The logistics business has endured significant disruptions in the past two years, starting with the Covid-19 pandemic lockdowns of 2020 to the ongoing Russia-Ukraine war.
Meshack Kipturgo, the chief executive of Siginon Group, discussed with Business Daily the impact of the Russian invasion of Ukraine on the company’s business and where it is with its expansion ambitions.
WHAT NEW OPPORTUNITIES IS SIGINON GROUP EXPLORING IN THE LOGISTICS SPACE?
The biggest logistics company in the world today is Amazon. E-commerce is a new frontier for companies like us. There are a lot of innovations that have come up globally and we are aligning to ensure that we take advantage of these developments to deliver value for our customers.
At the moment we are tapping into information technology with a view to positioning Siginon as the logistics group of the future.
WHAT IS THE IMPACT OF THE RUSSIA-UKRAINE CONFLICT ON LOGISTICS BUSINESS IN EAST AFRICA?
The ongoing conflict between the two countries has once again negatively impacted the global supply chain and the logistics industry more than one can imagine. With the conflict seeming far from over, the challenges in moving goods and services might worsen.
To put numbers into perspective, about 374,000 businesses across the globe use Russian suppliers, while about 241,000 businesses use Ukrainian suppliers.
According to statistics in the Dun & Bradstreet report, about 91.5 percent of these companies are based in the United States of America, but the aftershocks are being felt worldwide.
The raging conflict has had its effects spread beyond both Russia and Ukraine and significantly disrupted the global shipping and freight sector.
IS THERE A DROP OR AN INCREASE IN DEMAND FOR CARGO SHIPMENT ACROSS THE MARKETS WHERE YOU OPERATE DUE TO THE UPCOMING POLLS IN KENYA IN AUGUST?
With the upcoming polls, we have seen some countries getting concerned and they are now shipping cargo from Tanzania to Uganda. However, to us, this is an opportunity that has come along our way.
It gives us an opportunity because we are picking up the cargo in Dar es Salaam for onward shipment to Uganda. As we speak, there is demand for fuel to be transported from Dar es Salaam to Uganda and we are moving that cargo.
TO WHAT EXTENT HAS THE INCREASE IN TOLL CHARGES ACROSS THE MARKETS WHERE YOU OPERATE IMPACTED YOUR OPERATIONS?
The road toll charges imposed by countries in East and Central Africa are too high. In our case, we have been forced to pull trucks out of the Dar es Salaam-Lubumbashi route due to hefty road toll charges levied along the corridor.
It has become unsustainable to pay $1,670 (Sh195, 724) in road toll charges when moving a truck from Dar es Salaam to Lubumbashi — the third largest city in the Democratic Republic of Congo.
It’s time leaders across East Africa region sat down to harmonise the road toll charges imposed on truckers in the region to promote trade.
KUWAIT’S NATIONAL AVIATION SERVICE (NAS) IN OCTOBER 2021 SIGNED A STRATEGIC PARTNERSHIP AGREEMENT TO ACQUIRE A 51 PERCENT STAKE AT SIGINON AVIATION. WHAT INFORMED THIS MOVE?
This was a strategic move. We have been looking for a strategic partner because we want to grow our footprint beyond Kenya, so we looked for a player that we believed can grow with us.
After scouting for several partners, we settled on NAS who we believe is the right partner who will help us achieve our strategic objectives. The partnership comes with benefits such as growing the capacity and enhancing the exposure of local employees to a more regional outlook and vice versa.
WHAT DOES THE FUTURE LOOK LIKE FOR SIGINON GROUP IN THE REGION?
We are working overtime to expand the Siginon footprint in Africa. We have been doing a lot of studies in Nigeria, and Egypt among other markets. The aviation arm is always looking for opportunities within airports in Africa. So if tomorrow an opportunity springs up for us in Togo, for instance, we’ll seize it with both hands.
In five years we hope to be present in many countries around Africa. We are actively seeking opportunities within and outside East Africa.
We are already very active in Tanzania and Uganda and we have warehousing, trucking, and distribution facilities in those countries. We will keep expanding.