Mrs. Nkechi Obi, Managing Director, Techno Oil Limited speaks on the activities of the company in the downstream sector of the Nigeria Oil and Gas Industry.
1. WHAT DOES TECHNO OIL DO AND ITS AREA OF OPERATION?:
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 the storage, handling and marketing of refined petroleum products and providing high quality value added services to the industrial sectors of the Nigeria economy such as marine, construction, aviation, automotive, energy and other highly specialized sectors.
We market all range of lubricant 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 favorably in the downstream sector.
2.WHAT CHALLENGES HAVE YOU ENCOUNTERED 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 envision 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 till today, 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 licenses obtained, but PPMC was not forth coming with the issuance of the bulk purchase license for us to lift petroleum products from the refinery, Depot or offshore.
The Obasanjo government canvassed for 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 going atrophy, keep our senior and highly experienced staff, because they have a family to maintain. When by divine intervention we got our license from PPMC, I made certain resolution to find balance between myself and my family, improve my relationship with God, friends, family as well as our staff who stood by us during those difficult years. To motivate and improve our staff welfare especially in the area of providing basic need such as adequate Health plan, housing and cars.
Our senior staff stood by us, competition was constantly knocking on their door 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 staff is OND diploma. We send our staff 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.” SO HOW DO YOU KEEP THEM IF NOT BY CONTINOUS TRAINING AND MOTIVATION. That has been our culture and it has paid off handsomely.
3. WHAT IS YOUR IMPRESSION OF THE OBSANJO DEREGULATION/LIBERIZATION/PRIVATIZATON
OF THE DOWNSTREAM SECTOR OF THE ECONOMY?
The Obasanjo government canvassed for 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% 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 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 crises. Nigeria has done well for the major marketers, through yearly repatriation of huge dividend to their home country, 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 lot of them have spent more than 100 years in the downstream sector of the oil and gas industry without any noticeable technology transfer to Nigerian after two decade of business in Nigeria.
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 Government.
4.I UNDERSTAND YOU HAVE JUST UPGRADED YOUR LUBRICANTS BLENDING PLANT. CAN YOU THROW MORE LIGHT ON WHAT EXACTLY YOU HAVE DONE IN THIS REGARD?
Our lubricant blending plant was constructed 7 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 =N=300million.
An automatic 4-litre filling line, a new blending kettle, new pumps and meters, conveyor systems, drum handling and stocking equipments and various state-of –the –art Laboratory equipments
WHAT DOES YOUR COMPANY EXPECT FROM THE PLANNED LUBRICANT LAUNCH?
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. Four of our flagship product will be launched into the Nigeria retail market namely Ultra XP, Super XL, Avance X30140 and HD 40. These product 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.
Our lubricant, 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 cannot be adulterated as our packages are unique and have tamper- proof seals.
5.HOW DOES YOUR COMPANY COPE WITH THE COST OF FINANCING THE BUSINESS?
As is usual with success stories, the banks are presently falling over themselves to provide us with credit facilities for trading and project financing.
For us it was a humble beginning, It was difficult when we started, no bank was ready to grant us credit without collateral. Little start-up funds received were from friends and relation was all we had. It was only FSB BANK after a brief operation that trusted and believed in us in 1997. They financed all our imports from ESSO. Hence they remain our foremost banker after 10 years. Our success story cannot be mentioned without FSB BANK.
Currently, we are of course happy that we have ready access to funds to finance our business which have made our expansion plans realizable and our rapid growth possible thanks to the Soludo’s consolidation drive. It’s much easier to borrow from banks unlike what happens in the pre- consolidation era.
6. DOES YOUR COMPANY PLAN TO GO PUBLIC ANYTIME SOON?
We have severally being approached on this issue, but we will follow the growth path by realizing 80% of our vision of being a foremost integrated oil company with unparalleled service delivery. Then we can open our doors to the public.
7. HOW DO YOU FEEL BEING A FEMALE C.E.O. WHAT ARE THE CHALLENGES?
I am an Economist by profession 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.
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I think one thing people notice about me is that I’m a 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 in 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. 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 they are today. In management, we call it ”return on experience.” I am only practicing 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 imbedded 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 practicing 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 shear 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 in your lap, grab them and work hard. There is no easy way and I am not even one to look for an easy road.
8. HOW DO YOU RESPOND TO CHALLENGES FROM THE MAJOR PLAYERS IN THE COUNTRY IN A SATURATED LUBRICANT MARKET?
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% 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 in 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 like ours.
Our lubricants exceeds 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 API standard and SAE thickness.
Our packaging is excellent with customized bottle and tamper proof sealing.
The lubricant market is saturated but with substandard products.
9. WHAT ARE YOUR 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 is 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 6 mega retail outlets (filing station) across the country.
We are aggressively looking beyond the Nigeria shores in our determined effort to grow the business. Consequently, we are about to export our engine oil brand- Ultra XP, HD 40 and Advance to the neighboring West Africa Markets.
To accommodate bulk import and take advantage of economy of scale presented by the concession granted by Government, for NLNG to set aside some percentage of LPG for local market, plans are at advanced stage to construct 5,000 MT LPG storage tank (Tank Farm) 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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