The Business Year Interviews the Group COO, Thomas Oloriegbe

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Can you provide a background to the operations of the Nosak Group?

The Nosak Group has been in business for over 30 years. We are a fully indigenous Nigerian enterprise diversified in about 13 sectors of the economy. We are into ethanol refining, with a plant capacity of 500,000 liters in Lagos State. We also have a refinery in Apapa, where we refine oil with a capacity of 200 liters per day. In addition, we have a distribution company that hauls our products across the country via trucks as well as CCD Superstores that we use as a distribution channel for some of our finished products. We also have a company in the oil and gas sector called Grand Petroleum and Chemicals Ltd that has 6 million liters storage capacity in Amuwo-Odofin and 21.5 million liters storage capacity in Apapa, where we bring in base oil and convert it into lubricants for vehicles and machineries. These operations constitute about 70-80% of our turnover while the others support our strategic business units (SBU), which drive the main core strategy. We also have Saturn Farms, where we have 5,000-8,000 farm plantations in Edo State.

What are your expansion plans in the region?

Our plan was to have a factory in Tema in Ghana for ethanol refining. However, there was a crisis in the entire manufacturing sector that made us roll back our plans to expand into Ghana and Cameroon because we had to concentrate on our local market. In time, as things improve and the economy becomes more stable, we can follow up with these plans. The devaluation had a backlash on manufacturing concerns that we were not insulated from and in the future we would like to revisit these expansion plans to enter most West African countries. For now, however, our plan is to consolidate our position in Nigeria.

What challenges will businesses need to contend with in the near future?

In addition to storage and infrastructure requirements, there are government policies that over the years have been unstable. For example, when talking about backward integration and getting more farms, these involve our land laws and issues with the Land User Act, which many feel is outdated. For businesses to thrive, the policies and laws of the land need to be revisited. There has to be a handshake between physical and monetary policies. Interest rates are currently at around 20-25%, sometimes as high as 30%. With single-digit rates, there will be increased investment as currently there is a cannibalistic sentiment as business is balanced for the benefit of the bank. Government policies need to be improved and the environment in terms of government involvement with PPPs needs to grow. The government needs to deal with housing and provide an enabling environment for the private sector to come through policies and laws. Our president seeks to work toward that direction with the privatization of the ports and airlines. These are the right moves as the business of the government is in fact governing.

What is your outlook for 2018?

Our look for 2018 in view of our position is that we want to consolidate our backward integration strategy and acquire more land in Edo State and enter plantations for palm crops in a manner that could enable us feed our refinery. Crude palm oil is not available and the only way we can mitigate that is to import from countries such as Malaysia to feed that gap. If we are able to concentrate on our backward integration with a gestation period of four to five years to start having some yield, that will allow us to stabilize in the medium to long term. Our fleet size in our distribution network is low and we want to acquire more trucks in order to strengthen our distribution network and haulage business. Furthermore, in the supermarket sector, we should be able to open at least one or two additional neighborhood malls that will help strengthen our distribution channels. In the real estate sector, we want to increase our commercial bases with more warehouses; for example, in Amuwo Odofin and Sagamu, the meeting point outside Lagos. In 2018, we need to consolidate all our strategic options that we developed for 2017 in a manner that is sustainable for the environment. In 2017 we started a training center that seeks to develop our internal manpower. We also want our CSR policy to drive home support for our local communities to be able to support their work.