Discussing Corporate Security and Protection Solutions in Kenya with Gray Cullen of Wells Fargo

Interview with Gray Cullen, Executive Director at Wells Fargo and Operations Director at Fargo Courier

What is your assessment of the security sector?

The security sector is seeing a shift within East Africa, moving like the rest of the world towards technology, rather than manual security. Vehicles now have tracking systems, and you can implement things remotely, with automated signals coming through to control rooms. We see significantly more remote monitoring these days than we did in the past. In Kenya, the guarding sector is made of about 700,000 guards and we are seeing those numbers reducing quite significantly over time. The growing sector has to do with the technology that is coming in from your CCTV and access controls to your alarm systems with emergency response teams. If there was an opportunity within the security sector, it would be technology-based.

On the cash-in-transit side, due to COVID we saw a 35% reduction in cash movement, and whilst it has recovered, it is nowhere near the pre-pandemic level. Many companies are focused internally, including the banking sector in Kenya, and there is a lot of interest towards cash management being outsourced to security companies such as ourselves. We have five cash management centers around the country, and we outsource those services to a number of banks and large retail entities. That is one area of cash-in-transit which has grown along with the advent of cash deposit machines. Much of the focus in Kenya has moved away from using manual tellers, and the advent of cash deposit machines has really taken grip, moving away from the security arm to the supply chain.

The supply chain is one of those wonderful industries that are not influenced by what is happening, whether it is COVID or elections next year. In 2020, during COVID, we had one of our busiest years, which was unexpected, but we have been very fortunate to be on the back end of a very large expansion since 2010 in Kenya. Our company has significantly grown, and we have been able to expand to 114 branches. We were a quarter of that five or six years ago, and that has enabled us to now move into other countries, such as Uganda, where there is a huge opportunity with the new pipelines, oil exploration, and the logistics that run alongside that. We are looking at other East African countries as well. What you find in the supply chain market is that the majority of large corporates and large clients tend to base themselves in Kenya and use it as a hub. Then they want the same services replicated across East Africa and that is where Fargo comes in. We have seen a huge drop off in the manufacturing and retail sectors last year, but they have recovered somewhat. Tourism was also very affected. We saw a massive uptake in the pharmaceutical and relief sectors, which Fargo was very fortunate to take advantage of. That gives a general landscape of the supply chain and the security industry.

How does Wells Fargo distinguish itself from the competition?

Wells Fargo was established in 1977 and has been one of the longest serving companies within the security sector in Kenya. We have had a very strong footprint in the banking and finance sectors. We have expanded our services and have gone more corporate over time. We have a very large division within the cash-in-transit and cash management side, which a lot of security companies do not focus on. We are the second largest player within that sector, with a heavy focus on the technology side of the business. We are one of the very few companies that does not focus so heavily on man guarding, which seems to make up the majority of the security sector within Kenya. We focus on the more niche markets where you do not get as much competition, where specific and customized solutions are needed for clients, and that is where we tend to place ourselves.

What do you mean by niche markets?

Vehicle tracking seems to be a common denominator from these solutions that we are now providing on a cloud basis for clients to remotely view their entire fleet, monitor fuel, get alarm activities, benefit from opening and locking solutions for containers, etc. On the CCTV and the access control side, we have multiple wireless solutions now for both domestic and commercial clients, where everything is controlled, from your gate to your alarm system, to your CCTV, from the point of view of your phone, and that is an area the client base in Kenya seems to be very interested in growing and developing when it comes to remote access. Looking at CCTV solutions in the past, the majority were done through a DVR storage setup within the office and a lot of the criminals would often take the DVR setups as they left the premises. Those technologies are archaic and still very prevalent in Kenya, but Wells Fargo is very much focused on moving away from that.

How do you distinguish yourself in the banking sector?

We have a very large division within the cash-in-transit and cash management side, which a lot of security companies do not focus on. We are the second largest player within that sector.

We have been very fortunate to grow to second largest within the security space in Kenya, and what made us different and probably the reason for much of that growth was that the client base in Kenya certainly needed a secure solution. They needed technology-enabled solutions for online tracking, which may seem obvious to the rest of the world, but we were the first domestic provider to roll out an online tracking solution and utilize geocode tagging for deliveries, which is a requirement in the pharmaceutical market and the electronics market. On top of that, Fargo has got a very good reputation in terms of its reach. That is why the Fargo Group works so well, because security and supply chain can often go together. There are areas in Kenya which we can expand to quicker than a security company alone or a courier company alone because we are able to subrogate the cost between the security company and the supply chain company. So, you will find a Fargo branch in a remote town in Kenya well before you will find an out-and-out courier company or an out-and-out security company. Being the first mover into a lot of towns has certainly been a big advantage for Fargo. We have been able to grow to 114 branches and 550 vehicles within the Group within Kenya alone. We are known for delivering to the last mile, irrespective of whether that is in the northeast deserts of Kenya, 40 miles out from the nearest town.

When it comes to the courier sector, we are certainly one of the largest players in that area. Fargo Courier has taken a bit of a different view in the sense that we would like to be more of a supply chain company over time. It is certainly one of our strategies. Five years ago, we went into contract logistics, and we currently operate out of 25 warehouses in Kenya, doing outsource 3PL and 4PL solutions for clients. We got our clearing and forwarding license last year. We are adamantly going to start our clearing and forwarding division and we envisage that this will be a very big part of our revenue over time. We also have a document archiving division that sits alongside our contract logistics division. We are a little bit more of a unique entity in the sense that we would like to be a one stop shop. Besides, we are already doing what everyone considers to be the most difficult form of supply chain, which is the last mile delivery. We would like to be that one stop shop for all of our 3000 plus clients. Whether their goods are in Germany or in China and they need them delivered here, stored, distributed, they would only have to deal with one account manager. This is our thinking.

How do you operate within the Group?

One of our big market advantages is that we are a very quick company to move on a decision. We do not have to wait for multiple board meetings to make decisions six months later. Decisions are often a phone call away. That has been the success of Fargo and that’s why we have grown over the last 10 years. When it comes to our expansion and how we operate we have a unique culture. We are a very linear operation. We have an open-door policy, and we have individuals that have come from the competition to join Fargo. We sometimes find that a difficult thing, in the sense that they come in with a particular mindset and way of thinking. It takes time for them to learn the way we operate and do things, which is certainly unique in the market.

What is your approach to entering the Ugandan market?

We have expanded into Uganda this year and we are going in with our contract logistics division. We are operating a few key clients within Kenya that have expanded out to Uganda and wanted us to run their operation there to the same standard. So, we have done that, and off the back of that, we will have a clearing and forwarding division that will come. Then, over time, what you will find is that as the contract logistics and the warehousing grows, there will be more and more of a need for us to have a transport solution for the last mile for courier and transportation. And we will certainly develop and grow a transportation fleet within Uganda to take advantage of the new influx of investment that is coming into the country as we speak, with the new oil projects, oil pipelines and the like. Uganda is a very exciting economy and a very exciting opportunity for us. It is a small market, about the size of one of Kenya’s five regions in terms of economy, capacity and size, from what we have seen in the past, but it is a necessary market because it is your steppingstone into southern Sudan, Congo, Rwanda and the like. So, it is a key market for Fargo before we start taking those next steps for the other countries to expand into.

What are your long-term and short-term projects?

When the COVID pandemic came around, we restructured a lot of our strategies and points of view. With COVID and the elections coming up, which inevitably destabilizes and unsettles the market somewhat, we thought these last two years weren’t going to be very busy years for us. So we took the opportunity to look at internal development. In 2020 and 2021, we have really focused and invested heavily in rolling out new technologies within the group. We have gone on an internal ERP – SAP HANA and SAP Fiori – to allow us to bring in a level of control within the business that we have not had previously. It will more importantly allow us to clone our operations in other countries as we move forward. It has been a huge project, as we have had to integrate our transport management systems and everything else with SAP. That is now coming to completion and that has very much been the focus, on top of senior management taking the time to look at these other countries and start going into it. Uganda is already up and running and we see that being an expanding market for us, especially within the next few years. There are other countries within East Africa that are really exciting for Fargo and we are in the process of setting up companies within those countries for us to operate in the long term.

What drives you? What is your inspiration?

I have been in the Fargo Group for over 13 years and there is not a day that goes by that I don’t look forward to coming in and doing what I do. There are new opportunities in this market. I am Kenya raised and I worked in Australia and Northern Ireland before coming back to Kenya. The opportunities within Kenya and East Africa are phenomenal as far as I’m concerned. We have grown this business organically and I think we are only scratching the surface of what this business can achieve longer term and within the group structure as well. Personally, I come from a sports background. I played a relatively decent level of rugby, and I have always loved the team atmosphere. I very much adopted that within my philosophy and the way we operate within the business. We have an open-door policy, whether you are the senior manager or a director, or whether you are a cleaner that comes in with a new idea or a better way of developing this company. As an example, I had a driver many years back come and tell me about the benefits of using this particular vehicle and model over the other. The company was going in the other direction, and he was probably solely responsible for us buying over 100 units of this particular model of vehicle going forward. So, I am a full believer in the fact that everyone comes with some great ideas and we must ensure that everyone feels part of the team. If the Fargo team eats Fargo, sleeps Fargo and goes home talking about Fargo to their friends and family, it often does a huge amount for your company, which then sells for itself. So that is the philosophy I live by.

ABOUT WELLS FARGO AND FARGO COURIER: Wells Fargo Limited was incorporated in 1977, initially providing dedicated, specialist professional security services to the banking sector and other financial institutions in Nairobi city and environs. Wells Fargo has since grown to become a leading corporate security and protection solutions provider, offering premium services to major private and public organizations countrywide. Wells Fargo and its sister company, Fargo Courier, are proud of being active members of the Kenya Security Industry Association (K.S.I.A) and Courier Industry Association of Kenya (C.I.A.K) respectively.

For more information, please visit: www.fargo.co.ke.

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