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Adiatu Adeyemi

NIGERIA - Energy & Mining

Imports approximately 20,000—40,000MT of products each month

Managing Director, Tulcan Energy Resources Limited

Bio

Adiatu Adeyemi is a businessman with over 20 years of experience. He holds a bachelor’s degree in pure and applied chemistry as well as an MBA Marketing degree from Ladoke Akintola University of Technology, Oyo State Nigeria. He is a member of professional bodies such as ASME, SCSN, and CSN. He is currently running the Owner/President Management (OPM) program at the Harvard Business School in Boston, US. He has successfully managed various business projects ranging from construction projects to engineering, construction, procurement projects, and petroleum trading transactions. He has garnered substantial knowledge of various industries across the continent of Africa which cuts across the oil, services, and construction industries. To constantly update his knowledge and engage with professionals in similar fields of interests, Mr Adeyemi regularly attends the annual Offshore Technology Conference (OTC), which holds in Houston, US. He chairs the board of several organizations and has been pivotal in implementing effective fiscal controls in these organizations.

"We actively import approximately 20,000—40,000MT of products per month (mainly ATK and AGO)."

What were the main drivers behind the establishment of Tulcan in the downstream energy sector?

Prior to Tulcan, I worked with Negris Limited. It is an oil and gas service company. My experience in Negris endeared me to the oil and gas industry. I have my first degree in BTech Chemistry where I focused on industrial chemistry. This qualifies me for both downstream and upstream sector of the oil and gas industry. I ventured into the construction industry in 2004 and remain active in that sector till date. In 2010, after my MBA program, I decided to return to the oil and gas sector. Having better but limited knowledge of the industry, I approached a friend for partnership and support to set up a company. After much deliberation and consultations, we agreed to work together. We also agreed to start with trading in the downstream sector which was less regulated. Tulcan Energy Resources Limited was registered in 2011 and operations began after this. It is worthy of note that the downstream operations require extensive experience, funding and asset ownership to support/enhance reasonable trading.

What is your position in the market now?

Looking back, I will say we have done well. Most of our decisions and actions have paid off. We have taking advantage of opportunities in the country that we never knew we could. It was not easy; however, we made up our minds not to quit. We had to deal with regulators in the government and from clients. Funding was another tough point; at some point, our funds got depleted, due to devaluation and volatile prices of product. We also depend on bank support. In order to get that support, we will have to get approval from the government and the stakeholders. We transited from bulk buying and depot allocation trading (which we started in 2011) to becoming an importer with focus on the local market. We started working with licensed depot owners to get direct allocations from Pipelines and Products Marketing Company (PPMC) which has allocations for almost 6 million liters monthly. We paid upfront and then sold directly without having to go through importers. We started importing directly since 2013. At the moment, we actively import approximately 20,000—40,000MT of products per month (mainly ATK and AGO). Although it was not easy to obtain licenses, permits, funding, and bank lines to execute the import but we managed to get it done all the same. So, I will say we are active in the industry and we are still striving to do even better.

Nigeria relies heavily on foreign countries when it comes to finished, refined products. What is your vision for the sector to become self-sufficient?

A solution is on the way, though it may not be enough. Nigeria has great potential; however, its refineries are not working efficiently enough to meet the needs of such a heavily populated country. A recent solution in the pipeline is the Dangote Refinery, which might come on-stream in 2018/2019 or 2020. We are working to see where we can collaborate with refineries and help them get the products out. It is quite competitive; however, we are working out a structure where we can play a role in supporting refineries by buying some of the refined products and blending them further. It is doable, but will take a great deal of persuasion and strategies. In that way, we can play the role of an important distributor. One day, perhaps we may not need to import anything if we are able to put all of the products we are already producing to good use thereby becoming exporters as a nation. The simple model we seek to work on is either being able to use enough raw material directly or synergizing between companies to make sure we get what we need. If we achieve that as a company and other companies do as well, Nigeria will export more than it imports. If we can locally refine enough products for the local market, it goes without saying that the scale of operations will be large enough to then export as well. That is where we would like to operate, as a company and as a nation.

What is it like to do business in the downstream sector in Nigeria?

It is definitely challenging and very tough, though it is interesting as well. The challenge is to gain a place in the market and there are many steps to take before companies can have access to imports. There is a great deal of regulations and government bureaucracy to pass before you can be approved. Furthermore, bank support is also very necessary. If companies have the integrity and transparency to convince a bank, they must also demonstrate that they operate with best practices and certain standards. Getting all of that in place is challenging. However, if the company is set up well to do business, it will not see much problems. In fact, there is plenty of room to capitalize on opportunities in Nigeria and expand to other points of Africa from here. We have a great deal of credibility by operating in Nigeria, and that is exportable to the East African Community (EAC) which we are exploring at the moment.

What do you expect for 2018?

2018 will be a pivotal year in Nigeria. We have an election coming up and we typically see great transitions between parties. It was a peaceful and fair election the last time. However, we do not know what lies in wait for 2018 and beyond. As a promoter of business, we are prepared for any shock. In terms of government and election procedures, we do anticipate some ups and downs and are getting ready to weather the storm. The major challenge in our business is foreign exchange; most of our trades are priced in dollars. In 2016, the Nigerian currency was affected greatly. The great thing is that the Central Bank of Nigeria (CBN) has been able to come up with methods that minimize our exposure. We are not buying dollars on the stock market directly; however, with the support of our banks, we can trade at rates that are flexible and competitive for a year. However, the CBN takes care of 50-60% of our risk as a company. We are not all the way there yet, but are on the way. The government is more than committed to improving the country. As an entity, we can also play our part to make things better; we cannot just leave it to the government. Leadership is a collective role. We strive to continue our own path as a company as part of the country. That is the same way I operate my business; I reach out to my team for advice and guidance so that we can work together toward a common goal. We like to be compliant and focused; we will never ever be involved in any form of corrupt activity.

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