- Interview Jimoh Ibrahim Chairman of Global Fleet Group -
lobal Fleet Group started business less than two years ago as a petroleum marketing company. Since then it has rapidly developed into a fully-fledged, diversified business conglomerate with a stake in a wide range of business sectors.
Its acquisitions include the Meidan Hotel in Lagos, NICON Insurance Corporation and Great Nigeria Insurance (GNI). Chairman Jimoh Ibrahim has also expanded into telecommunications with the acquisition of VGC communications.
You have an interesting background, having completed your masters' degree in Law and International Tax at Harvard University in the US, before returning to Nigeria to practice and consult. You also ran for the Governorship of Ondo State all before you started Global Fleet. In what way has your extensive and diversified background prepared you for your role as CEO of the Global Fleet Group?
Well, I believe that your background is insignificant to what you want to become in life. The essential thing is to have a basic education and move forward, there are more issues that put you on the track rather than a focus on your background. I had a master's degree in Public Administration before I went to Harvard University to study Tax at the International Tax School.
But I tell you they are all good, the Harvard training gives me a significant insight into my future and it is a big welcome development in my career in that it opened me up to another understanding in terms of case studies and motivational books and an understanding of my entire life. It gives me the required power to be able to cope with my other colleagues and has helped bring about the fact that today the Global Fleet Group is virtually in every sector of the economy. I have not been in the legal profession, neither am I a tax assistant. I am into hospitality, communication and into the industry itself, you see none of the aspects of these businesses were mentioned to me in class in my days as a student, I never came across them either by accident or by need of the university lecture and that goes to show that education that you receive in school is not very relevant, but the one you get outside is more important to your development.
Global Fleet Oil and Gas started business in August 2004 as a Petroleum marketing company and is today perhaps the fastest growing oil company in the world, while having developed into a fully fledged, diversified business conglomerate in Nigeria. What has been the major keys to success in this time?
Firstly, God is number one and again I must be extremely grateful to some people whose books I have read. I will mention a few of them; Bill Gates, Michael Dell of Dell computers, Robert Kaechew, Sharon Linder and some others. These are the people that have really affected and shaped my life. Two years ago, we founded Global Fleet, as an oil trading company. The strategy was that we were not going to build filling stations or gas stations but to acquire those stations and in just one year we were able to acquire as many as about150 gas stations. Gas sales very quickly moved up to a gross sale of a minimum of $1m a day and we were able to complete the depot and thereby improve on our haulage capabilities. We are out to acquire Gas stations and not to build them. You might have all the money to do the business but the strategy must be right otherwise money is useless. If you set out to build gas stations you will need to have town planning approval, an environmental report analysis and all of that. We rather acquire gas stations that already have all the documents and we will pay extra in price as this fastens our acquisition drive. For instance, we acquired about twenty gas stations in one week; we could never have built twenty gas stations in a week. In a country where the government is talking about deregulation of petroleum products time will tell that the players will be narrow and at the end of the day successful deregulation will have to be based on who really has the capacity to be able to do the business, which is one good side of our strategy for success.
Another issue is that as we were celebrating our tremendous growth record in the Oil and Gas - because Global Fleet is the fastest growing oil marketer in the world, having acquired about 160 gas stations in one year - we decided immediately that rather than celebrate our success we should diversify. The world strategy today is not building wealth but acquiring it and the weapon of acquisition became tremendous in our second phenomenal strategy to build a conglomerate of companies. What we do is to go to a five star hotel, we know they have cash flow problems but we have the dynamics, and we give an offer they cannot resist and they sell the hotel to us. From there we do more improvements of service, which includes illumination of light, food, health, hygiene, without increasing the price.
Do not forget that I am not operating in a developed economy where most of the strategies have been tested, as you need a super strategy to be able to cope with the dynamics of the developed economy. But for a transitional economy, our strategy is brand new. So what we're trying to do is to move to communications. We looked at the providers and saw who the best clients in Nigeria were. Don't forget the Nigerian government is going to have universal licenses for the GSM next year, so it is an advantage for us to position ourselves to acquire our operator today so that we can move to free GSM license and then move on. We were able to approach VGC communications and we acquired that company, which has about 18,000 subscribers; we want to move to 50,000 subscribers within one year.
As we begin to grow in assets, we looked at areas we needed to diversify into and we discovered that we spend lots of money on insurance. We need to insure our cars, buildings and assets. So what we did was to buy Great Nigerian Insurance Company, which is about 40 years old with an asset base of about N10billion, which is close to about $1 million. We also bought a sufficient number of shares to let us produce the Managing Director, Executive director of finance and accounts, company signatories and about eight members of the board of directors; so we have the full control of the company.
With all these, you can see the movement within the conglomerate is very complementary and this is the key to strategic development. We also moved into the industries. You know that one thing that is preached in the developing economy is never to touch production because you can never compete with the standards of the big countries in the world. Because of globalization, people love to import items and we felt that if that is the case we can get the machines back to Nigeria to manufacture these goods. In this sense it was a great help that the government banned the import of furniture. We read government budgets to determine our investment strategy and decided a furniture company would contribute to the complementary nature of our business as we needed to have furniture in our offices. As such our company produces the chair I am sitting on; my floor and table is done by my company, I buy gas from my company and I stayed in the hotel owned by my company, my life is insured by my insurance company, so I take little or nothing from the world out there.
I guess the big question is where do you go from here?
We will have to consolidate very fast from here and now turn to the next stage which is to become an ultimate investor. An ultimate investor is someone who sets up a business and moves to the stock market to give their shares to the people, the moment we do that we have consolidated the company for the next three to four years and then I can take my retirement.
You seem to have a very good plan then
Yeah, you see in the US and in Britain and in the rest of the world, people retire at 40 but we never had that in Africa, you have to get to 45 to be able to retire conveniently at a stage that Bill Gate retires and at the same time Michael Dell. One thing struck me when Michael Dell was retiring, he said "Today I am leaving, I have put this company on a footing, I am doing a cash turnover of $50 billion, I have employed 56,000 people and have located this company in 86 countries in the world". This is really challenging. We want to break that record, we also want to move to about 1000 gas stations, employ over 100,000 people, we want the communications company to have subscribers of over one million, to have the company move to Europe and America. We want the industry to have massive employment and the insurance to be as big as the insurance companies in America. I want to be able to say that when I am leaving, I am leaving a cash turnover of about $50 billion and I am employing 200,000 workers and I have the company in about 10 countries and it becomes a pivotal edifice of the Nigerian economy.
In some of your interviews, you revealed that you want to make Global Fleet Group a multinational and you have decided to expand through various sectors into the US and UK. In this respect, can you tell us what developments have been made so far?
Right now we have finished the office in London and we have just employed our first British citizen. He's going through training to see what we're doing and attending meetings with us and will be here over the next three months. By the first quarter of next year, I will make him the London Chief and he has to go back to London and do exactly what I am doing here now. We need to employ a British citizen to do what we want to do in Britain and not a Nigerian, let the British citizens lead there while the Nigerians follow. Now we also intend to have a repeated performance in the US, but for the environmental emergency that we had in Houston, we would have commenced that. However, our strategy in England is: Don't go to England to build gas stations for me, go there and buy them. When we buy about 50 stations then talk to the British citizens and get supply from them overtime. Then I will eventually decide to brand in your name and work my strategy, and then we'll be okay.
When will you actually start talking to some intended partners in the UK regarding the gas station plans?
What we intend to do is to partner with British Petroleum, but we intend to put our house in order before we consult. For instance, a gentleman from Britain is just undergoing training and we hope he will conclude his training very fast and then we need to have a recruitment policy put in place in London. We also need to have about 5-6 gas stations already relocated in strategic locations in Britain; only then will we call the gentleman to come and look into a partnership.
You acquire outlets and you don't use your name, what is the thinking behind this strategy? Is there a time when you will start using your name?
I know tax avoidance is not a crime, but tax evasion is. If I brand my name I guess the tax guys are going to be here, but if I brand in somebody else's name the tax papers go to that person. The strategy is a learning process. I brand with you and understand your culture and correct myself and again it reduces a lot of stress. I cannot be acquiring so quickly and at the same time train people and the same time focus on branding. Branding is significant to any business, the world is talking about repackaging, so we must plan our strategy about branding and have a lot to brand and Nigerians will see what we are doing.
There has been so much expansion going on in the group, we've seen a lot of downstream companies in Nigeria recently start moving to the upstream, I am talking about Zenon Petroleum and others, do you have any aspiration of moving to the upstream sector of the Oil and Gas Industry?
Not at all, the reason is that I want to be the end result of the process; the retail outlets. If you build your refinery you can't consume yourself because you don't have the outlet, I have thousands of outlets and you have to discuss with me on a daily basis if you want to move products from that refinery and its happening now.
One of the major issues we have spoken about to many Oil and Gas people is the local content policy of the Federal Government. As an expert and leader in the Oil and Gas industry, what is your view on local content and how can it be improved in the Nigerian industry?
I don't believe in it. We
should only have a free economy. It's fine if you participate and if
not, it's fine too. The world is talking about the global economy, American
and British citizens should be able to come to Nigeria and go back satisfied,
so why should Nigerians say because someone is doing better than they
are in there own country, we should have local content laws invoked.
The government should think towards that line, as it only shows that
we're inferior and I don't participate in that debate. I do what I can
and appreciate my colleagues who are doing something better and find
out why they are succeeding.
One of the major issues brought up at the recent World Petroleum Congress (WPC) in South Africa, was the need to increase indigenous human capacity in Africa and more specifically, Nigeria. What role can Global Fleet, as a Nigerian success story, play in helping to promote the training of Nigerians in the industry?
Well, in terms of intelligence, Nigerians are generally okay and all they need is to be trained. I think this is a reflection of the combined effect of state failure over the years and the mental faculty of an average Nigerian. He lost his sense of belonging, but if we can re-awaken him, it will be fine. At Global Fleet Group we have got 230 vehicles to give to those appointed Gas station managers and they got the keys to their cars on their first day of work. Your salary is paid twice a month divided into two and the office commission is good. If you're employed and posted to the Gas station, there's minimum interference from the head office and that gives you a sense of belonging, you have the right to hire and fire alongside the labour laws, then you can begin to grow and development professionally from there. Once you provide this type of environment for a young graduate, he'll perform.
I want to go back to the role of the UK in the Global Fleet business. The renewed focus on economic development in Nigeria has strengthened the commercial partnership between Nigeria and the UK. This is especially evident in the Oil and Gas Industry where indigenous companies are forming partnerships with UK based multinationals such as Shell and British Gas. What potential do you see in the UK market for your business and conversely, what potential do you think the UK market sees in the Global Fleet Group?
I do not think the way the UK comes here is the way we Nigerians should think about going to the UK to set up companies. I believe the UK is not exhausted and I see a lot of potential. I can't wait to see myself go in there. Today I have about 56 foreigners working in my establishment. Even if they humiliate me at the airport I don't get disturbed because it's not that I have come to the UK to look for a job. In fact, I have foreigners working for me. I look forward to having an American in my establishment. I have Israelis, Germans and British working for me and that gives me a sense of belonging at a global level. Our entry into the British market will be like a film show to them, seeing a young company coming to England and investing, they will want to see us grow, I truly believe that.
As the CEO of an indigenous Energy Group you're very much aware of the importance of FDI on Nigerian economic development. Sadly Nigeria is still considered a risk market by international investors, due to prospect of conflict and corruption. We're currently working closely with NSE on its Road show initiatives to work to change this image and to reach out to investors and the large Nigerian Diaspora. How is Global Fleet working to re-educate and attract international investors and members of the large Nigerian Diaspora to partner with them in the country?
The problem of Nigerians in Diaspora is the lack of correct information, and secondly they have the problem of security. That is not enough, they have to come back home and they will see that they have better opportunities here than they have abroad, because I tell you it is only in Nigeria that you can make about $100,000 a day. Global Fleet is playing a role of encouragement; I myself have already seen what is associated with our country in America. Already, they have been sensitized and what the government needs to do is to work more on security and train the police more and put a lot of money into it. Private sector players should come into it to make the country secure. Nigeria remains a centre stage to display economic power particularly through intellectual disposition; a lot of systems are going to work better here than they would elsewhere.
Well, the happenings in Nigeria take a very sharp approach in terms of development; the finance minister has come up with a lot of ideas like NEPAD, debt relief and all that. Be that as it may, we have to carry our African brothers along. It is not easy for a country like Chad where you can easily walk to the Prime Minister and book appointments on what is happening in their petroleum market.
Nigeria is playing a leading role in Africa and at the same time trying to play that leading role like America. I think Nigeria remains a centre of opportunity and as we go into that, it's important to re-organize ourselves. For instance, the war against corruption and economic crime that the gentlemen in the EFCC are fighting also brought a renewed hope and strength to the international community. These types of policies need to be more on-ground and the government needs to decentralize such policies to prepare Nigeria for Pan-Africanism; you cannot leave Nigeria to take the banner of Pan-Africanism, but you must prepare her for it. I think the President is doing this and it is very commendable, but the only problem now is that the time is short. I wish he had started doing this since 1999 when he came in, maybe by now Nigeria would have gotten out of these problems.
As someone that is investing heavily in the nation's economy, you must have confidence in the political stability of the country?
Honestly, I am not concerned about which of the political dispensations we are. What I am doing is legitimate and we even pay our taxes in advance. When we get to our end of the year, I ask my accountant if they've paid their taxes and they tell me auditors are still auditing it. I say the inland revenue will wait for that and what I do is to put a notice in a paper next week and I say: collect your taxes in advance, so we pay you in excess, whatever excess we have, you can give it to us as tax credit in the coming year. What is really very important is that the country should move forward, I know it takes time but we will get there.
As the CEO of the group, what would you like your legacy to be?
I am the CEO, but what I really want to achieve is that I want to see that I have employed a minimum of 100,000 Nigerians; I want to see that we have a company formidable enough to be taken as one of the pillars of the Nigerian economy. I want the highest reward for our shareholders so that anyone who invests in this company will have a life reward.
What is your message to foreign investors and Nigerian in Diaspora?
I want them to take this great opportunity; as soon as the company shares come to the market, people should buy. Our share is going to be very expensive but the reward is going to be wonderful. I would love to have shares that are about N35 per unit so that I become the golden share on the stock exchange. So when it happens, come invest.
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