was able to go into the system.
Leaving politics for business
The world is dynamic. The only thing that is permanent in
this world is change and that is where I belong. I left politics
to go into business, I can leave here to go into journalism,
and I can leave petroleum and go into property, that is the
dynamic nature of the world.
The energy sector
That is where the money is. We are talking about leaving poverty.
So, you don’t expect me to be doing Kabu-Kabu.How long
will I collect the conductor’s money to run into millions?
So, I have to go into where there is juice. That is where
I can make money to make other people happy. That is where
I can employ more people and that is where I can contribute
to the economy. That is why I am in the energy sector.
Capital layout
There is nothing capital intensive about it. All you need
to do is to be disciplined with fund. Last year, I rejected
over N17 billion loans offered to me by the various financial
institutions. I threw back all of them because they were not
necessary for me. You only take what is necessary. So, you
have to be disciplined and prudent with funds. You don’t
just go around to take whatever they give to you. We are selling
petrol, what do I need N17 billion for? What we need is to
find out about those people who are doing business with us.
Are they creditworthy? Are they people who can take advantage
of your business when it is ruined? Some of these people will
just be coming to you because they see your potentials, but
when you have problem, they will not assist you. So, we have
to look at these things. You can’t take something you
cannot eat.
Challenges
There is no challenge you cannot overcome by hardwork. One
of the things I did when we started newly was, I used to sleep
only four hours in a day, but now I sleep for more hours,
sometimes up to eight hours. But in the first one year, I
used to sleep for fewer hours, sometimes; I sleep in the car
in the little time I had. Thanks to the hold-ups in Lagos
that can allow you to do the sleeping on the road. Otherwise,
there was no other time for me to sleep because of continuous
work.
Like I said, it is not every money that comes to you that
you must collect. You have to build up your integrity and
reputation. With good integrity, you will always be at the
top. So, I have built integrity and good name. When they published
the names of people owing the NNPC, did you see my name there?
So, it is integrity. I am not saying that people who owe are
not supposed to owe, but I’ m saying that you also have
to build your business on integrity. So, integrity is what
we are known for here.
Our outlets with other marketers’ brand
The deal is that we distribute or share the assumed profit
that the NNPC allows. The NNPC normally allows us N4. So,
you take N2 and I take N2. The marketers we are associating
with have good brands. AP has a fantastic brand, Oando has
good name and brand and Total has a good brand too. So, we
can only share the profits. I don’t need to own a brand,
but I need to own outlets so that if Total wakes up one morning
and wants to sell its petrol, it will need Jimoh to talk to
because I have the outlets. And if AP wakes up and wants to
decongest its tanks, it needs Jimoh. I don’t need to
be like AP, I don’t need to be like Oando, I am just
an owner of outlets, I have the control. So, if I say I’m
not buying am not buying; if am buying, am buying… It
is better for me to own outlets under the major marketers’
name and don’t even be a major marketer. I have chosen
where I want to participate and I am participating effectively.
If you want to be a vendor do you need to become a reporter,
a printer and a publisher? It is not going to be possible!
I am not thinking of branding for myself now. I am now thinking
of branding for the other marketers like AP and others. I
need 1,000 outlets and for me to refurbish these outlets and
put them to our standard, it will take maybe another five
years. But the management will have to decide on this. However,
my thinking as the CEO of the company is that we are not branding
for now. We need to develop our outlets first. If for anything,
I can decide not to brand forever.
In America, you participate where you want to participate.
It is not the profit that matters. The issue is that I have
decided to participate in an aspect where nobody has gone
into in this country. I want to own the highest number of
outlets in Nigeria. In five years, when I must have acquired
1,000 outlets, if anybody wants to sell products he will call
me. They can do their own thing, but what I will tell you
is that the owner of the outlets is the owner of the business.
For now, I have about 145 outlets. The last time you came
here, it was 30-something. We will be doing 300 outlets before
the year runs out and by New Year by the grace of God, we
hope to move this to 500 and we will continue from there until
we reach 1,000 outlets.
But remember our method is different. We are acquiring, we
don’t lease, and we have to buy outrightly. So, it is
better for the major marketers not to busy themselves talking
about developing outlets. They would as well sell their products
to the owner of the outlets so that the deregulation policy
of the Federal Government will be efective.
Somebody is importing, another person is selling and the man
who is importing is doing so continuously and the man who
is selling is selling continuously; thus it reduces the burden.
But the problem is that everybody wants to import, wants to
sell, wants to have depot, wants to have outlets and this
makes the whole thing slow.
My depot
If for instance, AP is importing, they can put directly in
my tanks. And if AP is bringing in 10,000 metric tons, they
can give me 5,000 metric tons, which I will take to their
outlets. So, we can do a bulk purchase thing from anybody
that is importing, so that we can be distributing. We have
about 80 trucks now and instead of taking them to the depot
to load and waste time, why not bring the thing and load at
our own depot to save time.
Refinery
Anybody who is telling you that he is doing a private refinery
is telling you lies. The person may be just trying to make
news. A refinery will cost twelfth quarter of a billion dollars.
Who can afford that now? But I know some people have integrity
and can raise the money from abroad, but the problem about
it is that the refinery must be very close to the water so
that you can backload all the refined products to the sea
and to also forward your crude. I don’t know whether
they have that land where they want to build it. But let’s
be watching if it will work. If the NNPC cannot run a refinery,
is it a private individual that can do it better? So, with
all of them in the NNPC, does it mean they don’t know
what they are doing?
All the Kupolokuns of this world, they tell you that the refinery
is the problem. Do you think they don’t know what they
are doing? It is you sitting in Lagos that can run a refinery.
The NNPC is bad, the NNPC is bad, does that mean that everybody
that passed through the NNPC is bad? There must be a fundamental
problem, which is a structural problem that must first of
all be addressed before anybody can come to say I want to
do a refinery. The NNPC is not stupid. If they can do it,
they will do it.
Afterall, they will bring in products and give to us. They
built their depots. Don’t you see the NNPC depots all
over the country? They run them, but they are telling you
that the problem they have right now is these refineries.
Listen to them and find out the problems they are talking
about. The are experts and they know better. This is better
than for somebody to say my refinery will be on board next
month. It is very good to make it a cover story, Olu is building
a refinery next week, but it doesn’t work easily like
that. Let all of us find out from the NNPC why the refineries
are not working. I think Kupolokun would be of tremendous
assistance to the nation if we listen to him better. Given
free hands, he will tell us why the refineries are not working
and how to make them work.
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