Following successfully conclusion of a bond issuance programme where the company raised N7 billion to finance its operation, C & I Leasing Plc just acquired two tugboats to improve service delivery to customers in the maritime sector. In this interview, the Managing Director/Chief Executive Officer of the company, Mr. Andrew Otike-Odibi spoke on the company’s growth trajectory, the impact of Cabotage Act on maritime industry, as well as the challenges among others. Excerpts:
By Nkiruka Nnorom
HOW will you rate the Nigerian maritime sector. What can you say about the progressive at least in the last 10 years?
The maritime industry in Nigeria has shown positive developments within the last 10 years. The advent of the Carbotage and Nigerian Content Acts have created significant opportunities in the sector. However, there are still several challenges bordering on financial capacity and skill levels required to manage the vessels in line with world class standards. I am aware that the ship owner’s association is engaging different stakeholders with a view to addressing these issues amongst others.
What would you say are the challenges in the sector and how can they be addressed for the benefit of all stakeholders?
Like I mentioned before, the key challenges are funding structure, which takes into consideration the high value of marine assets and the market peculiarities of the business; building intellectual capacity to operate and manage the vessels. I believe contributions being made to the Cabotage Vessel Financing Fund (CVFF), which is managed by Nigerian Maritime Administration and Safety Agency, NIMASA, and Nigerian Content Intervention Fund (NCDF), managed by the Nigerian Content Development and Monitoring Board (NCDMB) will act as good starting points to providing lasting solutions to the problems. The government will need to focus on developing the sector as it has the potential for sustained economic growth.
You mentioned the contribution of the Cabotage Law to the growth of the maritime sector, are indigenous companies really benefiting from it?
The benefits are trickling in. It has been able to create more opportunities for local operators by setting barriers for foreign operators in Nigeria. It still needs to address the issue of funding vessel acquisitions and capacity development in the sector.
C & I Leasing Plc started as just a finance leasing firm but has grown into a business services conglomerate operating in several sectors of the economy. How would you describe your journey so far?
We can say it has been an interesting adventure since 1990 with several high points and an equal amount of learning. We started with the finance leasing business and while doing that, we expanded into the operating lease sector, providing vehicles to a number of corporate clients. Then, we took advantage of the car rental opportunity with the signing up for the Hertz rental franchise. This further gave rise to the personnel outsourcing business through provision of drivers to several clients initially but has now grown to providing different categories of personnel, including specialised oil and gas engineers. We currently have over 5,000 staff working across different companies. We have embraced opportunities with calculated courage based on the perceived or emerging market demands in the business service/support space and we continue to succeed as we follow through to ensure we deliver value for our clients.
How are you able to manage all different business segments successfully?
Structure is critical for service delivery, scaling and growth in business. Each segment is given its unique structure and equipped accordingly with the relevant resources then empowered and supported to grow clientele and returns.
The maritime sector is highly competitive, what has been your sustaining power?
We have over the years been developing capacity to manage our marine assets. This is in line with our philosophy of always keeping the client’s expectations before us. This does not end with just buying the boats but having the right minds work together to ensure a proper service is delivered. This has been our sustaining power. A lot of people believe the margins in the business are fantastic. If the business is run properly, one will realise that the margins are slim as a good support structure has to be put in place to run a sustainable marine business.
As a quoted company, how has the company been able to meet shareholders’ and regulators’ expectations?
It’s been a journey since 1997 when we became a quoted company and I can’t say we haven’t made mistakes along the way. Being a quoted company comes with its own set of rules and regulations and we have made some mistakes along the way but, in recent years, we have greatly improved and are better structured to meet up with the demands and expectations from our regulators. As for our shareholders, we continue to work on improving the value of their investments through increase in share value and regular dividend payments.
What are you doing to improve on returns to your shareholders and render quality services to customers in the years to come?
Over the last 27 years, we have diversified the revenue base of the business to create a balance in its earnings, therefore preventing business concentration in any area. This philosophy causes us to continually seek profitable opportunities for the business, which invariably leads to an increase in profitability and improved returns to shareholders. In addition, we have kept our focus on value creation for our clients across our different business units. This has resulted in a high client retention which has also translated into steady revenue stream for the business.
You raised a bond recently, how are you expending the proceeds and how will this financial injection impact your operations?
We invested the funds in further expansion of our business as we had committed to do, for example, we concluded the acquisition of a 27.5 percent minority stake in C &I Petrotech Marine Ltd- a Joint Venture company with six vessels presently deployed to a long-term contract with Shell Petroleum Development Company of Nigeria (SPDC). We invested in two new Tug Boats in joint venture with SIFAX Marine Ltd which are to resume in a 10 year contract with Nigerian Liquefied Natural Gas (NLNG) by fourth quarter (Q4) of 2018. We also invested in our fleet management and car rental business acquiring brand new luxury cars to meet the growing demands from our clients. In addition, we restructured our liabilities by replacing more expensive debts with the bond proceeds.
Can you tell us more about the new vessels you acquired?
We are excited to announce the safe and timely arrival of two brand new 2018 ‘ASD 2913 Tugboats’ named ‘MV Chidiebube’ and ‘MV Folashade’
They are both owned by C & I Leasing Plc in Joint Venture agreement with SIFAX Marine Limited and are to be deployed immediately for a long term contract with NLNG.
Where do you see C & I Leasing in next five years?
I see a major player in the leasing service sub sector, land fleet management, personnel outsourcing and oil field support marine vessels in the West African sub-region. I also see a company ranked amongst one of the most profitable businesses in Nigeria with a collection of highly motivated investors.