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ABAYOMI AWOBOKUN is the Chief Executive Officer, Enyo Retail & Supply, a downstream marketing company. In this interview with FRANK UZUEGBUNAM, Awobokun talks about the 2nd anniversary of Enyo, managing retail prices across the length and breadth of Nigeria, downstream deregulation, amongst other issues. Excerpts:
Enyo has just celebrated its 2nd year anniversary. What can you tell us about the past two years?
I think the best way to start is to express gratitude to our shareholders and the board. When we started, there was a lot of negativity around the downstream sector. Despite that, we were able to get off the ground and raise capital. We have a great board led by our chairman, Tunde Folawiyo. In the early days, people were asking “Who are these guys?” But the board gave us legitimacy. The board is made up of experienced people in the oil and gas space.
We launched our first station in August 2017 which was our Ibadan Olorun Sogo; our second was in Zuba, Abuja, and then we went to Kano as well. We tested the waters in a few cities and closed the year with five stations. We thought it was a huge achievement because we did not think we would have any station that year.
In 2018, our focus was to roll out 25 and we closed the year with 40 and in 2019, we just continued along that growth trajectory. That is how the journey has been.
It has been two years now and we still feel like we are a startup. The opportunity ahead of us is strong. With God on our side, we can tap into it.
How will the lessons of the past two years help in navigating the future?
The first lesson is that if you listen to the negative narrative around the downstream, you will miss the bigger picture, the contribution of the industry to the fabric of the community.
There is also a lot of negative talk about regulators in the downstream. We found that the regulators are actually very collaborative, very understanding and also internationally aligned with what is going on internationally. Today, to get your licenses from DPR all you need to do is to go online.
We have also learnt that customers appreciate respect, thus, when we build our stations, we ask for feedback. We see that customers can see all of the efforts or most of the things that we have put in. They can literally tell us what we have done well and those areas we need to improve. Those are some of the bigger lessons we have learned since starting this business.
What do you consider the most important factor in running a business like Enyo?
Integrity. I would say that we have built a brand that stands out because we designed from the ground up an honest brand. We train our teams to be honest. We are very harsh with members of our team that break that code. We invest a lot in our measuring instruments to ensure they are measured to be as accurate as possible.
We did a research a couple of months ago asking customers what they like the most about Enyo and we are very proud that what came out strong was that “Our Litre is a litre” which is a slogan we kept and we keep ourselves honest. If this is the expectation of customers, then we must not let them down.
Integrity is more than just selling accurate measurements. Even in the design of the people systems, the design of financial systems, paying taxes, withholding taxes, getting licenses and working with regulators, I think an integrity focus in everything we do is the most important thing in our business.
With benefit of hindsight, what are the things the management would have done differently?
Looking back, I think we made some good decisions and we also made some false assumptions. One of the assumptions that we made is that the business is strongest only in the major cities. We are finding that it is not the case. We have found out that there are pockets of demand across the country that are not in Lagos.
Aside from Ogun and Ibadan, we are quite active in Makurdi and we found it to be a great market. Perhaps two years ago, management would not have considered investing in the market but we found it to be a very strong market. It is the same for Calabar, where we are now rolling out and we have found it to be a very strong market with great opportunity.
We have also improved on site selection and begun to use technology rather than emotion. We are strong in Enugu where we have opened in Garden Avenue, Trans-Ekulu and Ogui Road. In the early days, if you offered us Enugu, we would have said “Why not we focus on Lagos and Abuja?” Kaduna is a location we also found to be very welcoming as well as Kano. We are in Sharada. We are in the eastern bypass and are looking at other sites.
So, one of the bigger lessons for us as management has been eliminating emotion in site selection and focusing on using technology.
So are you satisfied with the progress Enyo has made so far?
I will be honest with you; the team says I am a difficult man to please. I have high expectations from the board. I am happy at the progress we have made but I am not satisfied. I think we can certainly do more in terms of rollout. There are opportunities knocking on our doors every day; we also do fuel supplies to companies. A lot of our clients are keen to see us do more on the line of innovation, reporting, understanding their energy needs. In all, I am thankful to the board and especially to the team. But I am not satisfied.
Is it too early to ask what to expect in 10 years’ time?
It is not too early. I have no doubt that in 10 years’ time Enyo Retail will be one of the bigger brands in the fuels retail space in Nigeria. I think the fuels retail space is going to change. It is already changing; there have been a few divestments and acquisitions, that is one way that the market is changing.
Another way is that there are new entrants. We are one of them. You will also see some of the old entrants/old participants rebrand and reposition.
So people say to us: you are making everybody buckle up. We are bringing back some innovative competition to the downstream which is great!
So in ten years, what you will see is an Enyo that is a first-class, competitive and globally comparative fuels retail brand on the forecourt. You will probably see that the whole industry has also moved up with new names including our own. You will also see that some names you know today will disappear. Some will have new owners. That is already happening. There will be some rebranding and you would probably see a lot more professionalism right through the value chain and a lot more innovation. Many of these things, we will be responsible for but I also expect that others will contribute to that magic.
Should we expect to see Enyo in the refining space even if it is on modular scale?
I will be honest with you; in our current business plan, we are not refiners. We are retailers. We are keen to buy fuel from the best sources, we want to know and own the customer, to build a business that is intimate with the customer and initiate that exchange first with fuels but also allow partner companies use our relationship with customers to sell their own products, services and even use our facilities. Our current business plan sees us purely as retailers. We currently have no refining ambitions.
How much of technology are you adopting in your operations?
We started with a reporting platform which we bought from a company that developed the proprietary (RIGHT?). That, in the first instance, reports to us everything that is happening in the business. After that, we upgraded that into a point of sale platform that allows us to essentially build all our operations at the stations on a technology platform. That dovetailed into a supply and order management system that allows us to keep the stations wet and allows them to order their fuel electronically in real time.
We are at the customer interface now where we have said to ourselves: “Enyo now runs efficiently on a technology platform but how can we ensure that the customer experience it as technology-driven company?
Recently we started to pilot an initiative called: “ThankUcash” where with technology we are able to reward customers for patronising us. That is just phase one.
What we see in the horizon includes a variant of self-service, a variant of deliver-to-home service, integrating patronage at the forecourt to rewards at our auto-center and also integrating patronage on the forecourt to rewards with other brands. Integrating with companies like LCC, the cinemas, food and beverage companies or leisure. All those are coming in the short term.
So our technology philosophy has been in the first instance that it must work for us and make our business more viable but then very quickly, it must also work for our customers and make their lifestyle better. That is where we are going.
Does the application of technology give you some numbers in terms of your customer base and projections?
We do have numbers and we are probably the only ones with accurate numbers. Our stations are managing an average of over a 1000 vehicles a day. Some are doing 3000. Our lower stations are in the region of 900-1000 customers a day, which just gives us a sense of what is going on the forecourt.
We are also able to track which vehicles come in and out of our stations. Sixty-two percent of the sales at our forecourt goes to public transport operators. If you come to the more residential areas, it goes down to 5 percent.
Essentially public transport is huge in terms of traffic on the forecourt. Most of our stations sell 15-18 hours. We track when the station is open and when it is shut. We are converting close to 7 – 8 percent of the traffic that passes in front of our stations. The industry norm is 3 – 4 percent conversion which is why our stations are selling above the national average.
Those are some of the numbers that make sense to the average man. There are other things like the hours the pumps run, the pump rate but those are a bit more technical.
When we look at the business, our goal is to convert more people from just driving past the station to customers and to get them to buy more liters per transaction, so we build to induce that kind of condition.
How does your staff assimilate your customer-centric philosophy?
We start with the way we hire; at Enyo we have an online assessment platform that seeks to bring the applicant through a process of appreciating that the customer is king, so our assessment is not reliant on your numeracy skills only but also very reliant on your appreciation of the exchange that should happen in retail outlets. That is where the power should lie. Once you go through that assessment and you are successful, then you join the team.
The second thing we focus on is steady training and development – we like to say at Enyo that every person gets at least one hour of training every week, which is huge. We are talking about everybody from the attendants to the supervisors, to the station managers, all the way to the head office.
The third thing that we are doing very uniquely is that we rarely hire into the head office without field experience. We did it once when we started but now, a lot of the people at the forecourt know that there is an opportunity to work in different roles in their career at the head office or in other parts of the business. That starts to engender a togetherness; everybody knows that this is one company, one destiny, and that permeates even to the field and the way they manage our customers.
Are there inherent problems trying to balance retail prices across Nigeria?
We have not managed to balance retail prices, it is managed already. The government manages it through Petroleum Equalisation Fund (PEF) and we are aligned to the dictates of the government.
For gasoline, for example, we opened our site in Enugu over Christmas 2018 and the station enjoyed incredible patronage. The reason was because we were told that quite a few of our competitors in the east sell above the regulated price. It never occurred to us once to do so. In some of our locations across the country, we sell below the N145 price number.
Our business model is one that must be sustainable. To be sustainable, we need a good brand, so we never for once considered doing things that would create a negative reputation for the brand.
In the South East, we are at even a discount to the control price in some places. It is the same thing in Owerri where we are opening now. We are also opening a station at Ifesincahi in Onitsha soon.
The price games that have been played in the past are no longer fashionable. Indeed, it is difficult to replicate some of those tricks that have been done in the industry before. Your technology will struggle; the nature of the technology is that it makes you more transparent. From the head office everybody sees everybody, we can monitor what is happening on the field to a large extent and that is improving. We have CCTV at the stations and we are able to see how they sell and how they manage customers. So we have never had a price conversation in the company.
For the deregulated products we have a technology we use to manage what the prevailing competitive price is across every station and our goal is to be as competitive as possible. So sometimes, we are cheaper than the competition with little or no margin. That is our philosophy and we have just followed it.
Do you think deregulation is the way to go for the downstream?
I have no doubt in my mind that the country will benefit from deregulation. It certainly is a step in the right direction. I, however, caution that it should not be seen as a silver bullet. It should be very carefully implemented. All stakeholders, consumers especially, should be carried along. In some instances, you hear of palliatives; those too should be considered but any agenda that seeks to rush the country into deregulation should be carefully examined. Deregulation ultimately is a better use of our resources but what I would say is it is not a silver bullet and it should be carefully implemented with all stakeholders carried along.
Do you have some partnerships?
We have affiliates, sister companies, companies owned by some of our shareholders that altogether make us more competitive. One of them is Folawiyo Energy which is a strong downstream terminal business in Apapa.
We have other retail businesses who are our partners too. One of them is Cars45, an online car retail business. You are going to start seeing a food and beverage outfit called Nuli in our forecourts. We signed with Bosch the international car spare parts company. We have our Vehicon and we have partners managing those Vehicon. We have Reelax and our partners are managing that as well. We recently signed on with Nigerian Bottling Company. We have partnered with RVRB and CCHub to bring about STEMCafe where we are providing an environment for kids to come and learn about science, technology, engineering and maths.
Tell us the products and services you are most passionate about?
I would say retail is where the passion is, opening up more stations, opening up in new neighborhoods, improving the quality of the stations, investing in design, receiving our customers better every time. Using technology to improve the conversation at the forecourt with our customers and also allowing that technology to improve their lifestyle and convenience.
We are also growing our B2B business segment. We are now able to offer our online services to businesses. Just order your fuels online; you can track your delivery, pay online and we will deliver to you in 24 hours.
We even have services where we do some equipment insurance and where we do testing for businesses to ensure that their generators or power units are not compromised from previous purchases of fuel. So if there is bad fuel, we do cleaning, we help dispose of used oil, used petroleum products.
We have also started to roll out a very exciting brand called Vehicon, which is our own brand of vehicle maintenance. We have been training mechanics from day one twice or three times a year in batches of a hundred with Automedics.
Our cooking gas, SL-Gas, which in full means Superior Liquefied Gas, is growing. As much as possible, we do not want to sell our cylinders, in alignment with the government policy. It is gaining traction. We have tricycles doing deliveries if you order online.
We sell lubricants and apply them. We partnered with Eterna Oil and Gas. We retail their own brand of lubricant called Castrol. We have also trained our staff to apply the lubricants.
Those are the areas we are focused on but retail remains our passion.
What is your relationship with the various communities where you operate?
The area we have chosen to impart knowledge is in the auto mechanic space. While the company was in its infancy, we started investing in training mechanics. We have 15 Vehicon sites open, and we have trained over 200 mechanics. We are not training them just to work or partner with us; we are training them because that sector is at risk of a skills gap especially as the global automotive industry gets more sophisticated. We could have young men and women on the street calling themselves mechanics who are not equipped to compete in the world they are operating in.
In all the communities we operate, we have a very strong relationship with them. We have a team that ensures the community feels our presence; some of the things we do are done silently, including investing in infrastructure within the communities, being advocates of the people in pushing their requests and even supporting and working with the government in their effort to improve infrastructure in the areas where we operate. That is our modus operandi.