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Oando Marketing – A new WLPGA Industry Council Member

Sunil, thank you for taking the time to talk to us.  Please could you tell us a little about Oando and its key activities in the LP Gas market?

Oando PLC is the largest, indigenous, integrated energy group in sub-Saharan Africa. Oando is listed on the Nigerian and Johannesburg stock exchanges. The total revenue in 2012 was over USD 4.4 billion. Oando’s operations include upstream, midstream and downstream activities from exploration and production through distribution to marketing and supply & trading.

Oando Marketing PLC (OMP) is a fully owned subsidiary of Oando PLC. OMP has successfully established an unparalleled distribution footprint across Nigeria and parts of West Africa with over 546 retail outlets and is recognised as a an organization offering customised value-adding solutions to meet the needs of numerous customers.

Within the LP Gas market, OMP is one of the leading operators with its vast distribution network. OMP operates across the full value chain of LP Gas from product supply, bottling, logistics and retailing to providing technical solutions for safe and efficient LP Gas operations. OMP is credited with having taken many innovative ‘Go To Market’  initiatives in Nigeria – some of these being ‘Pay As You Go’ (PAUG) offering customised cylinder filling at retail stations, 3 Kg cylinder and stove offering for ‘Bottom Of Pyramid’ segment of the society and deposit scheme for cylinders.

Could you tell us about your role within Oando and what career path brought you here?

I joined OMP in 2011 and my key role is to develop strategies and execute plans for tapping the vast potential of LP Gas in Nigeria in a safe and sustainable manner. These responsibilities include creating product awareness, developing new sales channels and opportunities, marketing, securing supply of LP Gas and associated equipment, logistics, distribution and managing stakeholder relationships.

I have been an oil & gas industry professional throughout my career of about 30 years. I started my career at Mumbai (India) Refinery of Bharat Petroleum Corporation and moved to Technical Development under the Marketing Division. I joined a Shell JV in India as Sales & Technical Manager during their LP Gas business start-up phase where I was responsible for setting up the sales and distribution organisation and infrastructure. I also attended the LP Gas Business program at the Shell International Academy which gave massive insights in to the markets in Europe, Africa and South America as well as recommended best practices. In 1999, I joined SHV Energy, India and was Business Head of their North-West India SBU for over 5 years before moving over as VP to manage Supply and Logistics and later Operations, HSE and Projects.

What do you see as the key challenges in the Nigerian market today?

The challenges being faced by the Nigerian LP Gas market are quite extensive and multi-dimensional. Nigeria is the sixth largest producer of crude oil and has vast reserves of oil and gas and produces over 3.5 million MT LP GAS annually. However, Nigeria’s consumption of LP Gas in 2012 was only around 150,000 MT and has one of the lowest per capita (~ 0.8Kg) consumption in the continent.

Some of the major contributing factors to this low consumption and poor growth have been inadequacy of regulatory standards as well as their poor enforcement, low awareness of safety aspects and rampant unsafe operating practices including cross filling, high duties/levies on equipment, poor infrastructure for storage, bottling and distribution. There is a large population of old and unqualified cylinders/equipment in the market and consumers also perceive LP Gas as an unsafe product. Lastly, overall high cost of LP Gas vis-à-vis heavily subsidized domestic kerosene has also severely affected the growth of LP Gas. However, the heartening fact is that amongst the regulatory agencies as well as the organized marketing players, the need for urgent reviewing of standards and operating practices and their efficient enforcement is recognised and steps for revision have already being initiated.

And what about the principal opportunities for Oando at the moment?

Nigerian economy is growing at a steady rate of over 6% per annum and there is a growing middle income group as well as gradual urbanisation. Kerosene, charcoal and firewood are the most common fuels at present. Deforestation, indoor air pollution and resultant health hazards are at worrying levels. There is an increasing realisation as well as need for switching over to safe, clean and convenient fuel like LP Gas. Keeping various factors in view, the Nigerian LP Gas market is certainly poised for a substantial growth in future. Oando believes in this vision and is making significant investments to strengthen its presence across the entire value chain from bulk storage, bottling, distribution and marketing to improving consumer awareness. Oando is specifically focusing on the BOP segment for switching from the dirty fuels to clean and green fuel in a safe and sustainable manner.

We warmly welcome Oando as a new WLPGA Industry Council member – what benefits do you see as joining the Industry Council and what do you hope to gain from this powerful network?

WLPGA is doing a commendable work globally and being invited to the Industry Council is a privilege. The Industry Council consists of LP Gas leaders with vast knowledge representing some leading organisations. Surely, experience and knowledge sharing in such a forum would give a lot of opportunity to learn about new developments, best practices, new technology and applications etc. In addition, it also provides great opportunity to contribute towards preparing strategies for influencing key stakeholders for promotion of cleaner and eco-friendly fuels especially in emerging markets.

Exceptional Energy brand and Cooking For Life campaign initiated by WLPGA are indeed commendable and are a strong medium to highlight health hazards related to smoke and indoor air pollution caused by use of traditional dirty fuels. I believe these are excellent platforms to enhance awareness amongst key policymakers, regulatory agencies and opinion leaders about the socio-economic impact of health improvement, women empowerment and environment preservation.