MANAGING DIRECTOR’S FOREWORD -2016
I am profoundly delighted to welcome you all to the 13th Annual General Meeting [AGM] of NIPCO PLC. The event provides a veritable opportunity to appreciate the unalloyed supports and cooperation of our esteemed stakeholders in the 2016 financial year as well as giving an insight into the future of the company.
Today’s meeting will also serve as an avenue for feedback from the public especially the shareholders; majority of whom are customers of the company through their respective oil marketing companies.
2016 IN PERSPECTIVE
The year 2016 was very challenging on all fronts with the Federal Government officially announcing a recession in the nation’s economy, a feat that greatly affected the socio-economic life of the citizenry. The recession, which was a fallout of the decrease in the level of crude oil production in the country and the sliding price of the product in the international market, greatly affected the amount of forex available to fuel trading and marketing companies to import petroleum products.
The year also witnessed increase in the pump price of Premium Motor Spirit (PMS), popularly called petrol, from N87 to N145. This took a toll on consumption of the product by motorist and other users.
Although the year was very tough on the economy, NIPCO made spirited efforts to reduce the impact on its customers. We continuously provided petroleum products to grow their businesses. We prepared ceaselessly for the expected harsh operating environment by focusing on effective management of resources available to us and adjusting our business model to the changing market variables.
We were able to maintain our growth pattern especially in the realms of deregulated petroleum products namely Automotive Gas Oil [AGO] and the Liquefied Petroleum Gas [LPG] through improved sourcing. The quality of our Management in the year under review, enabled us steer the challenges that persisted in the sector.Our human capital remains the most precious and valued asset. We placed a lot of premium on our workforce as our efforts in 2016 were the end results of their painstaking actions to key into management directives on the growth pattern of the company.
The company took the entire industry by storm on October 19, 2016 with the announcement of the acquisition of ExxonMobil’s 60% equity in Mobil Oil Nigeria plc (MON), which had remained a major turning point in the history of the organization and the industry at large. The deal was not only a monumental achievement but also a feat that has put us in the forefront of the industry. The acquisition is also an indication of the confidence and belief NIPCO has in the nation’s economy even in a recession.
AWARDS & RECOGNITIONS
A plethora of awards and recognitions were bestowed on NIPCO PLC in 2016 in affirmation of its preeminent position in the industry. The company received double recognition at the prestigious Oil and Gas innovation awards organized by BusinessDay /Oval Energy for its seamless operations, effective handling, storage and distribution of petroleum products across the country. We also emerged the best safety compliant and cleanest terminal for the fourth consecutive time.
This award of excellence for downstream operators is from the Nigerian Ports Authority. The Federal Ministry of Environment recognized the company for its consistent support and sponsorship of the Annual World Environment Day Celebrations.
In the realm of Corporate Social Responsibility, NIPCO boosted its list of beneficiaries by offering material assistance to SOS Children’s Village, Isolo, Lagos State.
FUTURE OUTLOOK
With the benefit of hindsight into the global and nation’s socio economic situation and with particular reference to industry challenges in 2017, our main priority remains the sustenance of our moderate performance.
The basis of our growth pattern over the years is the investments on both human and material resources. This has manifested in the recent expansion of our white products storage capacity as well as the ongoing construction of LPG spheres. These spheres will, when completed, push LPG storage to about 10,000MT this year.
The year 2017, which may be a very critical year for the industry, however looks very promising with the concerted efforts of the government and other stakeholders in bringing the economy out of recession. The upward movement of crude oil prices in recent weeks is another pointer to the good things about to happen on the socio economic front. The ongoing dialogue between the Federal Government and Niger Delta militants on the need to stop vandalization of crude oil installations is a good omen.
APPRECIATION
It is pertinent to recall that this year marks the sixth year since my assumption of office as the Managing Director of our great Company and I will like to use this avenue to thank our esteemed shareholders for the wonderful cooperation received since assuming the mantle of leadership. You have stood by my management by virtue of your investments and continuous patronage of our lines of business.
Special thanks also goes to our numerous stakeholders including Ministry of Petroleum Resources, Nigerian National Petroleum Corporation [NNPC] and its subsidiaries, the Department of Petroleum Resources [DPR], Petroleum Equalization Fund [PEF], Central Bank of Nigeria [CBN], Standard Organization of Nigeria [SON] among others, for their support, which has contributed to our success story so far.
Special accolades must go to the Board of Directors under the leadership of Chief [Dr] Bestman Anekwe for providing broad guidelines on how the company is administered in line with good corporate governance.
Once again, I thank you all for your support and patronage, which is the force behind our Company’s growth thus far.
Venkataraman Venkatapathy,
Managing Director