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Mainland Oil Looks to Invest N2 Billion in Expansion & Employment

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Recently, the Chief Executive Officer of Chinak Group, Mr Chris Igwe spoke about expansion plans by a subsidiary of the Group, Mainland Oil and other industry issues in an interview with Clara Nwachukwu. of Allafrica

We hear you want to expand your operations, how much specifically do you want to invest in the expansion of your downstream operations?

In the first phase we are going to spend about N2 billion.

How do you intend to source for the funds?

We source our funds locally and it is quite challenging. And this is the area I appeal to the media to drum hard on. The Central bank Governor should come to our aid because our interest rate in Nigeria is about the highest in the world.

In US here interest rate is about four percent. How do we compete with foreign companies that get funding at four percent interest rate while we in Nigeria get funds at over 20 percent? That is a major challenge.

So, I want to use this opportunity to appeal to the Central Bank Governor to set up a special intervention fund for the downstream oil and gas industry. This has become important to bail out some operators that have made the mistake of taking short term loans for long term investments. That is why some of them are not finding their feet.

But in Mainland we have a good structure peopled by professionals. But then funding at current interest rate has remained a major challenge.

Apart from finance what other challenges weigh against your business?

Finance is the key. The second one is infrastructure. Government has to develop infrastructure to enable businesses in the country. For us in the logistics business it is difficult to move equipment when there is no infrastructure.

We do a lot of work to maintain the logistics business because of poor infrastructure. So government should come up with more infrastructures to aid our operations. Why can't we have effective rail transportation system to move products? In Europe the fuel haulage system depends on the rail transportation system. Why can't we have such things in Nigeria? These are the things that would promote the provisions in the PIB.

It is not enough to pass a law; but do you have what it takes to effectively implement the law? So infrastructure is very important.

And then there is the issue of finance. Finance is the key!

Given your growth projections in the short term, may we have an idea of your budget profile?

Well, in the short term our group has the ambition to grow the business so rapidly as to create new opportunities for employment. In fact whenever I see Dangote employing Nigerians in their thousands, I nurse this strong feeling that our group should tie the same line; even if we do not employ the same number, we want to at least do half of that.

We are concerned as a group to take out more Nigerians from the labour market. So in the next two years, we want to employ 10,000 Nigerians. So when we do that we would feel confident that we are smarting up. So that is our starting point. When we create high volume employment, then we know that we have started.

Mainland Oil and Gas has become a popular brand in the downstream sector of the domestic petroleum industry. May we have an idea of the enablers that drive your growth?

Mainland is a subsidiary of the Chrisnak Group of companies of which I am the Group Managing Director. We effectively started in 2008, and we were touched by what Nigerians go through especially in the rural areas before they get petroleum products,

So we stared with our first fuel service station at Umuoji Road in Onitsha Anambra State. Today we have over 14 stations carefully and consciously located in the rural areas because of our belief in and passion for the welfare of the rural dwellers. However we have some of our stations in urban areas.

So, we are driven by our passion to make fuel available to the ordinary Nigerians. That is the vision behind Mainland Oil, a vision that drives our business strategies.

So, we started from there and the rest is history.

Given the challenges in pushing products to the rural areas, how have you been able to break even in marketing products in such remote locations?

In our group, we have a strong logistics arm. And because we are also in logistics business it has been easy for us to optimize internal synergy in bulk transshipment of products. We have a robust fleet of haulage trucks which we readily deploy in products bridging.

We also have our tank farm which happens to be one of the biggest storage facilities in Calabar, Cross River State. With our wheeling and storage capacity we are licensed by the Department of Petroleum Resources to get products allocation from Nigerian National Petroleum Corporation (NNPC) for direct distribution in the market.

We also import directly to meet demand on our facilities in addition to holding strategic reserves to ensure that that all our storage facilities are wet with products to continuously and promptly respond to fuel demand from individuals and businesses.

Given the level of your participation in the domestic fuel market, what is your view of the fuel subsidy controversy that rocked the market in recent times?

The subsidy probe is a step in the right direction but there appears to be little will to drive the implementation of the probe recommendations. The spirit with the probe was pursued appears to be going down.

From where we are sitting, it is obvious that Nigerians want to see the outcome of the probes so that it would serve as deterrent to those who come to the market to reap from where they did not sow. People should know that there is law in the land and all operators in the business must operate within the ambits of the laws that govern the state.

Source AllAfrica

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