We’re facing daunting challenges in our business – Jenkins

Managing Director of Sifax Group, John Jenkins met with journalists on Tuesday in Lagos to brief the media on how companies under the group fared in the first half of 2016.

ToyinAmao, who was at the press briefing on behalf of SHIPS & PORTS DAILY, captured Jenkin’s lamentations about the difficulty of doing business in the country.

Operating environment

While SifaxGroup is a global company with business interests and operations in several countries around the world; Nigeria remains the biggest market of our services. Therefore, the country’s business condition has a lot to do with our company.As you are aware, Nigeria is an oil producing country and the bulk of her revenue comes from the oil sector. This revenue has been adversely affected by the sharp drop in the price of crude oil in the international market in the last few years. Predictably, this has impacted the economy with ripple effects on the players, investors inclusive.

One of the ripple effects of this is the challenge of foreign exchange. The inability of the government to generate the required foreign exchange to oil the wheel of the economy posed a great challenge. Thankfully, the Federal Government has recently announced some economic measures to address this and we are gradually beginning to see the results.The above scenario graphically captured the operating environment of the country in the first half of the year, which is the period under review.

H1 performance

Three key subsidiaries would be reviewed here.Port & Cargo Handling Services Limitedis the flagship subsidiary in our group due to its strategic importance in terms of its size and business volumes.

All the measuring indices for the company in the first half of the year recorded a negative return when benchmarked against the same period in 2015, which in itself didn’t return any encouraging statistics.

From vessel operations, throughput figures to gate activities, all recorded a sharp decline in volumes and activities. While the percentage of volume decline varies from one measuring indices to another, but on the average, Ports & Cargo recorded approximately a 10% drop in container business operations.

Being a multi-purpose terminal, Ports & Cargo Handling Services limited, aside containers operations, also handles general/project cargoes, which ended up the most badly-affected arm of the business during the period under review.

There was approximately a 50% drop in volumes for general cargo goods between January and June, 2016 when compared with the first half of 2015.

SifaxOffdock Nigeria Limited is the inland container depot subsidiary Group. With three terminals at Okota, one at Trinity and one at ljora, the company uses these off docks to ease the congestion at the Ports & Cargo terminal.

SifaxOffdock recorded an improved business performance for the period under review as shown in the mid-year statistics. The throughput volume for January to June, 2016, compared with that of 201S shows approximately a 54.11% increase for the containers received into the facilities whilst deliveries improved also by 50.23%.

Though the business performance in this subsidiary has been encouraging, its overall impact in the Group has been minimal due to its small size and limited financial contributions to the whole Group.The improvement recorded here has been largely due to the deployment of technology, efficient systems and a motivated workforce.

With over 5O new trucks, SifaxHaulage & Logistics Limited is one of the biggest players in the industry. With a fleet of well-maintained and NPA certified trucks, the company continues to forge ahead despite the challenging economy.

Compared to 201S mid-year performance, the company recorded approximately a 20% decline in volume between January and June 2016, despite signing new business deals with some new clients like Fatoum Logistics, Lilypond Containers and APMT, Kano.

Taking into considerations the subsidiaries business performances mid-year, it is safe to conclude that SifaxGroup has recorded between 20% and 25% volume decline in the first half of the year 2016. This decline also had a telling effect on the revenue.

Challenges

Just like all businesses in the country in general and the maritime industry specifically, there are some daunting challenges being faced in the cause of doing business. Some of them include the challenge of sourcing foreign exchange, which has greatly affected our customers, importers; power is also a big challenge. We solely rely on diesel to power all our heavy equipment and generators for our 24 hours operations. This has greatly increased the cost of doing business and drastically reduced our profit margin. The access roads to the ports are in a deplorable condition and this has created a source of worry to the stakeholders in the industry.

We appeal to the Federal Government to urgently address the aforementioned challenges with a view to solving them for the overall good of the economy.

Manpower

One of the key areas SifaxGroup has devoted considerate time, efforts and resources in the first half of this year is Human Capacity Development. As a service-oriented and customer-focused establishment, we recognized the prime place that our human resources occupy in the fulfillment of our corporate business objectives.

In order to align skills with various positions occupied by staff, SifaxGroup recently concluded a staff skills audit exercise. Working with an external HR consultant, the company took each staff through a rigorous process of technical skill interview and certification verification. The exercise provided the opportunity for the company to identify the skills gaps in the system while efforts are on going to address such inadequacies.

One area that also received the attention of the management during the period under review was staff training. Recognizing the role that leadership plays in the achievement of corporate goals, the company organized a leadership training program me for all the managers.The training, which focused on leadership development and workplace intelligence, is part of the resolve of the management to continually build staff capacity for optimal performance. Some of the topics treated at the training were basic leadership skills, building influence, corporate ethics & etiquette and creative thinking.

Others included performance management, personal goal setting, team leadership skills, change orientation and problem solving for effective management. Top management executives will have their purposely-tailored advanced leadership training this weekend.

Aside these group training programs, individual staff from various cadres also enjoyed sponsorship for training both locally and internationally.

Going forward

With the recently introduced monetary and economic policies by the Federal Government, especially the relaxed forex regime, it is our expectations that the business environment of the second half of the year will be friendlier and more conducive compared with the first half. The signs are already showing.SifaxGroup intends to increase its market share with an aggressive marketing strategy, which will ultimately culminate in new clients.We expect to see a recovery from the sharp decline in our business volume.

The first half of the year has been a very challenging one for us as a company as our business figures have shown. However, the resilience of the management and the dedication of a supporting workforce have been the driving force for the marginal success we have recorded.

SifaxGroup will continue to explore available and emerging opportunities to contribute meaningfully to the growth of the economy of Nigeria. We have a leader in Dr. TaiwoAfolabi, whose vision and determination continue to inspire us to forge ahead in the midst of a challenging business environment.