Wednesday, August 10, 2022
HAULAGELOGISTICSTRANSPORTATION

‘Most People in Haulage Business Lack Integrity’- GPC Boss, Okonji

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Elvis Okonji is the Chief Executive Officer, GPC Logistics and Energy Nigeria Limited, one of the top haulage companies in Nigeria. The company clock 10 years in its operation recently. Okonji took Haulage & Logistics magazine through the 10 years journey of the company till date. Excerpt

Tell us briefly about yourself

As you already know, my name is Elvis okonji. I was in the banking sector for about 10 years. I left banking sector in 2010 to join GPC as the CEO. So far, we have been able to push the company from where it was in 2010 to where it is now.

Why do you decide to quit the banking sector considered to be the most lucrative, next to the oil sector to haulage sector?

Why I was in the banking sector, I was a high flyer person. In nine years, I rose from a Management Trainee to senior manager. At my 11th year, I had to leave and the reason was because I saw that I have something in me that I can do for myself, not just being a banker, but being an entrepreneur. I remember I went for a program in Lagos Business School and while I was in the program, we did a lot of leadership and management courses. From that program,I saw that I don’thave to be in the banking industry but to be on my own. I was also sent to United Kingdom to do a program in leadership at Canfield University. While I was in that program,I saw a lot of opportunities on what I can do for myself and not just for the banking industry, to build an empire formyself. In the program, we did a lot of simulations on how some companies started and how they get to where they were, so I saw that trait in me. Then, I could remember I was handling a project in the bank that involved importation of some commodities. But one challenge we had was that, we were not easily able to get trucks to move those commodities from the port and I saw middlemen making a lot of money from us while trying to help us to look for trucks. The middlemen don’t have trucks but they look for trucks and they put their margin. From my there,I took my time to do some case studies and find out that many of the people in the industry are not educated, they were not graduate, but they were making so much money and I lookat  myself, a graduate from the university, I have been to Lagos Business School and also study abroad, I have handled many projects in the bank; so I felt this is what I can do and even do better. I also saw much opportunity in the sector; so I just decided to go into the sector. From there, I set up a team and we started GPC with five trucks. On November 15, 2010, we started operation fully with five trucks and we are here today.

But do you find it easy leaving bank without any fear?

While I was resigning at the bank, my friends were asking me why should I do that at my level, and that how many years have I worked, but I told them that I want to go and do something for myself. I made them to know that if I don’t do what I want to do now, I will still do it later in life after working for people for 20 or 30 years, so I asked them why can’t I start early and get all the mistakes, face all the challenges while I am still young and then keep running? I eventually took the risk. It was a high risk, but we thank God that the risk pays off for us, the good thing is that all of us that started the business together 10 years ago are still together till now. The team is still together till date, nobody has left. We are one family.

How have you been able to manage the business from just five trucks to almost a thousand or more, considering the numerous challenges in the industry?

When you are starting a business, you need to have a goal; where do you want to get to? Do you want to start a business and close within a very short time? Do you want to build an empire that will outlive you? These are what you need to ask yourself and provide answers. As for us, from the beginning, we were determined to set up and build an empire that will outlive us, that whatever the odd may be, we would overcome it. We were committed. We don’t joke with our integrity. Even when we took loan from the bank at 28% then, we pay every kobo. Everything that comes into the business, we plow it backintothe business. We keep growing it, building trust with our bankers, suppliers and everybody around us and that is because in the business world, if your integrity is in doubt, you are gone. At GPC, we are team, so the team keeps building trust.If we say yes, it is yes. If we say no, it is no, but of course I will not tell you that the tide has been easy.

Really?

 It hasn’t been easy. In 2010 for instance what was foreign exchange and in 2016 what was the exchange rate? In 2020, what is the exchange rate? We have gone through several devaluation of naira, but despite all that, we remain strong and committed because we want to remain committed, we knew where we were going. We have a goal that must be achieved.I must confess that the odds in the business are much. The people you are working with will want to outsmart you. Drivers will want to outsmart you; your officers will want to outsmart you. But what has enabled us to get to where we are today is all about integrity. It has been tough; you want to talk about the bad roads, the touting, talk about foreign exchange problem and many other challenges, but despite all that, we remain committed and that is where we are today, we are still pushing.

Do you measure your growth?

Yes, we measure our growth every year to know if we are there or not. We don’t joke with our corporate governance, because we realize that it is extremely important in every business. We make sure we put processes in place and the processes are well organised. We put different department in place that look at different department of the business. We keep simulating. About 70% of our fleet today are fully paid off, no loan. The only loan we run currently is for the 150 trucks we bought to work for one of the breweries last year. We have peace.

Capital is one of the challenges of the business, how did you get the capital to start the business when you started newly?

I told you something earlier about integrity; that is what helped us. I am an ex banker, I understand finance. I studied finance in my first degree. In my masters, I specialized in marketing, couple with all the trainings I have gone through in the bank, I knew what to do. I understand financial models and how financing works. So if you go to the bank for a loan of N100 million payable within three years but you pay it off within two years or two and half years, if you go back for another loan; the bank will answer you and that is GPC for you. We take loan from China, Europe –The Export credit. Most of the time, we order for trucks and tie our banks here to give them guarantee. Sometimes, when foreign exchange condition is not good enough, we take naira from the banks, because the trust is there. The industry believes in us and trusted us.We have exhibited trust in the last 10years with our suppliers, bankers and international partners across the globe. So it is just for us to tell them what we need and they give to us, and that is why I keep saying that everything we do at GPC centred on trust and integrity. We don’t joke with integrity. We stand by our world and that is why we only work for the multinationals, so that if we have an obligation to meet, we won’t say our suppliers did not pay us and as a result, we can’t meet the bank obligation. If the multinationals said they will pay you on 15th, you don’t need to go and beg them again before they will pay you; by 15th you will see your money in your account.

I have met with an MD of a company that lamented that a multinational canceled the contract they sign, what is your reaction to that?

Also, we take time to review the contact we signed. We read it very wellbecause most of the failure in the haulage and logistics sector face today arise from the contract the companies signed. You don’t just signed contract. You need to get a team of lawyer to review it before signing. It is not a must that I must haul for you, it is better I sleep at home and have my peace than to put head in something that I know will dent my integrity.

You think that is why many haulage companies are running into trouble?

Managing Director GPC Logistics and Energy Nigeria Limited, Mr. Elvis Okonji

Yes, that is why you see many logistics companies falling apart. Another important thing is that you must have a process and you must also have a system in place. Take for an instance, you have 20 trucks but you don’t have a trailer yard where the truck will park, how do you succeed? You can commit to have 20 trucks but you can’t commit to have yard, you will fail. Today, a Chinese truck, both front and back will cost about N35 million. If you multiply in by 20, that is N700 million. Now you committed N700 million to buy 20 brand new Chinese truck, what will it cost you to go to the outskirt of the state to acquire a land and make sure you have mechanic, workshop, spray printer and have effective process that will look at all these things, because at the end of the day, the cost that you are trying to dodge will kill your business. From day one that we started this business,we have started acquiring land until we were able to build a befitting worldclass yard for our business. You can’t see our trucksparking anyhow along the road. Most Haulage operators contribute to their problems.

How?

When some truckers want to take loan, a truck will cost N5 but they will tell the bank it costs N10, by the time they buy the truck, N5 risk is already on ground. Everything must be surrounded by integrity. Process must be put in place. There must be corporate governance. Some people start a business and they want to reap the dividends immediately. It doesn’t work that way. If you want to build a business that will outlive you, you don’t take the dividends immediately but plow it back into the business, don’t have a divided attention. For instance, what do people know me for today? They know me for trucking business because, and that is what I do, that is what I know how to do better.

Do you have high blood pressure?

No. I don’t have any terminal ailment.

Then how do you manage your drivers’ pressure and challenges?

My drivers are my best friends. I spent my first five years as CEO in the jungle, in the bush, trying to understand the drivers’ culture; who they are, what they do and how. So within that period, I was able to understand drivers’ behavior and they became my friend. Their problem is my problem. I don’t say because I am the CEO they can’t tell me their problems. They have unrestricted access to me. They call me regularly about their problem and when they call me, I listen to them and I know the action to take. In GPC, everybody is equal.

What do you mean by that?

We are all equal. There is respect for others. You don’t think because this man is a driver and you can talk tohim anyhow, that is the culture at GPC; the respect for individual must be there always. We use simple psychology on our drivers;we commend them, we encourage them, we appeal and beg them where necessary. I spend time with them. Sometimes, I travel to where they are, I come down to their level, mingle with them, sit with them and ask them how far; I speak their language. The day you feel you are a successful man is the day your failure starts; that is the day your downfall starts. Just keep working hard,believe in yourself, and keep giving yourself a milestone to cover. My drivers know that they are part owner of the business. As far as you work in GPC, you are part owner of the business.

What does that supposed to mean?

It part of our corporate governance, the process is in place. You have medical, you have life insurance, and you share profit.

Share profit?

Yes. Drivers share from the profit the company makes. We share profit twice in a year. In July they get their profit share and in December they also get. By December or latest January, everybody receive alert-share of profit, from cleaner to the last person. So when we are not meeting projection, everybody sees it, and we let everybody knows.

There have been cases of truck and cargo diversion and in some cases, drivers run away with truck, what is your reaction to the anomaly?

Well, that has never happened in GPC and it cannot happen. Of course in every family, there is always a bad egg. You keep managing some and you let some go immediately. We have up to 20 patrol vehicles.We recruit retire general as a consultant to us. He uses all his connections in the country patrolling and checking drivers attitude on the road, checking illegal load carriage; it’s costing us huge amount of money but we have to do it. We also don’t joke with safety in the business. Safety is very extreme tous. For an instance, we embark on ember month safety campaign to educate drivers on the peculiarity of the season. It is season where there is rushing, the road is busier, there is Harmattansuch that in some roads, by 6 or 7, the road is still dark or already dark, so drivers must take it easy,that doesn’t mean you can’t have some bad eggs among them, but you try to correct them, if you can’t correct them, you let them go.

Which of the challenges do consider the biggest that you have faced since you started the business?

There are so many challenges in the business. In 2016, foreign exchange just jumped overnight from 150 to about N400. It was a big shock and very challenging to us. Infact, we thought we would go down and leave the market.

And how did you manage to survive it?

We manage to survive it because, in 2015, we look at the company ratio of loan to asset, and after thorough analysis, we discovered that the asset ratio is higher than loan, so we started using our profit to acquire more trucks, by 2016, we already have about 100 trucks that we acquired between 2015 and 2016 and they were assets without loan. So with those assets, we were ableto weather the storm, and that was while I said you don’t just remove money from business but keep plow profit back into the business, buy more assets so that your loan to your asset is not high, so that if you have challenge, you will have free asset to generate money that you can use to tackle the  challenges.

There is no one voice or unity among all haulage operators in dry cargo in Nigeria, why?

GPC for instance, like I said eelier works for multinationals, we are not in the garage where you go to Iddo park and pick a load to Kano. There are operators in that category but we are not. So if we want to belong to association, it should be corporate transporters associations and we are very few in the industry, and that has prevented us from forming a very solid association and couple with the nature of the business that make you to be very busy always.

Where do you see GPC in the next five years?

We don’t do five years but 10 years plan. In the next 10 years, we are planning to build a billion dollar investment in this country so that by 2030, GPC will exceed a billion dollar. We have a rare to run in the next 10years.In the next 10 years, we are sure of becoming Public Liability Company (PLC). We are sure of going into the stock market, we have a lot of plans line up already and we are not going to rest until we achieve the goal. We are just starting, we are going to do more in the next 10years but our goal is to become a public company and that is when we would be happy that will have built an empire that everybody can earn dividends from, where our grand children can work even after we have left this work. Somebody built the multinationals in this country today. Today, we have Dangote PLC, we have Zenith bank PLC, we have BUA group PLC, where is the logistics PLC and how many are they? Even the ones that may have existed as PLC, where are they today? So we are planning to build a real logistics hub where people can reap dividends. We are not building an empire for Elvis Okonji, but for everybody tobe part of it. In the next 10 years, our plan is to build an excess of one billion dollar group of business in the sector

And that is really huge

Yes, it is. Logistics sector is massive. We are only doing dry cargo now. How about the export angle, how about the import angle, how about the wet cargo, they are many.

Where is the place of energy in the company name “GPC Energy and Logistics?

When we wanted to start the business, we planned to go into energy by hauling wet cargo but we discovered that there are a lot of discrepancies in that sector. And for us, we want to build a business based on integrity, that was why we decided to go into dry cargo, but now the government has tried to sanitise the sector and couple with the refineries coming in the country, we may go to that sector later. The green energy is also there for us to explore; above all, we are not going to rest until we get there.

If you have not gone into haulage and logistics business, which other business would you have done?

I would have been an importer and manufacturer and honestly, I still have the dream of becoming manufacturer.

Can you recommend haulage business to your closed friends, younger ones and your children?

I want to be a haulage operator if there is another world to come. And that is the truth. If we are still going to come back after leaving this world, I want to be a haulage transporter.

Are you fulfilled now?

I am not yet fulfilled but I thank God. In everything you do, give thank to God, isn’t it?

Yes

So I thank God. It is God first and he’s everything but you need to push and God will assist you. I have every reason to thank God. I never stop adoring him.

How do you relax?

Sometimes, I relax by listening to news on television.

Do you socialize?

Yes. Sometimes I go to my club on Saturdaysto spend my days, I play scouch, I play table tennis andon Sundays, I go to church and comeback to the family.

What is your message to haulage operators out there that are not making headway?

I will tell you something, I have introduced my friends into haulage business and they are doing very well. All the friends that have come to me, listen to me and work with me are doing very well in the haulage businessand more are still coming in.  I said something earlier, but I want to say it again, most of the people in the haulage business don’t have integrity. If you take loan from the bank, the money doesn’t belong to you; you must pay back but unfortunately for some people, as soon as take loan from the bank, they started living some frivolous life. Most of us in the haulage business are killing ourselves because we are not doing the right thing. If you take loan from the bank, start planning immediately on how you will pay back, don’t divert money that comes in into another thing such as buying houses or acquiring property; it doesn’t work that way. I will continue to recommend haulage business to my friends and love ones till tomorrow. Again, don’t signed contract that will put you into trouble.

How about those that are aspiring to venture into the haulage business, what is your advice to them?

When you want to start a haulage business, make sure you have a good contract. Make sure you have a concrete process. Make sure you have a working system. Some people have money and just buy truck but they don’t know where to start from. Some people bought trucks but don’t have yard only to be parking the trucks on the road; these are some of the pitfall to avoid.

What do you think the government needs to do enhance the growth of the haulage sector?

Government is not really encouraging us in the haulage sector. We are being frustrated everyday. The federal government should urge the state and local governments to stop taxing us excessively. The government needs to help haulage operators in this regard. There should be a regulation. Imagine your truck buy a sticker in Lagos, when you get to Ogun state, you buy another one, when you get to Ibadan you buy another one; every state you get to you must buy hackney permit, this is frustrating, it is killing. The touting in haulage business is killing. Government should look into itand see what can be done to stop the anomaly. Multiple taxations should be discouraged.

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