Global Fleet is celebrating 10 years today. Indeed, the occasion calls for the rolling out of the drums to celebrate the group that has made impact on Nigerians at the corporate and personal levels. It is also an opportunity for the Group Managing Director (GMD), Barrister Jimoh Ibrahim, OFR, to speak about the decade-old journey and further project into the future. Excerpts:

The Energy Group is 10 years old today with over 22 firms under this multinational. How did it all start?

It started after I lost the gubernatorial election in Ondo State to Dr. Olusegun Agagu in 2003. There were some programmes I had promised to execute for the people of the state if elected governor. One of them was to establish a mega oil and gas firm to be called Ondo Oil and then get each local government area in the state to establish 10 filling stations in their areas to create jobs. With this, we would have 180 new filling stations in the state and Ondo Oil will be the major marketer. This will also help drive the IGR of the state. So, after I lost the election, I was in London resting. While reviewing the videos of my campaign, I saw the Ondo Oil project again. I then said ‘why don’t I do it for myself if I can’t do it for Ondo State?’ That was how I started with the setting up of an oil and gas company. Then, instead of building stations, we decided to look for those who want to sell their stations. That was how we started. I came back to Lagos after the holiday and told my friends my plans. I went to the Corporate Affairs Commission for a name search and discovered that the name, Standard Oil, which I wanted to use, had been incorporated. So, we incorporated Global Fleet Oil and Gas. The name fell in line because the idea was to have petrol stations all over the place. The whole idea was based on my thesis in Harvard.

So, the first baby of the Energy Group was Global Fleet?

Well, what we did was to start with Global Fleet Oil and Gas, and the strategy was to start looking at the future of oil and gas business. Later, we started to diversify because we realised that the funds we were using were borrowed from the banks, creating many assets and meaning that we were growing many asset balance sheets; we were growing revenue in terms of daily cash from the stations. At the same time, we were building liabilities, because the loans were coming at a high rate. Sometimes, the interest plus the principal loan move faster than the revenue. When you buy existing petrol station, it takes time to clean it up. It takes time to re-brand and align it to our operations and human resources plans. When you draw down on a loan, it does not wait for all these realignments. It starts reading the moment you draw the loan. We realised that we would generate assets fast but at the same time generate liabilities faster. So, we decided to diversify to areas where we would make more income to neutralise the liabilities being generated. The realignment is very fast in hotel businesses. You can buy hotel today, turn it around, improve on quality and you can start having your money immediately. It is not like buying a petrol station and all its challenges. We wanted to see the other areas we could go into so that the interest on our liabilities could be reduced when compared with revenue so that we can net off the loans very fast. That was what we did. In the process, we grew by expansion not by innovation. That was our key strategy. We believed that in the first 10 years, we would grow by expansion. 10 years after, we would grow by innovation. Before this, we acquired to expand. Now, we are very big. We have diversified to hotel, banking, insurance, education and some other areas. All of them cannot be profitable at the same time, but they can help reduce the loans. Whatever income we make can be used to reduce our loan. You will have a relieved balance sheet in terms of having assets of yours.

How many companies do you have under the Energy Group now?

I cannot say categorically (big laughter) because of my oga at the top. Anyway, jokes apart, within and outside Nigeria, we have about 22 companies. Our diversification got to a level where we had to think beyond Nigeria. Look at somebody like Davis Dell retiring at the age of 40, creating businesses in several parts of the world. That is the challenge. We are in six countries now – Nigeria, Sao Tome, Ghana, United States, United Kingdom and UAE.

Looking back, 10 years after, what have been the high and low points for the Energy Group?

The high point is the success of our business strategy. Our strategy has been working. The low point is our corporate strategy moving faster than employees’ knowledge. The low point is the inability of some of our workers to develop the intellectual capacity to match the challenges of our corporate strategy. The strategy is more advanced than what most of them can cope with. So, there is a knowledge gap. This is where we are working on through training and re-training. Here, training has to be modified. The question is ‘what are you training on’? Are you training on the theory or practical aspect of the job or knowledge that they need? A situation whereby you see a general manager without knowledge of the flow of cycle of execution is a big problem. He does not know how to flow an assignment. The alignment of an organisation becomes a critical challenge. That is fundamental to the success of an organisation, i.e. how much you can align the internal and external structures and, of course, the strategic measurement of your balance scorecard. These are areas where we are having problems. What the universities send to us to use as instrument to run the corporation are far below what we require. In fact, it is very difficult for many of them to cope with our demands. These have been the low points for us. When you move abroad, manpower in Ghana is better in terms of the level of understanding. Maybe because the banks in Ghana have a policy of not employing any graduate having below a second-class upper. That is their policy; it is not mine. I take any graduate. I believe that people with a first-class and a second-class degrees are not useful in business. I believe in those with a lower second class, a third class and a pass. These are people with high level of imagination. They are always very useful in terms of moving corporations forward. But our banks in Ghana and Sao Tome differ from my own strategy in this regard. They employ only a second class upper and above. They have moved faster than Nigerians in terms of staff being able to understand corporate strategy and clean them up quickly. But here, it takes a lot of explanations.

The Group is renowned for a number of acquisitions and turnaround. What have been the challenges?

Virtually all the companies in the group were acquired. It has been quite interesting. What we do in the corporate theatre is similar to what surgeons do in the operating theatre. If we buy a company that is bad, we build it up and start the turnaround. We take it to surgery if it requires it. At times, we may shut it down to re-start again. It is like taking a patient to the hospital. The same thing happens with corporations. If they are in a very bad state, sometimes you shut them down to do a good surgery. But some people will start shouting that I have killed the company. If the company is successful in surgery, one will expect that the surgeon will get loads of thanks. But in the Nigerian corporate world, the former owners will start looking at the agreement to see if they could take something back. This is very embarrassing. These are the challenges in corporate surgeries. So, what do we do to avoid situations like this? We tighten the Shares Purchase Agreement very well. If you tell people about the turnaround plan, more often than not, they won’t understand you. When you tell them that you are retrenching, they won’t understand. Sometimes, you don’t get 100 per cent acquisition with some board members not on your side. You have to do proper alignment because you need board support to run the company. After this, you move to human resources alignment. Here, you talk about people. In every organisation, you find many people pursuing individual goals. You have to make them understand the difference between personal and corporate goals. You have to look at the reward system to address their personal needs. There must be strategic awareness because workers need to know where you are going. There must be advanced strategy communication. If you do all these very well, you will get continuous improvement. There are some companies you may make mistakes. For instance, maybe you did not do proper external alignment for a takeover of a government venture like NICON Insurance. You probably realised that it has generated a lot of concern from stakeholders. You need to re-align the stakeholders to realise that it is now a private business and no longer a government business. You also need to work out how you will take care of their interest even though it is now a private business. The next question is: how do I retain existing customers to retain and improve on the existing balance sheet? If you are running a conglomerate like ours, you will find out that some companies are very healthy; some are not too healthy, some are sick. So, you have to do what I call balancing. What are you balancing? When company A needs money from company B, you do inter- company funding. As company B begins to do well, it will pay back company A. Everybody becomes okay and you move on.

Which of the acquisitions gave you the most problem after acquiring?

Honestly, if I look back, all the acquisitions have their own peculiar problems. I have had the situation whereby an acquisition that we thought would not create a single problem, turning out to be problematic. It will even lead to litigations. In fact, nobody expected any problem from those problematic acquisitions. They were direct acquisitions and there should not have been any problem. People sell their shares but interestingly, turn around to create problems. It was good we documented everything; otherwise, they would have embarrassed us. The parties we related with in the problematic ones were people who ordinarily should not create unnecessary problems.

Was that what happened in the case of Newswatch magazine?

Well, something like that and some other few ones. The key thing here is that, just like a medical doctor who prepares for surgeries with scans, our own scan is the diagnose report which our turnaround experts will have to go and do even before we purchase and then start talking about turnaround. If you are told that this magazine sells 15,000 copies weekly when you enter, you will realise that it is doing 4,000. Now, you have to go back to do an emergency plan and then move up from there. Take the case of NICON Insurance, when we bought it, we never knew that there was a pension liability of N26 billion. Meaning that we had a negative N26 billion in our books even before we start operating. When we entered NICON and were seated, we saw the liabilities. Now, there was no warranty for the liabilities. Even, if there were warranty, how would you collect that money from government? We had to battle the liabilities which we did not bargain for. So, when we took over, all our efforts were geared towards reducing these liabilities. It was tough. In a hotel for instance, you are told that the liabilities of the hotel you are buying is N700 million. That, you will think is very light. When you enter, you will probably see about 70 government officials living there permanently. So, you have to find a way to eject them. These are not within the immediate charge. There is no amount of diagnosis that you can do that will reveal all the problems until when you enter the firm and take over. Then, when you enter, the managing director must go. There is no acquisition anywhere in the world where the MD stays except a management buy-out. What we do in our own case is that we don’t allow managing directors to go instantly. We retain all the workers and stabilise the system. We believe that when you sack all the workers, you will lack information when you take over. The old management might go with vital files. When you start having cases, you will have no files to fight them. So, acquisitions and turnaround present interesting challenges. But we like them. The only areas we experience very little or no problem is when we buy from foreigners. Companies acquired from foreigners hardly give us problems. The companies we bought from HFP – the HFP Industries and Hotels gave us no problem. What they tell you they have are the things you will find when you move in. In fact, you will find extra beneficial things they did not disclose. But from Nigerians, when you buy ordinary petrol station; by the time they hand over to you and you send the first trailer load of petrol, you will discover that the under-ground tank is leaking. You will have to exhume the tank and buy new ones. This is something you did not plan for. You will be talking about additional capital here. Our first 10 years are meant to clear all problems associated with acquired companies. It is expected that after 10 years, we would have cleaned all of these. Post-10 years, the company will now grow not by acquisition, but by innovation.

Are you still planning to acquire more companies?

No, no. In the next 10 years, we have no plan of acquiring companies except it is within the system. For example, if it is a newspaper, it must be one that will align with the existing ones. We cannot just wake and say we want to acquire a brewery. There is no brewery within the conglomerate. That will require a new set of management science and we will not go into it.

Was the Virgin Nigeria acquisition a wrong decision? What went wrong?

It was a fantastic idea. I must tell you that it was a good decision. My intention was that post-10 years, we would have surplus in our Group account after paying all the debt. Then, we would now move the surplus to Air Nigeria to create a national carrier for our dear country. But the problem with Air Nigeria has to do with human resources and subsequently, safety. It pays me to close down Air Nigeria than to begin to get condolence messages after air crash. We were not hoping for a crash but from the signal we were getting with the attitude of staff, we needed to take cognisance of the likely consequences. No air crash comes suddenly. Crisis develops gradually. Remember, one air crash can ruin an airline. We had to be sensitive about the Air Nigeria issue. How can workers go on strike in May for that month’s salaries? How do you explain that? In an industry that has to do with safety, you have to shut down the place. If it is a hotel, I will clean out the staff and re-start. You can’t do that with airlines. Regulators too also created problems for us. Today, they will tell you that you can’t fly to Abuja but you can fly to London. Consistent policy is key to aviation safety. If we can’t guarantee safety, we won’t continue with aviation. There were only two aircraft left when Richard Branson ran away. We moved it from two aircraft to 12. We had no solution to the staff alignment problem. Two frauds made me to shut the place. Staff can issue 10 free tickets to themselves annually. We had about 1,200 staff. That translates to 12,000 tickets annually. 12,000 is the total number of passengers we carry in a month. That means that revenue from our operations for one month will go towards staff free tickets. Then, they collect salaries. I said it must be stopped and that if they want an increase in salary, they should make a case for it. I stopped it in April and that led to the May crisis. There were also huge frauds with student rebate. External people will sell our tickets and return more as student tickets. I did a periodic check for two months and 65 per cent of passengers carried by Air Nigeria were students. It was throughout the year. That was what killed Nigeria Airways. If an airline sells mainly students’ ticket, where would it get money to maintain aircraft and fuel them? I now said that a desk should be established at the head office where students can call a particular number for students’ ticket. I directed that no station should sell students’ ticket again. The staff did not like it. Again, when we started the Lagos-London, one afternoon I just drove to the airport and joined the flight. It was full. I asked the pilot why they were using 70,000 litres of aviation fuel to go to London and 120,000 litres back. He said ‘Mr. Ibrahim, we carry more cargo when coming back and burn more fuel.’ So, when I got back, I asked them the amount made from cargo for the flight and they said five thousand pounds while spending extra N6 million on fuel. So, where is the economic sense in this? Where is the money from cargo? They said it would be paid in three months. After three months, nothing came. They were also printing and using manual tickets as a way of perpetrating fraud. So, I had to give two weeks’ notice to shut down the airline. When I went on the last flight to London, I was well received and encouraged by UK Borders. They commended my action. If I wanted to run away, I could have simply stopped flying. What we did was to tell anybody with claims against us to come forward. It was a fantastic experience for me. We paid everybody.

But it ended on a bad note.

Not really. If we sell out investment, we will recover our money.

Any hope of Air Nigeria coming back?

Well, I cannot say categorically. The Group’s Council will meet next week to take a final decision on Air Nigeria. But I can tell you that our position has always been on divestment of our shares from it. I can tell you that the airline will fly again, but under a different ownership not Jimoh Ibrahim. It was sold to me by Richard Branson. I will sell to another person.

The Group recently established a university in Sao Tome. Can you tell us more about this?

Yes, it is called Premier University, Sao Tome. It is taking off this year. Apart from God, what has helped us most is education. If we fail to give back to education, it will be a disaster. Now that the Group knows what we want in terms of knowledge, we should be able to set up a school to give us what we need. That was why we came up with Premier University. We want to produce great future leaders, future corporate leaders who will do it better than Jimoh Ibrahim. We want to develop them in the Premier University. Nigeria already has over 120 universities. Sao Tome has no single one. The request for a university in Sao Tome was made by the country’s Prime Minister at a dinner and I was touched. I told him about the Group’s plan for a university and promised to look into the prospect of setting it up there. That was it. We have been working on that in the last three years. Our university is a peculiar one. We run a six-year programme and you get B.Sc, M.Sc and Ph.D. We run leadership development courses. We don’t just run regular courses like Sociology, Accounting and the rest of them. Any hope of setting up a university in Nigeria? Yes, there is hope. In the future, we will talk to the National Universities Commission and see if we could bring a faculty of the Sao Tome University to Lagos.

How challenging has it been running all these companies? Do you sleep at all?

Yes, I sleep a lot. I only have two programmes I run – work for the Group and sleep. There is no time for any other programme. My church programme? Maybe on Sundays and not more than one hour. I am not interested in anything more than that. I visit all the companies abroad, at least every three months – Ghana, Sao Tome, London, Dubai and the United States. Two years ago, Bombardier wrote me a letter asking that I should drop my aircraft for special checkup because we did 900 hours in a year. This is very unusual of a private jet that is not on charter. That was like two years combined into one.

When are you planning to retire?

I should be able to appoint a successor by next year; a GMD designate. He will work with me for about six months after which I will pack out and move to Igbotako (my village in Ondo State). I will not just retire from business; I will retire from all my appointments. I won’t be on any board. I will just be a shareholder. Very soon, we would start listing some of our companies on the Stock Exchange so that Nigerians can benefit from them. By next year, hopefully, two of the companies will be listed.

What is the Group balance sheet like, say last year?

Ah, I don’t know. Honestly, I don’t know that of the Group. I only know of a few of the companies.

Some say that the media arm is not making money. So, what has been the attraction in them for you?

The media arm is not supposed to make money for us now. By the nature of the business, you have to go on for another five years. In fact, the media arm will be expanding next week. We are putting printing machines in Port Harcourt, Owerri and Kano. So, we keep putting money in the media. Our Group will continue to support the media until 2017. This is just 2013.

If you are asked to pick the top three companies you think are the best in your Group, which ones would they be?

I will take the media; then, the industry and the investment company.

Are you in any way affected by criticisms trailing your operations?

People will support us eventually. It takes time. We will just continue the good work. The kind of challenges Bill Gates faced under the anti-trust law in the United States was massive. It was the government and the Congress prosecuting Gates then. Today, Bill Gates is king. Both the government and the Congress invite him for their functions. The Lord Jesus Christ was persecuted too. We all love him now. That period of hatred will be there. You don’t need to be doing adverts to change it. With time, the same people that hate you will be your friends. It is normal. So, if somebody steals my money and I sack him, do you think the person will say anything good about me? I won’t let the person go free. I will collect back the stolen money. Some companies will just send the thief away, but I will collect my money. After this, they will start writing all sorts of petitions against me.

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Posted in Nigerian Newspapers. A DisNaija.Com network.

Source: National Mirror Newspaper

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