The fast-paced oil and gas industry comes with a number of opportunities and challenges. As a leading figure in this sector, Satish Kumar, Chief Executive Officer of Petrofuel Limited, highlights these and many more in his exclusive interview with African Leadership Magazine. Excerpts:
- Entrepreneurs in Africa face some of the harshest business conditions in the world. Tell us more about growth phases and how you have managed to stay in business for this long?
Adapting to changes at the precise time is what keeps anyone and anything relevant. An idea, no matter how unique, will remain redundant unless executed perfectly. A proper balance in execution of ideas and adapting your strategy based on market conditions are the two major reasons for our success.
- Access to capital has also been described as a major impediment to the growth of business in Africa; how have you been able to sustain your expansion drive-seeing that PETROFUEL Limited operates across East Africa?
Mobilization of funds are always the major constraint for any business regardless of its size. Add to that, the stringent banking policies, and you get a recipe for disaster. Banking needs to be more flexible and pro-business if the continent wishes to attract investors. Providing astronomical securities for securing banking facilities is one of the major reasons hindering the growth of the market.
Our unique business models, reputation and track record has helped us secure capital for growth. Our steady growth has helped increase the confidence of the banks in our business.
- As a major player in the oil & gas industry, your ability to build your business is a testament to the ingenuity and determination of the African Entrepreneur. One of the challenges budding entrepreneurs are faced with today in their pursuit, is the lack of access to finance. As a successful businessman in Tanzania, kindly share with us some of the ways the continent can improve access to finance.
The banking sector in Africa needs to adapt itself to the changing environment. It is time to look past old-school operational procedures and understand that in this day in age, ideas are worth billions. Successful businesses, who have a very good track record of tax contribution and are the major powerhouses of the Country should be considered by Government as the most preferable companies of the Nation. In these cases, the Government should consider implementing some reduction in guarantees so that these giants can diversify their operations and provide further job opportunities. Even new entrants with a very good track record may fall under this bracket.
Finances should be made available if the business model if convincing to the banks and regulators. Rather than coming up with 150% security on the financial requirement, the banks ought to keep in place, strict measures to ensure that the investment is well managed. This can help the start-up companies in their growth.
Banks ought to improve their relationship with other international banks in order to approve global security for providing banking facility. They should also ensure that their interest rates are competitive and help sustain businesses rather than hinder its growth.
The banking sector should make a comparison with the emerging economies like that of China, India, South Africa, Brazil etc.
- 2015 saw a lot of African countries experience economic crisis and recession due to the drop-in oil prices. How did this affect your organization and the industry in Tanzania?
This economic crisis did not affect the East African Zone as much as it did to the other parts of the World. Mainly because, Tanzania and other East African Countries are not directly affected by rising oil prices. This is because most, if not all businesses used to operate with a substantial margin. During this crisis, the margins shrunk. However, businesses were still very much viable.
- Please share with us some of the successes of the corporate social programs of PETROFUEL Limited, aimed at giving back to the society.
Petrofuel Group provides equal opportunities to both men and women. Over 50% of our top and middle management positions are occupied by females. Considering the prevailing conditions in Tanzania, Petrofuel’s hiring strategy also accommodates individuals with minimum educational background. We provide in-house training which help these individuals obtain a higher level in the organization through continual learning.
Petrofuel gives back 10% of its annual profits back to the society through various charitable initiates such as educational loans, medical assistance, providing clean water and improving living standards in low-income neighborhoods.
- How do you feel being conferred with the African Leadership Oil & Gas Business Leader of The Year Award?
I am honored to have been bestowed upon with this recognition. I am not one to measure my success through awards and recognition, however this awards reassures me that I am moving in the right direction.
It is not me, but my organization and my 200+ employees who have won this award. They are the Business Leaders of the Year.
