By Wole Oyebade
Afolabi
Dr. Taiwo Afolabi is the Chairman of Skyway Aviation Handling Company (SAHCO) Plc and the Chief Executive Officer (CEO) of SIFAX Group. In this interview with WOLE OYEBADE, Afolabi reflects on 12 years of investments in Nigerian aviation, touching on its challenges and prospects that abound, among sundry issues.
The apex regulator of the aviation sector recently gave the industry a pass mark. As an operator in the ground-handling sector, do you agree with the good rating?
There has been a great deal of improvements and innovations in the sector. I will mention one, which is airport infrastructure. The Federal Government in the last few years has embarked on massive remodeling of various airport terminals across the country, especially in Lagos, Abuja and Port Harcourt.
As the gateway to the country, our airports tell a lot about who we are as a nation. The remodeling has really done the image of the country a lot of good. I give kudos to the Minister of Aviation, Hadi Sirika, a consummate professional, who has done so much to move the industry forward since his appointment in 2015, and I think the development in the industry during his tenure is primarily due to putting a square peg in a square hole. He has valuable experience and knowledge about the industry being an aircraft pilot. As a major shareholder in the Skyway Aviation Handling (SAHCO) Plc, I can tell you that the minister has actually motivated us to invest more in the sector, thereby contributing our own quota to the growth in the industry in the last few years.
The SIFAX Group acquired the Skypower Aviation Handling Company Limited (SAHCOL) some 12 years ago. What was the motivation?
We considered the aviation sector as big, given that Nigeria is a key market in Africa that almost every foreign airline wants to fly into. Before SIFAX Group acquired the company in 2009, the Nigerian Aviation Handling Company (NAHCO) Plc was the sole company that was really playing and investing massively in the ground-handling sub-sector of the industry. That was the motivation for coming into the industry.
We believe that one ground handling company cannot do justice to the expanding industry. We saw the opportunity to be part of making the sector great through the privatisation of SAHCOL. We saw the need to improve the practice of ground handling in the country through efficient and professional service delivery that match international standards.
Even though the experience has been interesting, it comes with its challenges. However, we have no regret about the decision 12 years down the road.
Did you ever consider divesting your shares in SAHCO in the face of challenges?
I will say yes and no. Yes, when we took over the company and were confronted with the magnitude of investment we needed to make to be competitive. We needed to build infrastructure and acquire modern ground handling equipment as well as motivate the staff for productivity. I then realised it would take more than the projected duration to recoup our investments. An average investor believes that return on investment should not be more than five years, but I must tell you, I have invested over N30 billion in SAHCO as of today and hardly have I got N2 billion back from it. An average Nigerian businessman will not usually venture into such an area.
Also, I will say ‘no’, because the acquisition of the company was a key part of the overall strategy of SIFAX Group to expand our investment and deepen involvement in various sectors of the Nigerian economy. As a businessman, I believe in the long-haul strategy and do not go into a business simply because of quick returns. There are other motivations that determine our investment portfolio. I personally believe that we need to invest for a longer period and in the process make an impact, contribute substantially to the development of the industry, before we start recouping your investment.
The reason the Nigerian economy is not vibrant as it ought to be is because someone wants to invest today and start making money almost immediately. Abroad, businesses invest for the future and return comes eventually. That is my philosophy and that has been our story at SAHCO. We are still investing and we believe the future will be kind to us so we could recoup our investment.
I will also want to let you know that whatever I put my hard-earned money into, I follow it up and I have never regretted it because I put all my efforts into it. I have seen the future and invested into it, but an average Nigerian investor will not do that. Everybody wants to recoup his or her money within five years, but I can assure you, we have not done that after 12 years. I have not made up to N2 billion from SAHCO, but what gives me joy is not really about the money. It is about creating wealth and jobs for Nigerians. That is what gives me joy and the motivation to continue.
One of the clogs in the wheel of ground handling business is the appropriate rate that is commensurate with services rendered. Are the operators ready for the new safety threshold handling rates?
Two key things are important in the aviation industry; safety and service delivery, and no ground handling company wants to compromise on these. To improve our service offering and not compromise on safety and remain in business, the ground handling companies formed an association – Aviation Ground Handling Association of Nigeria (AGHAN) – to address some of the lingering challenges that we all face.
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