ABAYOMI AWOBOKUN is the Chief Executive Officer, ENYO Retail and Supply. In this interview with FRANK UZUEGBUNAM, editor, West Africa Energy Intelligence, he talks about Enyo’s quest to leverage on affordable technology, downstream liberalisation, outlook for 2019, amongst other issues. Excerpts:
ENYO is the new kid on the block in the downstream sector. Tell us more about the company?
Enyo is owned by shareholders that have a long history of investing successfully in the oil and gas supply, distribution and marketing space on a local and global scale. These shareholders identified an opportunity in the local market that their expertise could optimise and also felt that the local market would benefit significantly from their investments. This led to the development of the ENYO Retail brand and the development of a team to put it all together under the stewardship of a very experienced board.
Specifically, our shareholders have extensive expertise in global supply and trading, international supply to Nigeria, terminals and storage management and most importantly efficient distribution within the country. We are now investing in last-mile distribution and marketing as we have a huge chance of building a great offering to the sector.
Enyo Retail is all about filling the gap we see in the local market and one of the ways we are expressing our commitment to the Nigerian market.
How economical is it to invest in a sector where you have to import your products, but the price is fixed, therefore capping your income?
The sector has numerous opportunities despite its challenges. Enyo retail is creating jobs for Nigerians while providing options to consumers. It is deepening the distribution capacity of the country to ensure that the days of unmet demand for fuel products are a distant past and most importantly, it is a good corporate citizen.
The downstream is a fundamental industry in any country and until renewables completely take over, it will remain an essential one. The current regime has been put in place to ensure a degree of stability on many other fronts of the economy and as soon as progress is made on some of those fronts, it is not unusual to expect some liberalisation of the sector. Liberalisation will deepen investments in the sector; this will help create more jobs and even boost entrepreneurship. We believe that season is on its way and we are glad to be players in the sector ahead of some of those changes. Our plan is to scale our business very quickly, leveraging technology and to use innovation to develop a loyal customer base. We are focused on being competitive and consistent in the delivery of value to our consumers. Our end goal is to be a major player in the retail space with roots in oil and gas.
Can you elaborate on Enyo’s emphasis on technology?
Nigeria’s downstream distribution is perhaps one of the largest in Africa with up to 12-15 billion litres of refined products sold annually. This could easily generate up to $6bn in revenues and significant sums in profits to corporates and indeed to the government as taxes. In addition, it employs thousands of professionals and creates hundreds of entrepreneurs annually. It is easily one of the most successful sectors on the continent by virtue of its size and capacity.
Unfortunately, it enjoys a very low level of technology utilisation compared to other sectors of its size and importance. Enyo Retail seeks to contribute to the renaissance of the sector especially as it relates to the use of affordable technology and we are doing this by building our entire value chain on locally develop technology and expertise. Our utilisation of technology is one of the most competitive in the sector; it boosts our visibility of all elements of our supply value chain and helps us deliver competitive margins compared to our main competitors. We are also able to provide more career options for our teams as a result of our technology systems ensuring we reduce the rate of staff redundancy we suffer compared to the industry.
Most importantly, our systems allow us deliver quality products and better measurements on volumes delivered to our customers allowing us to focus on customer loyalty and innovative non-fuel products for our customers.
What investment is needed for such technology?
Our focus is on affordable technology only, so what we are deploying and are using is consistent with the cost expectations of our business. In our view, the cost we cannot afford is the cost of not using technology to scale our business.
Traditional fuel distribution companies are currently facing all sorts of challenges that we are not faced with because of their manual systems and processes in this interconnected world.
We are certain that businesses that seek to succeed in our sector will have to adapt to the challenges faster than manual systems can cope with. The difference between a technologically driven value chain and one that is not could be as high as 30 percent in staff costs. A technologically driven supply chain pays for itself in a very short timeframe and as the company scales, it is well positioned to benefit from cost economies better than if it were a manual supply value chain.
It is usually more difficult for big businesses to change the way they operate despite the changes to their business landscape. We are building our business to be nimble, agile and constantly testing new levels of adaptability to changes we foresee in the horizon.
What is your target in terms of retail stations and other projects?
As of October 2018, we had just over one percent of the Nigerian distribution market share and remember it is a vast country. Enyo Retail is already operating in 13 states of the country. We started in the South West of the country but are now almost equally spread between the north and the south; we have operations in the east and also in Kano in the northern part of Nigeria.
We will continue to grow our market share. The board and shareholders are keen to see us build a nationally relevant company and generate more quality jobs for Nigerians. I believe by 2019, our brand will be well known across the country. We have very successful shareholders and as such have very high chances of achieving our goals.
What is your outlook for 2019?
2019 will be a good year for our business and our teams. Our brand will enjoy more recognition; more consumers will get the chance to interact with us; more sites will open in many more neighborhoods; more of our products will get to more homes and we will deliver more value to all our stakeholders.
We will end the year as a much stronger company, a bigger brand in the hearts and minds of our consumers; a more efficient fuel distributor, and fast-growing lifestyle brand in Nigeria. We look forward to the future.