Oil sector deregulation a big boost
to indigenous firms – Nkechi Obi, Managing
Director, Techno Oil
By LOUIS IBA
Monday, February 4, 2008
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•Nkechi
Obi
Photo: Sun News Publishing |
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Mrs. Nkechi Obi, Managing Director of Techno Oil Limited,
is one of the few women who believes that gender plays no
big role when it comes to actualizing either a personal dream
or vision or that of any corporate organisation.
Obi, had always nursed the idea or dream of being on top –
the top of her career - and as a woman in a sector largely
dominated by men she knew she had to work extra hard to make
enough impact that would take her to the height of her career.
When asked by Daily Sun how she felt piloting the affairs
of an oil company as a female CEO, Obi beamed with a smile
that reflected her fulfillment and said she worked hard enough
to gain the trust of the board to be the boss.
“I worked my way up; there was no easy answer for me.
“I worked for it and that is why I have confidence,”
she said.
And for those who believe that the road to the top is devoid
of challenges, she added this admonition: “When opportunities
are put in your lap, grab them and work hard so that all will
see and appreciate you. There is no easy way to the top and
I am not even one to look for an easy road.”
An alumnus of Harvard Business School and Lagos Business School,
Obi is a seasoned economist with great managerial skills.
She is equally a core professional in strategy and business
development and her experience in the oil and gas spans more
than 15 years with the bulk of the time spent at Mobil Oil
Nigeria Plc before joining Techno Oil Limited.
Obi, in the interview, spoke a lot about the challenges of
doing business in Nigeria and the impact of the deregulation
of the downstream sector of the oil industry.
She said deregulation had opened up the industry for indigenous
players to play an active part. She, however, wants the multinationals
to focus more on the establishments of refineries in Nigeria.
Excerpts:
Background
Techno Oil, an indigenous Oil Company, in the downstream sector
started its operation in 1997 by the acquisition of a Franchise
from ESSO to market ESSO branded lubricants. Over the years,
the company has established itself as a major indigenous oil
marketing company through the efficient deployment of its
human and material resources as well as capital investment
in various businesses and the resultant growth in market share
and profitability.
The company’s principal activities include storage,
handling and marketing of refined petroleum products and providing
high quality value added services to the industrial sectors
of the Nigerian economy such as marine, construction, aviation,
automotive, energy and other highly specialized sectors.
We market all range of lubricants and chemicals in addition
to the supply of white products such as diesel(AGO), kerosene(DPK),
petrol (PMS) and cooking gas(LPG).
In our quest to become an Integrated Oil Company, we constructed
a fuel storage depot (Tank farm), an Ultra Modern lubricant
blending plant, an automated Liquefied Petroleum Gas Bottling
Plant as well as State- of -the art analytical laboratory
with modern equipment for quality assurance test for all our
petroleum products.
In our journey so far, our greatest strength has undoubtedly
been our highly trained and experienced staff. Their commitments
to excellence and quality service have put us ahead at all
times.
Our business unit has shown a significant growth during a
short period of time. Today, we are pace setters in the efficient
delivery of petroleum products to discerning customers.
We have sustained an absolute commitment to running our business
to the highest standard of ethics and corporate governance.
Our workers are of topmost quality, well trained and motivated
with dedication, loyalty and productivity.
We have been able to delight our customers and enrich our
shareholders over the years. We have actually done well in
terms of our growth and strategies and other important determinants
needed to compete favourably in the downstream sector.
Doing business in Nigeria
First and foremost, Techno Oil started from a humble beginning,
funds were not readily available for the type of business
we envisioned except from little funds gathered from relations.
After a while, FSB Bank believed in us by granting us initial
overdraft without collateral.
They believed in us and we did not let them down, which is
why after 10 years, they still remain our foremost banker,
they are now known as Fidelity Bank.
Our second most daring challenge was when we deployed all
our capital to construct the fuel depot (Tankfarm), thereby
leading to the almost collapse of our other business concerns
such as lubricant and liquefied petroleum gas. The fuel depot
was constructed on record time with all necessary regulatory
licences obtained, but PPMC was not forth coming with the
issuance of the bulk purchase licence for us to lift petroleum
products from the refinery, depot or offshore.
The Obasanjo government canvassed deregulation of the downstream
sector, that means you can source your products from imports,
but the economics was not right for us to source product from
import, because our competitors were sourcing locally at government
subsidized rate.
Our major challenge was our inability to pay salaries, maintain
equipment from atrophy, keep our senior and highly experienced
staff, because they have a family to maintain.
When, by divine intervention, we got our licence from PPMC,
I made certain resolution to find balance between myself and
my family, improve on my relationship with God, friends, family
as well as our staff, who stood by us during those difficult
years. To motivate and improve on our staff welfare especially
in the area of providing basic needs such as adequate health
plan, housing and cars.
Our senior staffers stood by us, competition was constantly
knocking on their doors yet they refused. You may not know,
among the indigenous operators, we provide the best training
and development. Our minimum entry level to be a staffer is
Ordinary National diploma. We send our workers to either Lagos
Business School or Phillips Consulting for Management and
Leadership Training and South Africa, Europe or USA for technical
training.
I am a product of good training and I have always believed
that those who build great companies understand that the ultimate
throttle on growth for any great company is not markets, technology,
competition or products. It is one thing above others, the
ability to get and keep enough of the right people.
Being a female CEO
I am an Economist with more than 15 years experience in the
oil and gas industry. I had a distinguished career in Mobil
Oil Nigeria Plc before venturing into private practice.
I think one thing people notice about me is that I am very
shrewd, humble, fair and very hardworking. I really think
that God is with me and my family. I am eternally grateful
to God because I think there is a hand guiding me to be straight
forward and transparent. This is not that Nkechi Obi woke
up and inherited a business. Remember, that I spent almost
10 years at Mobil Oil Nig Plc through the rank and file.
Day after day, doing every type of job that a young economist,
a middle level management staff can handle. I gained a lot
of experience while working with Mobil, a multinational, a
world class company with structures and procedures.
Whatever I am today or Techno Oil is today, I give Mobil Oil
the credit because without their training, Techno Oil would
not be where it is today. In management, we call it return
on experience. I am only practising what I learnt from Mobil.
My recommendation and advice to the youths is to learn a trade
or get employed first before venturing into business. The
rate of failure is almost zero.
I also give credit to Techno Oil Chairman, Dr. John C. Nnadi,
a retired Executive Marketing Director of Mobil oil Nigeria
Plc. He inculcated good working habits and competence in me.
He provided me with adequate training and made me what I am
today, for without him, I would have left Mobil half baked.
He is still my mentor as well as the chairman of this great
aspiring company.
The experience I gained is immeasurable, so whatever I am
doing is practising what I have learned through being an indigenous
oil and gas entrepreneur or local content drive.
The achievement of Techno Oil in the downstream operation
of the oil and gas sector was not an inheritance but by sheer
hard work and humility. I worked my way up, so there was no
easy answer for me.
I worked for it and that is why I have confidence. When opportunities
are put on your lap, grab them and work hard. There is no
easy way and I am not even one to look for an easy road.
Obasanjo’s deregulation policy
The Obasanjo’s government canvassed full deregulation
of the downstream sector but in practical terms, we ended
up having partial deregulation. The indigenous operators have
benefited immensely from this policy, hence it should be encouraged
by successive governments.
Over the years, the majors controlled about 95 per cent of
the business, but with this policy, indigenous operators like
us are able to contribute their quota. Our growth and survival
strategy are all dependent on this policy.
It is now common knowledge that business concerns are better
managed by private entities. There is need to privatize the
refineries and distribution network for better efficiency
and management. That way, fuels will always be available across
the country with the best possible competitive price. It will
also relieve government of continuous subsidy, so that funds
can be channeled to other pressing social needs.
My honest advice to the major multinational companies in the
downstream sector is that they should be at the forefront
in the construction and ownership of new refineries irrespective
of pipeline vandalisation and Niger Delta crisis. Nigeria
has done well for the major marketers, through yearly repatriation
of huge dividend to their home countries, and the only pay
back we need from them is for them to construct a modern refinery
and operate it, instead of buying and selling.
A many of them have spent more than 100 years in the downstream
sector of the oil and gas industry without any noticeable
technology transfer to Nigerians.
We, the indigenous operators, can handle the present level
of operations in the downstream sector. Hence, we appeal to
the majors to move a step further. The industry has to be
dynamic for an efficient operation. We cannot continue to
be dependent on NNPC. Such dependency on government for supplies
of petroleum products is not obtainable in their home country
and as such should not be encouraged by the government.
Our lubricant business
Our lubricant blending plant was constructed seven years ago
to blend premium industrial lubricant.
We have only just upgraded the plant by installing modern
equipment to allow for a more efficient operation.
We installed the following equipment valued N300million.
An automatic 4-litre filling line, a new blending kettle,
new pumps and meters, conveyor systems, drum handling and
stocking equipment and various state-of-the-art laboratory
equipment.
We think we have done well in the marketing of premium industrial
lubricant. The testimony from our industrial customers led
us to consolidate our achievement by taking our service to
the retail market. Unlike our previous product, our new product
is a consumer product, hence it requires a lot of awareness
and marketing support.
Our motor oil need to be recognized, noticed and appreciated
for its worth across the country. This is part of the reason
for the formal launch. We want to make an impact in the passenger
car motor oil sector. Four of our flagship products will be
launched into the Nigerian retail market namely: Ultra XP,
Super XL, Avance X30140 and HD 40. These products are proudly
made in Nigeria, blended with the finest base oil and the
world best additive Lubrizol, Ifineum and Afton.
These products are already making waves in Nigeria and we
have started exporting them to other West African sub-region
countries.
Our lubricants have received international acclaim, including
certification. I feel proud to announce that our products
have gained international recognition. We have commendation
from visiting marine vessels that have sailed internationally,
using Techno oil branded lubricants.
This segment of the market, despite being saturated with low
quality road-side quality, we want to ensure customers get
value for their money with our high quality products. We will
continuously maintain our policy of offering the highest quality
lubricants to our customers at the right time and at the right
price. Our products can not be adulterated as our packages
are unique and have tamper- proof seals.
Challenges from multinationals
We are not new in the lubricant market. We have done well
in the premium industrial lubricant since 1997. What we did
recently was to upgrade our plant and install a 4-litre automated
packaging line in addition to modernising the entire plant.
The multinationals account for over 90 per cent of the lubricant
business in Nigeria, they have, over time, invested in retail
outlets, which form part of their distribution channel/network.
They have brand loyalty.
The indigenous brand like Techno Oil, have to contend with
all these to be able to compete. But then, the market is large
enough to accommodate new players. All we have done is to
identify a need and close the gap.
That I cannot reveal on the pages of newspaper. To ensure
that our quality can compete with any other brand in the world,
extensive research was done before we arrived at the formulation
suited for tropical cars. Our lubricants exceed all the standards
demanded by the engine manufacturers and in addition, Techno
Oil lubricants are blended to ensure a perfect mix with other
manufacturers branded oil without fear of loss of lubrication
effectiveness as long as they meet the international standards
and thickness.
Our packaging is excellent with customized bottle and tamper
proof sealing.
The lubricant market is saturated but with substandard products.
Future plans
As deregulation has inevitably raised the stake and increased
competition among majors as well as indigenous players, the
kudos is now for the fittest, the most pragmatic and innovative.
Formidable though these challenges, we at Techno Oil are equipped
with all the essential materials and human resources for driving
this transformation.
We understand the need for strong visual identity in a competitive
commercial environment and huge investment has been committed
to the construction of six mega retail outlets across the
country.
We are aggressively looking beyond the Nigerian shores in
our determined efforts to grow the business. Consequently,
we are about to export our engine oil to the neighboring West
Africa markets.
To accommodate bulk import and take advantage of economy of
scale presented by the concession granted by the government,
for NLNG to set aside some percentage of LPG for local market,
plans are at advanced stage to construct 5,000 metric tons
of liquefied petroleum gas (LPG) storage tank to expand our
market.
Massive capital investment will be committed to the expansion
of our storage tanks for fuel, chemicals and base Oil at the
Lagos free trade zone and Niger Delta region.
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