BY PETER EGWUATU & LAZARUS IBEABUCHI
The management of Red Star Plc has revealed that it plans to grow its turnover to N16 billion in five years from N5 billion it currently stands. Speaking during the management’s visit to Vanguard, Mr. Sule Umar Bichi, Managing Director of the company said their focus has also expanded from just being a courier business to a completely logistic service provider, adding that the advent of information technology has opened up more vista of opportunities than threat to their courier business.
What is your mode of operation?
We started in 1992 as a public company focusing on courier express service delivery. Over time, we have grown on the service we promise our customers. We became a household courier service provider having large market within a short period of time and competing with international companies that are there.
Red Star Company is wholly an indigenous company. We have had a lot of partnership with a lot of companies both locally and internationally. One of the most prominent is our association with Federal Express, Fedex, which is the biggest in global air freight delivery service with coverage of over 220 countries. With that capacity, Red Star has a good partnership to deliver goods and services to our local customers.
When were you listed on the Nigerian Stock Exchange?
Red Star Express became a publicly quoted company in 2007 after growing our capital base. When we started in 1992, our turnover was less than N40 million in the first year. This year, we have declared a turnover of over N5 billion. This shows how far we have grown. Also, out of over 250 courier services in Nigeria, only two are listed on the Exchange. We are one of the two.
Our focus has also expanded from just being a courier business to a completely logistic service provider. The logistic include the courier express service, logistic heavyweight trucking, warehousing and inventory management, outsource support services which has a lot of products, among others. Our growth potentials are very huge on these expanded areas. We expect our customers to enjoy more services as we intend to bring out products under each of these services.
What has been the impact of technology on your business?
The advent of technology has been a plus and opening another vista of opportunity to our business. Information Technology has given us the opportunity to e-commerce. Contrary to the idea that email, fax and text messages will reduce the taking of letters to courier services, important documents like cheques and legal documents are still moving. Though the document sizes are reducing but the parcel sizes are increasing. Imagine someone ordering for laptop outside the country. The weight of laptop is bigger than that of document. So, the replacement is bigger than what is lost. In addition, the need of the consumer is ever changing. Now, there is need for the customer to know where the shipment of his product is. So, IT is assisting us to tell the customer where his shipment is. This is done through tracking which the customer has the direct access to; thereby enabling us to serve the customer better.
What has been the company’s contribution to the society?
We want to celebrate our 20th anniversary in October. In respect to that, we have begun a lot of activities especially from the corporate social responsibility angle which we have been doing from inception. We have a foundation called Red Star Foundation where the company approves the appropriation of 0.5 per cent of profit yearly as well as other donations from staff. The foundation carries out scholarship for indigent students within the area where we operate. These include Oshodi-Isolo in Lagos, Port Harcourt and Kano. We give scholarships to senior secondary level which covers the three years tuition.
Where do you intend to be in the next five years?
We have a plan that in the next five year, we won’t be seen as only a courier service company, but a fully logistic company. We hope to achieve a turnover of N16 billion. To do that, it means we have to create value to that level. We are going to leverage on our strength to grow the economy and remain socially responsible. In trying to determine our market share, we have strength in playing in the domestic market because we have the biggest strength in terms of network. On the international scene, we are keyed into Fedex which has more than 220 branches worldwide.