The Group MD/CEO of Nigerian Aviation Handling Company PLC (NAHCO), Mr Indranil Gupta, in this interview, speaks on the prospect for air cargo business in Nigeria, the position of the ground handling firm in the aviation sector, and the country’s great potential in agricultural exports.
What are the factors that NAHCO Plc’s 315 per cent profit despite forex challenges and harsh operating environment?
There’s a lot of synergy in what we are doing. And there is a lot of carrying forward the good work that was done in the past and we are doing it smartly.
The path was already laid and how do we move from there on. We have always worked together as a team and not in silos. That was pretty much what I brought in. So there was a lot of strategic relationship management across all our stakeholders and clients, strategic appointments and recruitment and there was a deeper understanding of the operating environment coupled with our commitment to excellent delivery of service.
To what extent has an increase in the cost of your services spurred your revenue?
Our tariffs were not increased to enhance our revenue. They were increased to meet the increasing cost of doing business. For example, year on year, operating costs increased by 32% while administrative costs increased by 45%.
The above notwithstanding, the increase in tariffs caused a 41% increase in revenue in 2022 and a 270% increase in profit after tax.
Could you say that handling companies in Nigeria charge competitive prices in tandem with what is obtained in other parts of Africa?
With the implementation of the new tariffs, the prices of services have become quite competitive with the rest of Africa.
What are the factors that aided your recertification by the International Air Transport Association (IATA)?
The commitment to safe operations and adherence to standard operating procedures as spelt out in the ground handling agreement and service level agreements with client companies.
In terms of safety, how will you describe the operating environment and what will you want to be improved on?
The operating environment is quite safe and secure. FAAN and all the other airport authorities are committed to the security of the operating environment, ensuring adherence to safety procedures and enacting policies to cover all identified gaps.
There are, however, a few challenges with the timely maintenance of some infrastructure provided by the airport authority like carousels, belts, scanning machines, etc. These should be properly maintained to prevent frequent breakdowns which hamper the efficient provision of our services.
The government is doing the right thing and I am sure the new government will carry forward the good work that the former government has done. Listening is obviously most important and we have had multiple sessions where the government, through their different parastatals and authorities, reached out to us and has proved to have a listening ear. That is a good beginning of getting the opinions from the stakeholders and then creating a path which is then synergetic and then drives the agenda of aviation growth for Nigeria forward.
What strategic projects do you have in the immediate future to enhance your revenue?
NAHCO has several projects which it is currently undertaking including the introduction of new Businesses like the Agri-Exports which achieved its first export of fresh pepper on the 10th of May 2023, the enhancement of our warehouses as well as other technology-related projects to improve service delivery and satisfaction of our clients.
You recently opened a new facility for packaging and export of perishables. How will that service contribute to your revenue in the future?
The facility would help us segment our operations into perishables and non-perishables which would improve our effectiveness and efficiency. This is projected to impact our revenue positively as well as improve client satisfaction.
Cargo freighting seems to be taking over from passenger service in terms of profitability. What is your optimism about the future?
NAHCO is very optimistic that cargo freighting would grow exponentially contributing massively to the income of Nigeria. That’s why it is strategically positioning itself to be a major player in both imports and exports (especially exports) of shipments.
My thought as a business-minded person is that Nigeria should look at exports primarily and when I am talking about exports, I am talking about non-hydrocarbon exports. That is where the focus should be and clearly that is the way to go. Export is what we need to focus on.
Nigeria has a very big agricultural economy which can be harnessed. Nigeria has the potential of being the food basket for the whole of Africa and can do even more and there is a lot happening. I am aware of various endeavours by Nigerians in very many sustainable ways. The thing is, it is very easy to say that okay ,we are bringing foreign direct investments (FDIs), where is the indigenous development which then raises the value and retains the value within the country?
As an ecosystem, our job is to create the right environment for everyone and once the environment is there, it is basically the farmers who live to gain from it. At the base of the value chain is the farmer. And we can move the goods produced by the farmers from the farm through the off-takers wherever they are. And to my understanding, the first step should not be outside the continent, we should first look at West Africa and be the food basket for West Africa and then look at larger Africa and then look at things you can actually produce.
I was talking at a seminar recently and I specifically mentioned that as an ecosystem, you should look at grabbing a few products, it could be mango, it could be dairy products, it could be shea butter, but not the raw as we did it, we should look at the transformation.
Once you transform, the transformation process generates employment in the country and so you are retaining some of the values in the country; with the transformation you get better values for your product. And therefore, all of this would be a leap to a complete rethinking of the whole business of exports. That is what I think should be done
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