Roy Transmotors: A Logistics Provider Specialist in Kenya and the Region by Mukhtar Omar

Interview with Mukhtar Omar, Executive Chairman of Roy Transmotors Ltd

What is your assessment of the logistics sector compared to three years ago? What are the latest trends?

The logistics sector like anywhere else in the world is a key driver of the economy. Logistics is the key to business. Three years ago, in Kenya, we had visions of what the SGR would do, what the government would do, what the LAPSSET project would be. Unfortunately, only the SGR has been completed. It is not as effective as we expected it to be. The time is right, but the management is a problem. The country’s infrastructure was not ready for handling such large volumes of containers in the local ICD (Inland Container Depot) in Nairobi. Now, the country wants to extend to Naivasha. It will probably improve the sector there. The government has made positive efforts to give land to our neighboring countries such as Uganda and Sudan for them to come and put in their own ICD. Once this happens, they will have more confidence because the ICDs will belong to the countries themselves, one stop shop duties will be paid, and everything will be easier for them. I expect these things to correct themselves. The LAPSSET project has been slow, but it is ongoing. The pipeline that was expected to have started two or three years ago, unfortunately, was delayed. But now, the Ministry has announced that they have the blueprint ready. If this comes into play, we will have a lot to transport and work on as far as the building of the pipeline is concerned. Once the pipeline is complete, there will be an economic change because Kenya will earn a lot of foreign exchange from this. It will be a win-win for us.

Is the sector competitive? Are there many players?

The area of our coverage is very wide. It would be difficult to find another company that offers all these services in one place. We have grown as the industry has grown.

I joined this company in 1979. I have been in this company for 40 years. I have seen the dynamics of transport change. The future for transport is there, but the dynamics have changed to more professionalism, cheaper transport, and giving better solutions by improving technology. For example, when we were transporting 10 years ago, the vehicles were giving 1.2 km/liter fuel consumption. Now, the vehicles give 2 to 2.4 km/liter depending on the sector. The infrastructure has improved which has helped lower vehicle maintenance and give us a competitive advantage. We are planning to have a one stop shop, which was our vision from before. We have a sister company, Roy Parcel Services. We are now changing the management system and bringing in a new IT based system. We want to change and make sure that the IT is completely integrated in our group of companies. We have warehousing and now we have started approaching the clients for giving them one stop services including product delivery. For example, I had a meeting in one of the neighboring countries and promised to supply product delivered, meaning the importer does not have to invest and go through the hassle of buying product. We are ready to supply, secure, and deliver. Our main advantage as a transporter is giving comfort and ease for people to do their business. The client I visited in this instance had a lot of problems handling transporters, importers, clearing agents, forwarding agents. We told him we would invest. He gives us the security and everything will be delivered and taken care of. We are trying to develop our business in such a manner that we satisfy our clients’ needs. We have earth moving equipment. We are thinking of going into other businesses where we can mine and still deliver the product to the industries as the raw material they may need. I am confident that we will get there.

What are your competitive advantages in these areas? Why should your clients choose you over another company?

Roy Transmotors is miles ahead of our competitors. We had foreseen the need to become professionals. For example, in 2003, we were the first company to be ISO certified in transport in Africa. That shows that we have been thinking of professionalism and effective service delivery. Secondly, we have been working with multinational companies such as Chevron, Shell, Total Kenya, Total Uganda, Kobil. The key factor here is safety. We have developed the safety culture in our company to the level that world class standards demand. We are subjected to international audits by our clients. They do not want to see the profitability of the company. They find us at the highest level of safety. Safety not only saves lives but it is cost effective for us as well. If we drive safely, we maintain the drivers. We monitor the drivers’ safe driving habits. We look at time management, preventive maintenance, and we have less accidents. We have a complete safety monitoring unit which runs 24 hours a day. We operate under the journey management plan. Each and every truck that leaves their destination has a specific journey plan depending on the time of the departure from the loading point. We have safe designated stop areas. We control the fatigue of the drivers. We ensure that there is not excessive driving. We have mandatory stops every 2.5 hours for them to get adequate rest before continuing on. We care about cargo security. There are certain areas we do not want the cargo to be carried through at night. Especially for petroleum products, it is dangerous for us to drive at night. For LPG, we do not park near a town because someone could throw something as small as a cigarette too close and it would cause a huge problem. Safety is key for us and we are trying to develop an ERP system which will be web based. Our clients will have access to everything including our driving behavior. We want to keep transparency. We give them access to track the trucks that are dedicated to them but also hourly reports of the truck position and we share our driver evaluation with our clients. The driver may be braking harshly, accelerating harshly, exceeding speed limits, night driving. We have a proper driver management in place and we are now 95% complete. Within the next month or two we will be fully compliant. Because of what I am delivering, my competitors would not be able to do the same and we remain ahead of the competition. We are comfortable working with multinationals and blue chips and our systems are improving every day. We have always thought ahead and now I have an energetic team that I will hand over the baton to, who wants to take this company to a different level.

What are the different areas of business you are in?

We specialize in many areas where service is difficult to find in this part of the world. I do perishables. I have done milk for Brookside for over 25 years. We have grown with them to the level that they are today. We have improved and now we are masters in this business. We have been in the petroleum sector for about 30 years now. This includes LPG, AGO, kerosene, lubricants, lubricants in pack form, LPG delivered in cylinders. We also work for Unilever where we do hazardous cargo like caustic soda. We do CPO for those industries that produce cooking oil. We do containers in transit. We do low loaders. We also have earth moving equipment. The area of our coverage is very wide. It would be difficult to find another company that offers all these services in one place. We have grown as the industry has grown.

How have you been changing with customer requirements?

In the past 20 years, petroleum companies had owned collection from the depots which was not safe. With time, the oil companies have demanded for them to achieve world class standards. We have complied with all these demands including investment, training, and improvement in our quality of equipment. That is why they are very comfortable working with us because we are ready to move to the new development. We have also won Best Total Transporters Award in Africa which was presented to us by a Total Paris representative at a function.

What is your international reach?

We cover the East and Central African region. We work in Uganda where we also have Roy Transmotors Uganda Ltd. We transport milk from northern and western Uganda to the dairy in Kampala. We are not only expecting to grow locally, but also regionally to meet our clients’ demand. Some of our clients now want to go to Kigali, so we will also invest there and give them the service they need. As Roy Kenya, we are now covering the eastern DRC. We are contracted to Total Congo. We are doing Kigali, Uganda, Tanzania, Zambia for our clients like Unilever and more.

What is your vision for the company in two to three years’ time?

The type of service delivery that we are developing now as far as the client needs are concerned is of the highest level. In the next three years, I expect to reach an even higher level. I have a young and energetic team in place. We have developed a new requirement to deliver products to clients within the region. We are also developing warehouses which will be complete in the next year and a half. We will offer small storage services to our clients. If a client needs to import a container and store the goods for two to four months, we can give that short-term storage similar to what the western world offers. We can give our clients a one stop shop experience.

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