Guardian

Yesterday marked exactly 20 years since Red Star Express started business operations in Nigeria. Over  the period, the company has transformed from a small private company with about three million naira revenue to a public limited company worth over five billion naira with shares quoted on the Nigerian Stock Exchange.  In this chat with NTIA USUKUMA, The CEO, Sule Bichi, shares memorable events that have kept the company strong in the past 20 years

BUSINESS seems so good since you started 20 years ago, what has been the contributions of Red Star to the community in which you have operated the last 20years?

CSR has always been an area very dear to Red Star. We started informally by donating intermittently to schools, motherless babies home etc., but in 2004, we decided to establish Red Star Foundation that will solely focus at providing corporate social responsibility on behalf of the company and funded by Red Star Express. We started the foundation initially by just offering scholarships to indigent students particularly in areas where we operate. The Red Star Foundation also draws its funds from the staff contributions as well. The foundation is a corporate legal entity so it can deliver services on its own name as well. Apart from Oshodi-Isolo Local Government in Lagos State, we have opened similar scholarship in Kano and River States. We also have schemes through which we take assistance to motherless babies homes in Lagos and outside Lagos. There was a time we created a programme tagged ‘I Care’ where we encouraged staff to donate things like clothing and household items, and these things were distributed to people. For our 20th anniversary, we have started already by visiting so many notable homes in Lagos and Kano.

What is the objective behind your theme for this year charity initative “Let’s make a difference?

It is an opportunity for us to give back to the society. Prior to the setting up of the Foundation, we drew a lot of benefits from the society and by way of giving back- and to be socially responsible, we have decided to be doing this permanently. To that extent, we requested the board and shareholders to give a portion of their profit for that course.

What are great memorable experiences of Red Star you would like to share from the company’s last twenty years of existence?

The company has come a long way from its humble beginning through thick and thin. When we started, it was with a big bang in a robust way, before then we thought this type of services could only be made available by international organizations. As a Nigerian company, our founding fathers believed that Nigerians have the capacity to offer the services that can be rated with the international multinational organizations. When we started at the beginning, it was challenging, we borrowed a lot of money and unfortunately, it was when the financial sector was very turbulent, this was around 2003, 2004. Then, we had borrowed a lot of money to buy over 40 vehicles; we rented offices all over the country matching the spread the old courier companies had. Unfortunately because of the financial meltdown interest rate skyrocketed, at a time interest was over 60 percent per annum. The interest became heavy for the company so we made a lot of financial losses. But we were able to go through that with the support of the founding fathers, recapitalization was made and the staff sacrificed a lot. The suppliers were very patient with us, all of these just to sustain the organization. For the first 2-3years, there were no profits but we survived, after that, the company recapitalized and more resources were brought in, we started making money. And since we started making profit in 1996, we have been posting profits consistently up till date. In 1997, the company started paying dividend and since then, we still pay.

Are You the First CEO?

Red Star Express has had four managing directors; the founding managing director was Mazi Sam Allison, who is still on the board. After him, we had Late Toyin Ofuani and Isaac Arologbagbe. I became the Managing Director in 2007 and have been running it ever since. We have diversified our operations from just a courier firm to a one-stop shop logistics provider; we have diversified into logistics, freight, and support-services. The subsidiaries were established as growth platform, and we have been recoding successes since they have established.

What is responsible for the stability in terms of management and staff loyalty, what makes Red Star Express company a preferred place to work?

The company’s philosophy has always been PSP; people, service, profit. The philosophy focuses on people. First, we choose people that are very good both in their capability and attitude, then give the necessary training that are required to offer efficient services to the customer. When staff welfare is paramount and staffers are well trained, they will offer excellent services with good attitude. When customers are getting the best value for what they are paying for, they will be happy to associate with us and they will be loyal to us. And this translates to profits, which is the second P-profitability. We are law abiding, and we ensure we pay our taxes as at when due. As a result of these, the government is on our side and it gives a good working relationship with the customers, government, shareholders, and the general public and of course the media.

In retrospect, looking at the last 20years and the vision of your founding fathers, has Red Star achieved its target?

For Red Star, it is a journey and not a destination. The objective of Red Star is that the company out-lives any individual, where we can always make reference to generation as the best place to work anytime any day. Initially, when the founding fathers started the company their goal was to be ranked number No.3 in the space of three years, and Red Star became No3 Company in less than a year. So that aspect was achieved.

In the past, we looked back to see what was our essence, and we had strategy sessions to articulate what the company’s vision and mission were, this was way back in 1997 and another one in 2003 which was tagged ‘vision 2008’. In 2010, we had another strategy session, which reviewed our vision and mission. Presently in Red Star, our vision is to be a one stop-shop known for best global practices.

There are opinions that the Internet, GSM and other tools of technology are negatively affecting the courier industry. What is your take on this?

It is all going to aid our business; technology opens the opportunity for people to cross barriers and access global market. The courier logistics company now serves as the go between. The era of small letters is gone, other vistas of opportunity are opening up, for instance, when people order for things with aid of internet, GSM and other telecommunication gadget from a distance and an online payment system that gives an opportunity to examine, buy and pay for it. Then how would these items get across to the buyers? This is where the courier companies show their relevance. So, the potentials are just opening up, especially with the increasing usage of telecommunication facilities and the Internet

Foreign courier companies are still the market leaders in the courier sub-sector of the economy. Do you foresee a time when local organizations will be slogging it out with these so called big companies and are there any plans to extend your reach beyond Nigeria?

It is true there are foreign companies operating in Nigeria such as FedEx, DHL, UPS and TNT. As at the last count, we have over 250 registered courier companies in Nigeria with the courier regulatory department of NIPOST. These indigenous Nigerian companies are working to grow like Red Star. We have association with the global companies because we also want to have global reach. If you look at the way logistics are, companies are making alliances all over the world; no company is single.

This is the same way FedEx is having an alliance with Red Star to have the Nigerian reach. Red Star within the FedEx network is reaching out to other places around the West African coast such as Ghana, Togo, Sierra Leone, Ivory Coast and Benin with different licensees called Global Service Participants (GSP). However, there are other services that may not fall within the network but which we are working out to activate. An example is sea freight, which is not covered under the FedEx arrangement for now. We are working out gradually, modalities of sending things through the sea and road to reach other West African countries and vice versa. Red Star is growing and the objective is to be a one-stop logistics service provider known for global best practice.