Driving Economic Rebirth And Entrepreneurial Empowerment Through Petroleum Distribution -Victor Kalu
- Nigeria’s Population an Underutilised Asset
- How We’re Engineering Growth for Petroleum Industry
- With Our Fuel Yapa app, Petroleum Product Diversion is Traceable
Victor Kalu Executive Chairman of Vindi Petroleum explained in clearer terms how his company is blazing an unusual trail in petroleum marketing and distribution in Nigeria. An unassuming Kalu, who spent an hour explaining the novel ideas and innovations of Vindi Petroleum to expand accessibility to the product, said his commitment for deeper market penetration is borne out of passion to promote economic emancipation.
Armed with engineering qualifications , Kalu who had featured in government revenue collection drive and the telecommunications industry is carving a unique niche in the Nigerian business space. He is deploying his combined experiences to replicate a Fintech model in fuel marketing and distribution through it’s homegrown fuel yapa app that is downloadable from Google Play Store.
He expressed optimism in the ability of SMEs to champion disruptive growth that would enhance economic development through expansion of more business opportunities and birthing of more business owners.
A British Council Innovation Challenge and Chevening Scholarship recipient, Kalu sees more prospects for business growth through partnerships more than rivalries. He spoke with Ismail Aniemu, in Lagos
Excerpts:
Who is Mr. Victor Kalu, the Executive Chairman of Vindi Petroleum?
I am just that boy that grew up in Aba, went to school in Uyo, and then came to Lagos. But I realized at an early age that I was keen on innovation.
When I was younger, I wanted to change things, I wanted to make a difference. I noticed that about me and realized while I grew up that I must pay serious attention to my drive to change things. It’s been my guiding principle. I’m a person that have always wanted to test the abilities that God has given me.
About 15 years ago, I was working in Fast Moving Consumer Goods, I was working in Medium Personal Care, I was National Sales Manager and I thought that I was smart, but I felt that I wasn’t tested. So, I went to apply to contest for British Council Innovation Challenge.It was part of the Chevening Scholarship, and I won.
I was one of the seven winners and I said I’ve been in FMCG, and the only way to really test that I’m really worth what I feel that God has put in me was to work in a multinational. I didn’t have a multinational experience so I said I wanted to work in a multinational. I tried everything, and I got into Glo.
When I got into Glo, it was a massive platform to really compete at the highest level. Incidentally, when we came for the interview, some top guys from Cadbury, Airtel, and so many companies who are still my friends came . I happened to be one of the two they accepted, and the other guy had a PhD, I didn’t have a PhD. I believe that the record that I’ve set, and the relationships and the things that I’ve done in Glo for the period over seven years that I stayed there, was remarkable.
I rose from divisional manager, regional manager, to deputy director.I was trusted with several opportunities to serve inter-corporates like Nigerian Communications Commission (NCC), National Identity Management Commission (NIMC), and even in the FinTech.
When they started G-kala, I was also made to liase between Glo and the others.
In the telecom sector, it gave me that platform to look at FMCG as it was not as widespread like telecom. Telecom in Nigeria has more than 100% penetration. Tele-density is over 100%, and at the time, before NCC pulled down the number of subscribers, Nigeria’s subscriber base was over 70%, because even if someone doesn’t have anything, you see that they have a small phone, they have a SIM card, and all that.
To have driven a service to that granular, micro level, was what I got from Glo.In that quest to make a change, I was given opportunity by the Delta State Government.It was actually something I proposed to them a long time ago, so when the government came on board, they requested that I implement my idea for the informal sector.First of all, for government to really get across to them, they had to bring some of them into the tax net. When I got there, I did that for a couple of months.
I realised that, it was an opportunity for government to make a lot of money. But I saw an opportunity for government to grow the economy from what I learnt from telecom.
If you want to grow very fast, the small changes will lead to major growth. Even in numbers, if you want to multiply, let’s assume a company is making ₦10 million, and that company wants to double its revenue, it has to make another ₦10 million.
Imagine for example the Nigerian population that is really widespread. Imagine someone that is making ₦10,000 a year, and they are about 80% of the population , and you want to grow that economy. If you are expecting those making ₦10m to double their performance, it will be difficult. But the 80 million people that can double their ₦10,000, will more than double the productivity of the economy.
When I came to the informal sector, I knew that it held and still holds the most powerful asset for the government to leapfrog the economic transformation of Nigeria.
Incidentally, when I was in the British Council, there was a report that Nigeria was on a threshold of a major economic transformation. That transformation was not going to be led by Nigeria’s asset like population and all that
Nigeria has a lot of population that can really change this country. We are hoping for the big change, but we can empower these people. When I was there, we were doing that, but I felt that one of the biggest ways to really empower the economy was through energy, petroleum.It’s really critical. That’s why you see a lot of times the government pays attention to petroleum. That’s because it is a major economic driver.
This product has been a driving force. I actually studied applied physics. I went to Petroleum Training Institute (PTI), I studied Petroleum and Gas Processing. During the course of all these technical work, I was in a meeting with the MD of British Petroleum and British Gas. We were just discussing, and the guy looked at me and told me that he doesn’t think I should continue. He said,I was smart, but he doesn’t think I should continue with engineering.He said I should go into commerce and that’s why when I came out of school, I went straight into commerce.
It’s been one of the best decisions of my life, because I was able to bring real change, real thinking to what is important to the company, which is revenue, and make the greatest change in the way that companies are run. For me, I’m big on major industry changes.
Give us an overview of Vindi Petroleum. Beyond what we can see from the website, what it hopes to achieve, and how you came about the concept.
Well, to be frank with you, this is not what many Nigerians would want to hear. God gave me the concept of Vindi Petroleum. I’m telling you this for a fact. Yes, I’ve had a background in petroleum, but I never for one day thought about going into it. If you look at my career, my journey, there’s never been a stint in petroleum. I never thought about it, but the Lord woke me up and said, He gave me this as an assignment. I’m not mincing words.This is what’s happened. He told me to go into it and use it to impact the world.
Beyond the surface, is a real attempt, and I know that it’s going to be successful, to really change an industry that has the greatest impact on this economy. Even as of today, the major part of Nigeria’s revenue comes from oil. And if that is the case, other things are important. Oil powers even the agricultural sector. If you’re going to mechanize agriculture, you’ll need a tractor and you’ll transport goods. This includes storage of agri-products and all that. You need energy, you need petroleum. That is why most times when presidents come on board, their focus is a lot on petroleum.
It’s either the ministers or people like Trump are putting so much attention on it because of the power that it has. So, what are we trying to do? The real substance of what we are trying to do with Vindy Petroleum is tied to the fact that we are young people and we believe that it’s time for another look at the distribution, because we have the population. Nigeria is a country that has, I believe, one of the largest number of SMEs, micro-businesses, and what I call personal and interpersonal businesses. People that are themselves business.
No other country has this majority. In that case, if we are able to give them what they need to empower them, the whole world will feel the impact of Nigeria.That’s why I believe we can make a great impact. Today I was asking people about the cost of transportation. It keeps rising. If we have the population of SMEs, artisans, and we are able to give them access to petroleum and mobility at an affordable price, I believe that we’ll make a great impact. We are on a mission to take another look at the distribution of petroleum products, because when distribution is more efficient, there will be more supply.
Distribution delivers better access to every product. Availability and accessibility is one of the major ingredients of economic progress. When I was in FMCG, if you want to push a product into the market, no matter how good that product is ,if it is not available and accessible, it will be difficult for you to push that product. Basic economics teaches us that the higher the supply, the lower the prices .For a country like Nigeria and countries like Saudi Arabia, Qatar, they subsidise petroleum up till today, and they are one of the cheapest in the whole world.
There’s another way to go about it, which is to increase demand. The higher the demand, if we can get products better to people who have lots of demand, have lots of supply, and naturally, prices will begin to come down because a lot more people are buying it, a lot more demand is coming in, and a lot more efficiency is coming in.We are trying to create more access, create more supply into the market, and then create an affordable atmosphere for the industry.
We are actually extending a hand of friendship to the players. We are like a platform that can support everyone, including the refineries. The refineries are our major partners because they are refining. As much as you can produce, we can distribute. The generic standard way of distribution does not give room for exponential growth.
Let me explain further. As it is today, the industry knows how many petrol stations are in the country. It is a known fact. They know the number of trucks that are in the country. So they can say, if you distribute 45,000 liters to 10,000 stations, what are you going to do to increase that? What are you going to do to grow that number? You can’t do anything. You just have to distribute. The problem with this is that when the product is in the station, you have to depend on customers to come in and buy. There’s nothing else you’re going to do. I, as a person, I am not too comfortable with a business that I have no input to the growth. I have to engineer growth. What we are doing, essentially, is to engineer growth for the petroleum industry and that’s to bring new innovations of distribution.
In my village, for example, we have no petrol station in my community.The ones that are in the local government are about three. My people always have to travel with bike to go and look for fuel. If we calculate how we’re going to travel, the time we’re going to spend to travel and all that, we decide not to go get it , we just manage without fuel in my village. The demand and the purchase for that day has gone, and in sales, once it’s gone, it’s gone. What we are trying to do is to map out the growth patterns for this industry , engineer it and bring it to them.
We are calling on government to really support us because we are young people. We are not here to compete with anybody. We are here to add value to what is already being done. Let’s take another look. Let’s bring in some ideas, test those ideas, and see how we can engineer growth. The world can learn from the distribution success of Nigeria and see how it can be done. In other emerging economies, and developing countries, they can learn from Nigeria. We can export better petroleum distribution architecture to other African countries and to other emerging markets everywhere.
As I said before, I have distributed telecoms. Telecoms has the highest density of any product in the world. There is no product in the world that is consumed as much as call. I remember when some FMCG companies, would approach me .They used to say, they want their product to sell as much as a beverage, Coca-Cola. But they found out we were distributing more than Coca-Cola. Not everybody drinks Coca-Cola but everybody makes call. They said, they want to distribute like airtime telecoms. We want to bring that distribution expertise and innovation.
I was divisional manager for data, for Glo, that led the biggest revolution in the telecom industry.I have what it takes to really add value to this industry.That is at the core of what we are trying to do.
Let’s look at timelines. You represent a bridge between the older and younger generations . What do you hope to achieve in the next two years, in the immediate; in the next five years in the medium and maybe in 10 years time, long term?
When we started from day one, I told my team that I wanted us to build an enduring business. That is why, if you go online, you will see that we are changing a lot of things about the company. For me, what I learnt from my work experience is that there are two jobs of a CEO. I’m not a CEO, but I lead the management of a company. Business can come and go, but a company endures if you build it well. I want to build a company that will endure for a long time in the oil and gas industry.
We have set the foundation. We believe that the foundation that we have set, will not be forgotten for a long time. For example, we came into the industry with a unique retail expansion program called Own-A-Pump. It has never been done and it tells how aggressive we are. We believe in skills. We don’t believe in a small group of people making big changes. We believe that if we bring in a lot of people, the changes can be more massive rather than having one man bringing N1 billion to own a station.
I know an oil and gas company that for the past 10 years, have been trying to build retail outlets. One of them wanted to work for us, and they were ready to do 30 outlets in Nigeria.
By the time they acquired, the total outlet they had per Nigeria was 99 outlets and they’re one of the biggest. We think that we can bring another approach that will help fast rollout and that’s Own-A-Pump.
More people have small money to participate in this. We chose to break it down . People will come in and just Own-A-Pump rather than own an entire station and they’ll have a managing company.It brings more people together have stake in the business also more ideas could be added. We’ve been making serious progress .
We also,launched Fuelyapa.com, which is an app. On your phone, you can order for fuel, you can reserve fuel, you can do a lot and find petrol stations that have products. You can never be lost.If you’re e traveling and you want to know where you can refuel, all these are contained in our revolutionary fuel yapa app. Petrol stations can manage their stock accounts finance on that.
For example, one of the things that the government has been trying to do is to actually track purchase of fuel. They don’t have the accurate number. All these are statistic data, but with our platform, if everyone is on it, if all the petrol stations are there, they will know who has bought what, where it has gone, who has purchased what, how much and how many they have purchased.
It will also help the fuel stations to go completely cashless. We are not talking about card. You can order online, pay online.This is important because now financial inclusion has really spread. So it can be done now.If you have a virtual account, you don’t need a card. You don’t need anything.
You can just transfer into your account and then go to a petrol station, pick up without wasting time.With this you can track the product and avoid diversion .
In the telecom industry, one of the things that we fought, which this industry has not even started fighting, which we are trying to solve, is the issue of cash management. I was driving across one of the stations in Victoria Island, Lagos. I saw a bullion van parked in the station. As a matter of fact, they were not selling because they didn’t have stock, but the bullion van came to collect cash. In the telecom industry, we had that problem. The industry solved it one day, when somebody was in Port Harcourt, he went to market, collected cash, and was accosted on the road, shot dead, and they took the money. The telecom industry immediately moved into electronic purchasing because cash management was a big problem.
Right now, in the petroleum industry, the retail outlets keep a lot of cash. Some of them bury it underground. I don’t want to expose the secret. Imagine somebody on the highway keeping millions of naira.With Fuelyapa, you don’t need all that. All you do is send your driver to buy fuel, you don’t know if he has bought what you have asked him to buy.If you ask for receipts, the attendant and the driver always connive.
For the first time, no app in this world, has done that. You can even use it for driver management. You upload all your drivers, look at their car numbers, buy the fuel and distribute to all of them.
When I was in Glo, we tried this issue of staff fuel management. At a point, they paid money to a petrol station. We went to the petrol station. We could not get product, but they have their money, no product. They tried another one, yet they will not buy the fuel. Many models never worked, but this completely solves that problem.We have the app, Fuelyapa. It’s presently on PlayStore for anyone to download
We also have Petrokeg ,we have agents. Don’t waste your time looking for fuel for an office. There are many young women that own shops that need to power their generators and they don’t have anybody to buy fuel for them. You might be in the office and be thinking about how to power your generator.You don’t need to do that.Or you are in the office, and you’re looking for who to buy diesel for you? You don’t need that.I’m talking about big volumes; 20 liters, 10 liters, 50 liters. We can bring that volume to you.
We have our retail network. As it is today, we have one of the largest retail network of petrol stations in Nigeria. We have over a thousand.We are giving most of them petrol without cash, but we have our sales people there. If you are in our network, and you need product, we will supply you. You’ll sell and return the money to us. We are doing that already. We have our vessel that we are also bringing in.These are not things that are futuristic. These are things that we have done. We have seen the problems, and we are solving them head on.
That is the vision, with all that we are doing, we want to be able to say, in Nigeria, we have 20 million SMEs, that buy fuel from us.We can even replicate this in other countries. There are lots of refineries that are shutting down. Not because there are no customers to buy fuel, but because distribution is not effective and not only in Nigeria. People who need fuel, don’t have access to it.In Nigeria, every day you see all the queues as a result of depending on retail outlets.
Even the food industry has undergone massive innovation. Why can’t the petroleum industry? The media industry has gone through the same revolution. We are not trying to re-invent the wheel, we just want things to be done more efficiently.And that’s what we are bringing to the table. We’re very determined to get it on, which is why we’ve come this way, and we’re not letting it go until we achieve our goal.
Tell us about safety, HSE. Handling of petroleum products requires a bit of tact, expertise and caution. To what extent have you been able to put your manpower abreast with the required knowledge to manage or prevent risks?
As I said earlier, I have a background in petroleum and gas processing. While launching our new filling station in badan, before we opened our session, we invited men of the fire service. They came with uniforms, their equipment and their materials. They had a session, they were videoed, they put all their equipments there. All our stations are certified with fire service.The staff are trained on safety and d we have all the fire equipment. There are precautions, because petroleum is flammable.There are special transportation facilities for it.If you’re transporting it, it must be well covered in the right materials. There are safety requirements in the stations too.We work with the regulators a lot to ensure that if there are new updates, we are up to that. We are very much, involved basically, as an engineering company, even beyond a sales company.
Let’s look at company-government relationship. How is it like between Vindi and various state governments, federal government, and even government at the local level? Do you interface in any way?
Yes, we do interface. I said that the government trusted me to do something for them.Personally, I’ve actually been involved in governance, maybe not visibly for people to see but as a company. You would agree that the petroleum industry is one of the most regulated industries in the world. We are familiar and used to regulation.Over-regulation is not good for any industry. I’ve been in committees and I tell people all the time that when you over-regulate, you stifle innovation. If we want to grow as a country that is hungry for growth, one of the things we need to do as a nation is to tell ourselves the truth and to play to our strengths. And that’s what we are trying to do. If we want to grow as a country, we have to manage regulation.I believe this year’s Marketing Excellence Award has what is called controlled chaos. And there’s one article in Harvard Business Review that talked about the messiness of growth.
If you want to grow, things might get messy at times and there has to be some kind of learning for that growth to happen. As much as government wants to regulate a lot, it has to know that breakthrough has to come from even mistakes.If you are not willing to make a mistake, if you are not willing to get messy, you will not learn and you will not grow. So, that is my message to government to manage regulation.
That’s why I like what the financial services sector has done with FinTech and all that. They enabled FinTech to grow. And that’s why you see today most banks have embraced FinTech. I remember the time, even in Lagos, when you want to do a transaction, you have to go to the bank to do it. Right now, you can move millions in your house. You can do a lot of things wherever you are, right on your phone. FinTech gave banks a run for their money. The banks sat up and delivered greater value to consumers. So, every industry has to brace up. There were a couple of mess-ups but it was a good price to pay for the progress that we all experience today. In the oil and gas industry, we have to welcome innovation and it will come with its own messiness.
Regulation is good, but it has to be well managed. Right now, Nigeria has oil. Some people would say that Nigeria’s oil may not have benefited a lot of its citizens. Has it? When you look at countries like Saudi Arabia, it has one of the cheapest PMS. Nigeria, one of the top producers, should have something that has a direct benefit on its citizens.
We have to bring innovation. The government has to chase its own program, which I’m not saying the government should not chase. For example, what we are doing, even though the government has liberalised the industry, we are saying we have an idea on how to bring the price down.I believe that someone like Mr. President, will love that idea. Solution is to create access and demand and increase supply, then price will come down. That’s what we are trying to do.
You are bringing innovation and tech-driven marketing, which requires awareness. How do you intend to penetrate the people, to come to terms with this imagined reality, that you can access fuel from the comfort of your home, using your mobile device, connected to an app, downloaded from the Play Store, and you get it delivered. How are you driving this message down to over 10 million persons?
We want to drive it within Nigeria and Africa. We are not looking at 10 million, we are looking at billions. Our target this year is to distribute 1 billion liters. Today, as we speak, over 100,000 liters have been distributed already. We have a clock and we know we are going to meet it. We hope that our story resonates with a lot of Nigerians. We are doing a lot of CSR projects in the communities to empower women, and to tell women that even what we are doing should inspire them. It’s just a reflection of what we know, that petroleum energy has its economy.
We are asking also to talk to other journalists. One of the days we went to the Maritime Journalists, we had a parley with them. We are online talking, we are doing inner-city empowerment. We have a team of savvy publicists that are also helping us to push it. But we want Nigerians to partner with us. If some government agencies, let’s assume the Nigerian police, have a fleet of cars, imagine all of the drivers enroll and get their vouchers from Fuelyapa and go and pick up their petroleum energy. It would be a major boost.
Another MDA does that. The Federal Civil Service can tell others even if they have not been given fuel. One of the things that we want actually is targeted empowerment. We have gone to meet some officers in the Lagos state government. We like what Governor Zulum is doing in Borno with targeted empowerment , using petroleum to some sectors. He said, farmers, if you want to move your product to the market, you can buy petroleum at a discounted price, so that the price of goods would come down. Our platform is the best to do it. There’s no other platform.If you are a conveyer of agri-product, go and enlist your van or bus on Fuelyapa , and then we will give you the voucher.
We will make sure that it is actually the vehicle that is getting the fuel and where they are using it to go. The government can have that for the transport sector. We are also doing something for schools.If you want to empower students that are going to primary school, secondary school, you can give them fuel in all the school buses in Nigeria. Our platform is the real deal.
We are doing something like that for agriculture. We are doing it for workers. You can say those that use their vehicle to take people to work can get fuel at half the price. The federal government can do it. You will see the joy. We need to speak to Mr. President.We are calling on Mr. President to look at what we are doing and see how we can have targeted, measurable impact on different aspects of the economy, and it will go directly to those it’s meant for.
Do you have intention to have a fleet of trucks branded in that name in the nearest future?
We had a discussion as a company. It’s something that we are discussing because we want to be focused. We understand the dynamics of the trucking business, and it comes with its own complexities. We don’t want to focus on too many things. A few days ago, I was called up by another state government for revenue collection. I have not responded to that call. The reason is that I prefer to focus on one thing. I have my general manager for tax I was trying to refer, but it required my attention. We don’t want to encumber ourselves with a lot of complexities.
For now, it’s an ongoing discussion. We don’t believe that there are not enough trucks. What we want to do is to create access, enable more Nigerians to get fast, unencumbered access to fuel at an affordable price. That’s our objective. We know that people need it. We know that there are villages where fuel is difficult to get. People should not suffer in their country. The irony is that some of these countries are oil producing and they cannot get PMS. We want to provide access to it.
Looking beyond the shores of Nigeria, Nigeria is a signatory to the African Continental Free Trade Area Agreement. Fuel is one thing Nigeria has the capacity to export. As we speak, the Nigeria customs have always had cause to seize petroleum products that are being attempted to be smuggled out of the country. Do you conceptualize the situation that Nigeria, through your platform, if approved, can be selling refined products to West African countries and other African countries?
That is our goal. As we have said, most of those products are smuggled. That’s why the customs are not allowing them to have a free deal. Some of them are connected to so many things that are not legal.We want to go through the legal route. We are pushing that. We have had discussions with countries like Gambia. They want us to replicate what we are doing in Nigeria. But we feel that we have not yet served Nigeria fully. It is not something that we cannot do simultaneously.
We want to really sell this market successfully. Give us a couple of months. You will see what we are going to do .We are not going to follow the route of some people that are doing it currently. Some of them are just pushing additional competitive products into certain African markets. We don’t want to go through that route. We want to go into the country, create better access as we have done in Nigeria, and then move products into it. That is our model. That is what we want to replicate across all the African countries. We believe that what we are doing is a strategic move for Africa.
There has been this emphasis on PMS. Is it only PMS you are involved in?
No, the reason for PMS is that it has the highest need, highest use. You use it in your generator, you use it in your vehicle, you use it in machinery, you use it to grind. Even people that do vulcanizing work, they use it. AGO is also part of it.As a matter of fact, as we launched our fuel station in Ibadan, about 300 trucks came to us to demand for AGO . As we speak, they have installed AGO pump in Ibadan for us.
They have paid for it, they have taken it. So, in one of our outlets in Lagos, we are right at the AGO market, and we have partnerships. As a matter of fact, we sell at dealer rates to major transporters that have luxurious buses. Nobody is doing that.Transportation has become so expensive in this country. It is unbelievable what people pay so much to travel inter-states. I couldn’t believe it when I heard it.
We are also partnering with most logistics companies. We have a lot of them that have registered on Fuelyapa . Some of them want to even pay us installmentally.They need the product.The demand is there, and we are ready to meet it. It’s one of our major products as well.
Lastly, what’s your message for younger persons who may want to be part of this drive, either as canvassers or marketers? How do you intend to bring them into this chain of productivity and economic emancipation ?
When we have people apply for our franchise, we usually ask a question. We ask them, why are you interested in this? There was one remark I heard from a lot of them. They said they just want to see change. The challenge of the petroleum industry affects both the rich, poor, and the extremely rich. I remember at a time that I saw people with some luxurious cars queued up to buy fuel. I said, well, the rich, are also suffering it. Some people that come to us, even to partner with us, say that they desire to see change. So, if you are a young person and you desire change, this is an opportunity for us.
If you are tired of paying an exorbitant price for PMS to travel, because they have deregulated this industry. I remember when we went to one of the refineries and we told them, this is how much we want to buy. They gave us a better price that is not advertised, because we came with demand. So, if we have much robust demand, we can go back to them and say, we came with 50 million per day. We want to do this per day and they offered a better price if we could take off.we are bringing down the price. If you join hands with us, we can bring down the price of products.
You can become an affiliate marketer. You can go to our website and see opportunities. You can come and work for us. We are looking for staff to help us to work. You can support us. You can share the news about what we are doing on your own social media platform. We have a referral program that you can earn money from by partnering with us. But you can also cheer us on from wherever you are, from whatever you are doing, and then see the progress that we are making.
