Finance

June 24, 2013

Why we quit acquisition of TNT – UPS boss

Condamine Jean-Francois,President,West Europe & Africa District, of United Parcel Service (UPS) Limited, the world’s largest package delivery company and one of the leading global providers of specialized transportation and logistics services was on a working visit to Nigeria he spoke with Princewill Ekwujuru on how UPS has helped to boost Small and Medium Size Enterprises, SMEs globally. He also spoke on the company’s commitment to Corporate Social Responsibility (CSR) in the communities it operates. Excerpts:

UPS is a global player in logistics services. what are the challenges facing your operations in Nigeria?

The nature of our business requires good infrastructure and where this is not in place, it becomes a major challenge, especially the absence of good roads in the cities and hinterlands. We do most of our deliveries in Nigeria through ground operations, therefore good roads and rail networks are vital.

Sometimes, rural areas are not easily accessible and, in such circumstances, operational costs are higher. We believe that the continued maintenance and improvement of infrastructure is always a worthwhile investment. As in all countries that we serve, we also see the importance of ensuring the smooth passage of goods through customs and we welcome all initiatives that streamline customs processes.

How has Government policies in Nigeria and other African countries affected your business overall?

UPS is a company that complies with all local laws and so, we always play by the rules of any country where we operate. As countries come up with economic growth strategies, UPS taps into them to achieve the company’s objectives in that operating environment. The policies of some countries might be more challenging than others but we make sure we comply and conduct our business successfully at the same time.

Recently, American Industrial bank advised UPS against its proposed acquisition of TNT. What were the reasons for UPS’ withdrawal from the acquisition bid?

In January, the European Commission (EC) issued a formal decision prohibiting the proposed acquisition of TNT Express. As a result of the prohibition by the EC, we announced the withdrawal of our offer for TNT Express.

As our CEO Scott Davis has said: “Looking ahead, our company focus will be on the continued execution of our growth strategy. While we viewed the acquisition as a compelling growth platform, our financial strength allows UPS to capture future opportunities.

You mentioned that UPS promotes SMEs across regions, how?

Small and medium-sized businesses are the backbone of economies all over the world, Nigeria inclusive. In an increasingly interconnected world, where everyone competes on a global scale, the logistics needs of SMEs are no different to those of large multinationals.

At UPS, we see that companies of all sizes achieve significant business success by partnering with us and taking advantage of our flexible, global shipping network to bring their goods to market. Whatever the size of our customers, the coordinated, efficient and speedy movement of goods, information and funds across borders is critical to them all, and that’s exactly what UPS offers.

It’s normal for small businesses to face constant financial challenges with little room for error, and UPS also offer financial services. UPS’s products and services help customers improve their supply chain, protect their goods and accelerate payment, leading to an enhanced cash flow, and we expand overseas sales by extending credit to prospective buyers in emerging markets.

What are UPS’ business projections and investment opportunities in Africa in 2013, especially Nigeria?

We have high projections and expectations in Africa. Africa is home to many emerging markets, attracting international interest and investment, while more and more companies are looking to transact business in the region.

UPS’s activities in Africa help to boost growth, and this leads to job creation in the region: In the end, we hope it boils down to improving the living standard of the people in the region.

We will do a lot of service delivery and business enhancement this year. Currently, UPS has a physical presence in South Africa and Nigeria and we work through authorised service contractors in other Sub-Saharan countries.

What is your $2.2 million CSR environmental grant focusing on?

Since its establishment in 1907, UPS has built a strong legacy of supporting the communities it serves. The company’s commitment is evident during its annual global volunteer month, which is every October.

The year 2012 marked the 10th anniversary of the event, where we encouraged our 400,000 employees to pledge at least 195,000 volunteer hours in making their communities environmentally sustainable. To achieve this, UPS awarded $2.2 million in grants to support a variety of environmentally-focused organisations.

This is done through The UPS Foundation, which leads corporate citizenship and philanthropic programs for the company. During the 2012 global volunteer month campaign, we encouraged our employees to share their personal volunteer experience through Twitter and Facebook to aid in raising awareness of the importance of hands-on community engagement.

Whether the activity is tree planting, teaching safe driving skills or volunteering to help a community affected by disaster, The UPS Foundation is committed to empowering people to help make the world a sustainable community for all. Between January and October 2012, The UPS Foundation also contributed almost $700,000 to 38 community-based environmental programmes around the globe, which also are supported by locally-based UPS employees.

Last year, our staff participated in planting trees with Reforesta, a nonprofit environmental organisation in Madrid, Spain. In the United States, we also partnered with the Miami Dade County Parks and Recreation department to plant trees in the community’s recreational areas.

Other examples include Carlisle, United Kingdom, where we helped with landscaping the garden at Eden Valley Hospice. UPSers also joined in creating outdoor play areas at the Protea Child Care Centre in Port Elizabeth, South Africa and volunteered with the Wildlife Park, in Jos, Nigeria to assist with animal care and conservation, as well as cleaning up outdoor areas in the Gbagada neighbourhood of Lagos. We have also in the recent past supported the conservation of primates in Cross River State and Elephants in Osun State.

UPS Nigeria awarded over $70,200 to various charities in 2012. These included Ojuwoye Special Community School, Great Faith Orphanage, Pain and Pleasure Band, Volunteer Corps, Resource Sharing Network and the Foundation for Skills Development.

The UPS Foundation has set a target to plant, at least a million trees worldwide, commencing with tree-planting initiatives in Nigeria, China, Canada, Haiti, the Netherlands, Norway, Russia, Uganda and the U.S. by the end of 2013.

What informed your decision to wade into forest conservation?

At UPS, we believe that we grow not only by investing in our business, but also in our people and our communities. Throughout our long history, we have evolved to meet the changing needs of communities across the globe. We centre our community investment strategy around four pillars aligned with our corporate values and business code of conduct: diversity, community safety, environment and volunteerism.

In the last seven years, UPS Nigeria has volunteered over 2,386 hours, partnering with charities like CERCOPAN to conserve Nigeria’s primates through sustainable rainforest conservation and the Omo-Shasha –Oluwa Forest Elephant Initiative, for the protection of forest elephants in South West Nigeria.

By living and working in the communities we serve, our employees are in touch with the needs and issues in their communities. We take our responsibility of being a good corporate citizen to heart.