Industry players deepen core competence in oil & gas

By Afolabi Idowu

Expert in energy and logistics sector Mr. Elvis Chukwudi Okonji has urged the players in the industry to deepen their core competence, build strategic reserves, review their finance strategy, diversify, enshrine situation analysis, and risk management to guarantee sustainability. He made this known recently while speaking with some journalists at his office in Lagos.

According to Okonji who is also the pioneer managing director and chief executive officer of GPC Energy and Logistics Limited, “We also need to envisage modifications to contractual clauses relating to endemics and pandemics, the industry is highly leveraged, labour and capital intensive.

“Covid-19 brought to the fore the risk of pandemics and nature forcing immediate shutdown of businesses. Majorly hit were the alcoholic beverages and construction materials segments, given the huge obligations associated with heavy duty truck haulage, strategic cash reserves to cover a minimum of six-12 months operations is ideal to sustain operations well into an unforeseen occurrence, the operability of these reserves will be player specific bearing in mind the negative impact of double-digit inflation rates on future value.”

He further posited that the pandemic also brought to the fore the need to position logistics companies for more sophisticated sources of financing. “We envisage a gradual switch in the industry’s heavy reliance on bank financing to the capital market, bonds and equity issues will become more desirable to hedge long term interest rate and foreign exchange risks while commercials papers may be sought to bridge short term financing needs, equity raising will improve leverage within the industry and position it for increased participation.”

Stressing further, Okonji recalled that, “In  2020, at GPC, we reviewed our corporate strategy as the fulcrum for organizational success, since then, we have made deliberate attempts at continuous improvement along people, financing and financing options, risk management, reserves, portfolio analysis, and service capabilities, we are positioning GPC Energy and Logistics Limited as conglomerate with a valuation of $1billion by 2030, however, our medium-term goal is to become the market leader in heavy duty truck haulage services in Nigeria targeting annual revenues of over N30billion, this we will drive through service excellence, superior financial performance, intelligent brand positioning, and opportunities presented by the liberalisation of African trade through AFCTA.”