Heavy Industry Logistics

COMPANY PROFILE

2015

Heavy Industry Logistics

www.hilogafrica.com | +254 (0)41 4474293

company profile

Outweighing the competition

Editorial: Harriet Pattison

Despite its standing as a relatively new company to the mix, Heavy Industry Logistics has certainly made quite a name for itself within the East African market.

IndustrySA speaks to founder and Director, Matthew Thonger, who explains the company’s plans to venture into surrounding markets and extend its logistics services to customers on an international scale.

It’s hard to specify exactly when heavy industry became such a prominent industry sector but looking back to the mid-19th century, it revolved much around locomotives and steelmaking prior to significant advancements within the chemical and electrical industry which saw a stark increase in the need for this growing industry.

Before long, large construction projects including skyscrapers competing for the world title were built and hydro-electric dams were constructed.

In South Africa, iron and steel began to dominate the heavy industry market, being used in a range of different industries from structural goods to transport equipment and

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machinery and as projects became bigger and larger and more complex, the demand for efficient logistics companies to service and overcome challenges also grew.

HILOG They say that when one door closes, another one opens, which is certainly true for Matthew Thonger - founder and Director of Heavy Industry Logistics (HiLog), headquartered in Mombasa, Kenya. Whilst his initial logistics and procurement company didn’t take off due to partnership disagreements, HiLog, first incorporated in April 2013, certainly has.

An entirely non-asset based company, Matthew explains that the company does not

Heavy Industry Logistics

own trailers or equipment, but is a strategic project management and coordination company that specialises in the oil & gas, mining, construction, power-gen and renewable energy industries in Kenya and East Africa.

“We put together the different subcontractors and equipment, depending on what the job is. So as a part of that, if we’re offering to our clients movement on a door to door basis, we have a network on an international scale of agents that we use, that also use us if they’re doing business in East Africa.”

With 15 years’ experience working within the logistics industry, Matthew made the decision to put it to good use and start up his own independent logistics consultancy in

Kenya. Although initially harbouring dreams of becoming a pilot, Matthew began his career in England, handling air freight shipments at Gatwick Airport before promotion led him to take over a branch for one of the largest logistics companies in the world and a move to Heathrow airport. Before long, he became Country Manager for an African logistics company, looking after the three key branches in the UK; Manchester, Aberdeen and Heathrow. By this point, Matthew had built a strong career within the logistics sector and before long, went to work for a different logistics provider focusing on Africa and working in Switzerland for six months and Nigeria for three years.

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company profile “I worked for about three years in Nigeria before coming to Kenya, predominately in oil & gas logistics but we also did some power generation projects, construction projects and the opportunity arose to go over to Kenya and set the business up there,” explains Matthew.

“The point of looking at East Africa and Kenya as a whole was based on, in terms of large projects, that it is some way behind West Africa. When people talk about Africa as an emerging market, I would say East Africa is the emerging market within Africa. That’s where the oil & gas hype is at the moment. In mining, they have huge reserves and also for infrastructure projects, East Africa is huge for this at the moment too.

“At the moment, oil & gas isn’t a productive industry across the board due to the oil prices so that’s slowed down massively for us. Construction is probably where most of our clients are doing business right now and we’re handling a lot of plant machinery and

1 of 30 tippers destined for Turkana, Northern Kenya discharging from roro vessel in Mombasa PAGE 4

other materials for it - most of that is for the construction industry but also for mining in Tanzania and the DRC,” adds Matthew.

STICKING TO ITS ROOTS Intent on focusing predominately on heavy industry, Matthew explains the company has received a lot of interest to venture into other vertical markets such as food, pharma and retail – “We turn business away on a fairly regular basis, in the sense that we don’t want to mix ourselves up in other industries. We want to remain focussed on what we know and specialize in and dedicate ourselves to our real clients.”

Focusing on one industry as it were, certainly has its benefits and Matthew explains that the equipment needed does not vary much from either of the five sectors it currently operates in: renewable energy, oil & gas, mining, power generation and construction; often employing bulk vessels and trailers capable of carrying

Heavy Industry Logistics

“I find that I’m picking up that business six months down the line now - when people realise the big players really are too big and can’t offer the same level of service that we can”

hundreds of tons. Venturing into the retail or pharmaceutical sectors therefore would equate to a whole new range of specialist equipment, (cold storage, huge local domestic distribution networks etc.,) a different skill-set and extended knowledge.

GROWING FOOTPRINT With a Sh50 billion commitment by the Japanese government to fund the development of the Port of Mombasa, the project will see expansion of the Port Reitz, airport roads and dredging the channel to connect the new terminal to the ocean. It stands as the second largest port in Africa in terms of tonnage and the containers handled per year with an average of 1,700 ships docking at the port on an annual basis. The first phase of the development is scheduled for completion next March with the second and third phases due for completion in 2017 and 2020 respectively. By 2020 the total expected capacity should double from where it is now

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company profile

Demobbing site in Uganda for oil & gas client to their Kenya base

which is currently estimated at 1.1m TEUs. With the development expected to impact positively on businesses operating within the area and subsequent contracts, Kenya Ports Authority – the agency in charge of managing the port – said in a statement at the beginning of this year that the construction of phase one of the second container terminal, expected to significantly boost the port’s vessels handling capacity, was 65% complete.

With the development impacting positively on HiLog and its operations, Matthew explains that the company has recently increased its services further into two important markets, Uganda and Tanzania, as a result of continued expansion plans and an increase in cargo volume deliveries.

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“I like the concept of being nonasset based and using my partners overseas, I don’t see any reason to do that myself”

Heavy Industry Logistics “Since our entry and the recent strategic expansion into the Tanzanian and Ugandan Markets, we have witnessed an impressive increase in cargo volume deliveries and we expect that trend to continue.

“I am confident that Uganda and Tanzania are important markets for the industry and also important pillars to the industry at large,” he added.

Additionally, HiLog has been involved in many notable projects since its inception, including assistance in developing Terminal Two at Dar es Salaam airport – “We’ve sent quite a bit of equipment by air-freight and sea-freight for one of the joint contractors in building that passenger terminal, which is being set up as a quick transit and immigration point for the offshore oil & gas companies. So where they’re developing the chopper hangers and oil & gas dedicated immigration terminal, we sent equipment across for that.

“Also, we moved quite a bit of the drilling equipment to one of the geothermal sites up near Naivasha in a place called Menengai, including the mobile drilling rig,” explains

Matthew.

With a strong network base located all over the world, Matthew explains the project that involved chartering a Russian aircraft cargo and moving extensive camp equipment from Fujairah in the UAE to Mogadishu, Somalia and the need for efficiency it required.

“We had to get the cargo which was in Dubai down to Fujairah airport, so we used our agents there and used their customs licence to complete the export customs formalities,” Matthew explains. “They get it delivered to the airport and we arrange to position the aircraft, load it through the cargo handling agents at the airport and in conjunction with the owners, we organise flight plans, landing rights and so on, both in Fujairah and Mogadishu, Somalia.”

Between Matthew and his business partner, incidentally his wife, they boast long-term experience working within the industry with 30 odd years between them. It’s not surprising then that they have built up a strong networking base of people and businesses they can trust to deliver excellent service and help in maintaining the company’s high standards.

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company profile changes to be made over the coming years, many businesses, both large and small, have had to take note and adhere to stricter and more sustainable guidelines. Matthew explains these new schemes are imperative to all industries and to the future of South Africa.

“To do business with many of these companies, especially in the oil & gas sector, you have to show you are very conscious of it and that you have environmental plans in place. You appoint members of the team who are ultimately responsible for these issues, impacts and initiatives and that’s part of the tender process for many of these oil & gas companies. So everyone is very, very conscious of it and it is certainly a big issue and certainly something to consider.”

FUTURE ENDEAVOURS

Matthew Thonger | Director As with all markets and industry sectors, competition is inevitable but it seems Matthew remains positive; even with the daunting prospect of over 1000 customs licences in operation - and that’s just in Mombasa: “A lot of those are one man bands and I wouldn’t try to compete with them but they take a reasonable percentage of the market share,” he explains. “But they tend to take smaller business, and the companies I’m targeting have more money to spend. So that competition doesn’t matter too much but in new business terms I may lose out to some of the bigger players who have been around a lot longer and those that have a stronger presence.

“However, I find that I’m picking up that business six months down the line now - when people realise the big players really are too big and can’t offer the same level of service that we can. Of course, I’ll push for the deal from the outset, but in competition, that’s where I’m likely to lose out to the bigger and long established companies,” Matthew adds.

With the government’s greener initiatives scheme now taking precedent and significant

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With one office currently located in Mombasa and ‘roaming’ personnel in Nairobi and inland Kenya helping to manage projects at the airport and strategically placed from a business development point of view – Matthew explains the company is now looking to move further into Eastern Africa and particularly into Uganda and Tanzania with the promise of mining opportunities and power grid developments – “Those two are next on the cards.”

HiLog is also looking to increase its footprint further

“We turn business away on a fairly regular basis, in the sense that we dont want to mix ourselves up in other industries”

Heavy Industry Logistics

“I am confident that Uganda and Tanzania are potential and important markets for the industry and also important pillars to the industry at large”

into South Sudan and the DRC over the coming years.

Considering the company is relatively new in industry terms, Matthew explains it has enjoyed the same results in its second year as in its first and now into its third financial year, the company has been busy with orders and enquiries.

So, what of the future?

“I’ve got my ideas, I haven’t set down fixed timelines but I want to have East Africa sewn up, that may or may not include South Sudan but definitely Uganda, DRC, Rwanda, Tanzania and Mozambique. Following that, we may go inland to Zambia and Zimbabwe and out from there, into Durban and Dubai as these are particularly good locations to have regional offices to support East African trade.

“I like the concept of being non-asset based and using my partners overseas, I don’t see any reason to do that myself. What I would do from an oversees point of view is set up sales and administrative offices in the US, Europe and the Far East and drive the business that way, keeping the partnerships with our oversees agents. So, we do have plans but I’m not planning on becoming the next DHL just yet!” concludes Matthew

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Telephone: +254 20 6827707/13 Fax: + 254 20 6827708 Website: www.polygon.co.ke Email; info@polygon.co.ke Address: P.O.Box 6752-00200, Nairobi, Kenya.

A chain is only as strong as its weakest link... Whatever the requirement, it pays to choose your partners wisely. In logistics, Polygon Logistics Limited is the right choice for you.

Polygon Logistics Limited is a company offering a comprehensive range of logistical solutions for organizations and individuals in Kenya, with a scope of extending the same globally. These include clearing, forwarding of both import and export shipments, as well as air charter flight services and airline representation.

We are committed to quality service, people development and excellence. We aim to demonstrate and live by a performance-driven culture, communicate transparently while paying attention to detail.

Jomo Kenyatta international Airport- Swissport Cargo Complex 2nd Floor Suite 224 (Nairobi Office) Nukem Trust Building (Former Nation House), 1st Floor-Suite 9, Moi Avenue (Mombasa Office)

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