30 April 2004
Lagos — The nation's shipping industry has continued to record some growth as an indigenous maritime company, Japul Limited would soon be quoted on the stock market. The company was last week presented to the National Maritime Authority (NMA) by the Marine Club of Port Harcourt, Rivers State. Correspondent WILLY EYA reports.
HOW to raise capital has remained one of the greatest challenges to indigenous operators in the nation's shipping sub-sector. Despite the apparent opportunities in the industry, many entrepreneurs in Nigeria are hesitant to do business in the sector because of the usual huge capital required. It is not surprising that about 95 per cent of the shipping business in Nigeria has been under the monopoly of foreign operators or ship owners.
Surprisingly, Nigeria accounts for about 60 per cent of the total shipment leaving West Coast of Africa to European countries. In 1958, Nigeria made moves to establish a Nigerian Merchant shipping line to give opportunity for Nigeria to participate in the lucrative business of shipping. Subsequently in 1959, the Nigerian National Shipping Line (NNSL) was incorporated and it started business with four second hand vessels. The fleet grew to 27 vessels in 1987 but later got liquidated. In its place now is the National Unity Line (NUL) with only one vessel.
However, there are about 122 registered shipping companies in Nigeria all of which depend mostly on chartered vessels to carry their own share of cargo. Presently, Nigeria has not been able to carry 40 per cent approved by UNCTAD of cargo in and out of her ports. All these are in spite of the National shipping policy and the establishment of National Maritime Authority (NMA) to implement the UNCTAD code of conduct.
Many operators believe that the shortfall in indigenous participation in shipping activities in Nigeria had been caused by the capital intensive nature of the industry. Many lack the requisite capital to venture into shipping.
However, Nigerians who appear genuinely interested in becoming serious shipping and maritime players have continued to explore more creative ways to raise capital that would help their business flourish.
In no distant future, one of the nations maritime companies, Japul Limited will be listed in the Stock Exchange. The company has put together all plans to raise money from the capital market and the name is presently being changed at the Corporate Affairs Commission to Japul Oil and Maritime Services Limited.
Giving the company's background and future plans at a visit to the NMA, its Managing Director and Chief Executive Officer, Mr. Abiodun Jegede said Japul commenced operations in 1997.
He said the company since then has been rendering maritime related services to the oil and gas companies in the Niger-Delta region.
According to him, Japul started with a small barge of 300 tons in 1997 but presently has a total of 18 marine equipment in its fleet including two Sea Going Vessels used for both towing and anchor-handling operations in the oil field.
He explained that the company has grown over time from having N18 million turnover in 1998 to having a turnover of N435 million with a net profit of N93 million as at December 2003.
The vision of Japul, he said is to build a viable business that will not only outlive the promoters but make impact in the Nigerian maritime industry to the extent that it would command world attention.
He said the attention would be in the area of ship building and ship operations, oil and gas marine support services and other maritime services.
Mr. Jegede noted that building ships remained a big dream but assured that the company would achieve that feat.
"We have started with building of a tug boat and we shall grow to the height of building ultra large vessels including ones that can carry crude oil for this country," he reassured.
He said the company has put together all plans to raise money from Stock Exchange stressing that Japul's financial advisors, NAL Bank Plc and Valueline Securities were presently packaging the organization for public offer.
The Japul boss stated that the company was the first maritime outfit to be listed on the Stock Exchange assuring that any investor that shall put his money in the venture will be making a good decision. According to him, the initial public offer (IPO) will be concluded by July 2004.
Presenting the company to NMA, the maritime club which Japul is a member charged shipping and maritime practitioners in Nigeria to develop ways and means to raise money for their business.
President of the club, Dr. Chinedu Ogbuagu described the stock market quotation as one of the most realistic and viable option to raise investment capital for the shipping and maritime industry.
He said that the Federal Government has over the years assisted the maritime industry in Nigeria to move forward and stated that the latest is the passage of the Cabotage Bill into law.
Dr. Ogbuagu commended Japul Limited for its name to be quoted in the stock market arguing that it was the first maritime company to achieve that feat.
He charged other operators to follow the example of Japul and emphasized that the industry should depend less on insufficient government grants, soft loans and costly bank facilities.
The club's president prayed that at least five to 10 more Nigerian shipping and maritime companies would join Japul to be quoted in the Stock Exchange.
The Maritime Club which is based in Port Harcourt is a social organization which aims to bring together shipping and maritime practitioners in a family atmosphere.
The club champions all causes of the shipping and maritime industry in Nigeria.
Part of the mission of the club is to provide conducive atmosphere for social interaction among members and associates in business of ship building and ship repairing, port operations, jetty and dock operation, maritime regulation, marine security and safety operation.
Others are people in House boat ownership and operation, Customs operation, dredging, salvage and rescue operation, maritime education and training, shipping law and finance among others.
Receiving members of the club during the presentation of Japul, the NMA Director, Mr. Ferdinand Agu stated that evidence abound that the citizens were responding to the development efforts of the present government.
He commended members of the maritime club for having a member that has grown to the level of being listed in the Stock Exchange.
The NMA boss said that what Japul had done was an expression of indigenous patriotic capacity and noted that Nigerians were really facing the challenges in the nation's shipping industry.
He stressed that making Japul public through the Stock Exchange was laudable and assured the company of its full support.
Mr. Agu urged more maritime companies to go public and emphasized the need for other indigenous operators to face the challenges in the nation's maritime industry.
Also speaking during the presentation, an officer of the Valueline Securities and Investment Limited, Rev. Erem O. Erem explained that when Japul approached the company, it went through the records and noticed that it (Japul) did not only have a high turnover but was making a lot of profit.
He said Japul has a bright future assuring that it was a kind of organization that investors would look out for.
Rev. Erem however expressed regrets that many people were yet to know about the opportunities in the nations maritime sector.
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