CIS Business Outlook

CIS BUSINESS OUTLOOK STRATEGY & TRENDS IN MARITIME LOGISTICS

2015

CityFlex Integrated Services

TABLE OF CONTENT Business Resources: Strategy, Trends and Experience Maritime Logistics in Practice

05

Director’s Message

08

Shaping The Future

09

Enabling Sustainability & Mobility

10

Forming Partnerships

12

Enhancing Strategy

14

Expanding Business

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CONTENT DESCRIPTION Business Resources: Strategy & Trends - Maritime Logistics in Practice is about creating business results through Logistics in the Oil & Gas industry. The report explores the utilization of logistics and procurement resources in Nigerian companies with a focus on best practices in business and current and future solutions

The vision to transform the maritime industry in Nigeria, presents lucrative investment opportunities and openings for market entry, particularly for local companies.

A SMARTER APPROACH By 2050, about 9.5 billion people will populate the planet. More people means more pressure on resources, specifically Energy demands which are mounting in step with the industrialisation of developing countries. The World Energy Outlook (WEO) predicts energy consumption will increase by one-third between between 2014-2035 and developing countries alone will account for more than 90% of the growth.

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OOKING AT NIGERIA, THESE EXPANSIONARY TRENDS HAVE CREATED AND CONTINUES TO CREATE AN UNPRECEDENTED ARRAY OF OPPORTUNITIES WITHIN THE OIL & GAS, ENERGY AND MARITIME SECTORS. AS THE LARGEST MARKET IN AFRICA AND THE BIGGEST ECONOMY IN SUB-SAHARA AFRICA, NIGERIA ACCOUNTS FOR OVER 65% OF TOTAL SEABORNE TRAFFIC IN BOTH VOLUME AND VALUE IN WEST AFRICAN AND CENTRAL AFRICAN SUBREGIONS. SIMPLY PUT: BY VIRTUE OF THE SUPPORTING STATISTICS, NIGERIA HAS BEEN COINCIDENTALLY POSITIONED TO BE THE TOP AFRICAN COUNTRY LEADING IN MARITIME INDUSTRY.

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UR DESIRE IS TO DISCUSS HOW WE CAN APPROACH AND MAXIMISE THE OPPORTUNITIES ASSOCIATED WITH STRATEGIC PLACEMENT AND PARTICIPATION TO SECURE NEW MARKETS WITHIN THE INDUSTRY. S WITH ANY OTHER PROGRESSIVE INDUSTRY, THE MARITIME SECTOR IN NIGERIA COMES WITH ITS FAIR SHARE OF CHALLENGES. ASIDES FROM THE INFRASTRUCTURE, THE INDUSTRY FACES MAJOR CHALLENGES WITH FUNDING, INADEQUATE MAN-POWER, TECHNICAL TRAINING, INDUSTRY DOMINANCE BY FOREIGN BODIES AND INCONSISTENT GOVERNMENT POLICIES.

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N THE OTHER HAND, ONE CAN YET ARGUE THAT THE ODDS ARE STILL IN OUR FAVOR; NIGERIA IS THE LEADING MARITIME NATION AND SERVES AS A MAJOR HUB FOR LOCAL AND INTERNATIONAL TRADE IN AFRICA. THIS [MARITIME] SECTOR IS SECOND IN CONTRIBUTION TO THE ECONOMY’S GDP. WE HAVE IN RECENT YEARS SEEN SEVERAL REFORMS TO STIMULATE THE LEVEL OF NIGERIAN PARTICIPATION OF LOCAL COMPANIES AND INITIATIVES TO KEEP REVENUE IN THE NIGERIAN ECONOMY.

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BELIEVE THE ODDS ARE INDEED IN OUR FAVOR. IT IS MY HOPE THAT THE CONTENTS OF THIS BRIEF WILL BOTH ENLIGHTEN AND INSPIRE DECISION-MAKERS AND PROFESSIONALS WITHIN THE COMPANY TO DEVELOP NEW WAYS OF PRIORITIZING OBJECTIVES THAT WILL PROVE SUSTAINABLE OVER THE NEXT FIVE YEARS, AND OPTIMIZING BUSINESS STRATEGIES THAT WILL HELP PLACE US IN A “READY” POSITION AS OPPORTUNITIES ARE MADE AVAILABLE.

Adebayo Aluko Vice President

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65% SEABORNE

Nigeria is the biggest market in Africa, accounting for the largest traffic in volume and value

$3trillion ANNUAL CONTRIBUTION The size of the market ranges from $25billion to $3trillion with its GDP second to the oil & gas sector in Nigeria

90%

ENERGY CONSUMPTION WEO predicts African and developing countries will account for 90% of total worldwide energy increase

SHAPING THE FUTURE: EMERGING MARKETS

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HEN IT COMES to Maritime in Nigeria, the ambition remains clear: To mobilize the industry’s various sectors, i.e. enterprises engaged in the business of designing, constructing, manufacturing, acquiring, operating, supplying, repairing and/or maintaining vessels, or component parts thereof: of managing and/or operating shipping lines, and customs brokerage services, shipyards, dry docks, marine railways, marine repair shops, shipping and freight forwarding services and similar enterprises. This emerging industry also includes a significant component of traditional oil and gas and renewable energy.

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he size of the market ranges between 25 billion to 2 trillion Dollars with annual contribution GDP of 35-40%.

Owing it to the rising oil [energy] demand, the use of Support Vessels is

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on the rise with the new oil and Gas Exploration & Production projects springing across the region (Going Deep Offshore). Vessel owners and operations are looking to upgrade their fleets with newer vessels, fitted with advance technology, high security capabilities and other assets. In short, we are in the midst of steady transition.

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s expected, the growth expectancy is projected to surge exponentially in this sector and one of the key investment within the sector is in fleet acquisition. Vessels represent a major segment of assets in the sector where tanks and cargo vessels are very popular. It has been estimated that a minimum of 20 vessels will be required as take off to efficiently improve the transshipment of import and export in the next five years in Nigeria.

60%

26.7% 13.3%

Tanker Vessels

Cargo Vessels

Other

SEABORNE TRAFFIC INTO NIGERIAL

ENABLING SUSTAINABILITY & MOBILITY It is one thing to be able to identify opportunities or assessing the levels of least penetration in the industry; it is a whole new ball game when it comes to addressing the financial/investment aspects.

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HE MARITIME industry is heavily capital intensive worldwide. How to finance better vessel supply and maritime support services to the oil and gas industry is a hot topic in the African region.

Politicians, authorities, financiers and companies are all well aware that if the world demand for energy continues, the region’s financial infrastructure will have to improve.

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o support the efforts of meeting the huge demand of capital equipment and vessel acquisition, Nigeria has weighed in and has steadily started building its shipping investment as a deliberate strategy to stimulate the growth of its national economy.

One such strategy includes increasing the level of participation of Nigerian banks for maritime vessel financing, which is relatively less compared to the funding acquired internationally. However, there have been commendable efforts as banks are now increasing becoming keen on seeking to understand the underlying opportunities of

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MISSION: Known within the industry as key service providor of specialised services to EPC and power companies.

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maritime financing.

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ubsequently, the government has also initiated a number of programs, all geared to stimulate the industry. Amongst these programs are; the CVFF Funds which is a government funding for vessel requisite - carried out throughout the banks. Asides from financial funds, the Nigerian Content Development and Monitoring Board (NCDMB) is set up to ensure nationals who have vessels that meet the set requirements are engaged in the industry.

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hus indigenous ship operators in the Oil and gas industry are advised against indiscriminate acquisition of vessel without specification. The implications are huge as it allows for effective participation of lessors in the sector or other parties who otherwise would not have such a vast spectrum of opportunities availed to them. This by no means levels the playing field, it simply opens up the game - in a big way.

OBJECTIVE: To provide full supply-chain to the Oil & Gas and Maritime industries.

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ROADMAP: Map out current position, analyse entry to market and project revenue streams.

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FORMING PARTNERSHIPS Past performance indicates that companies who sought and bid for the Oil and gas contracts, with the backings of international partners faired 80% better on contract bid merits and awards.

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ome ofthe lucrative ways local companies are penetrating the markets are via partnerships with international companies who demonstrate a broader capacity, i.e. financially, technically and in terms of expericence and project executions.

TYING IT ALTOGETHER For almost a decade, CityFlex has successfully operated as a general logistics company in the Nigerian terrain. Since its inception, it has become a leading provider of support services for the Oil & Gas and Maritime industries.

The company has been able to secure contracts with notable Oil & Gas subsidiaries, such as; Addax, Dangote Refineries, Saipem, Transcorp and Seplat. Recently, CityFlex has secured the eligibility to place bids, bill and contract with major oil and gas companies - Total and Mobil. Contract value estimated in excess of $50M.

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ENHANCING STRATEGY The decision to increase service offerings to a full supply chain specialized for the Engineering Procurement and Construction (EPC) sector is premised on the increase in demand on maritime vessel supply, procurement and other logistic services in the sector.

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edged by the local content policy and leveraging on existing business capabilities and partnerships, the company has laid a foundation for upcoming strategies and plans for the next five to ten years; one of which includes creating a renowned brand - one stop shop support services - for the oil & gas and power sectors.

PARTNERSHIP

he outlook for future energy consumption in Africa points towards the need for a balanced energy supply and ancillary.

Security, sustainability and economic prosperity - these are the three classic energy trilemma that we will face in the coming years.

Support services will be essential to getting that balance right - hence the focal point at CityFlex

55% BID AND CONTRACT INFORMATION

LOCAL INDICATORS

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75%

62%

92%

“At this stage, we have to adopt a balanced logistics portfolio and strategy to support the off-shore industry. Our goal is to hedge partnerships on the local and international level so as to leverage all of our advantages.� says, Adebayo Aluko, Vice President.

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3PL & 4PL TRANSFORMATION

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Our businesses offer real time information solutions placing our customers, suppliers and staff in an informed position with regards to contract performance, deadlines efficient and effective project implemenation techniques

CAPABILITIES The company has embraced the transformation process within Nigeria .

EXPANDING BUSINESS CAPABILITIES The routing of a product, from concept to its final disposition, features many more stops today - value-generating milestones that dot an increasingly complex supply chain.

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ROFIT potential exists not only at primary sales points but also at secondary and tertiary channels, all the way through final disposition. Unlike other 3PL providers, CITYFLEX can support supply chain requirements throughout the product lifecycle. From sourcing through end-of-life services such as supply chain solutions that deliver the greatest return on investment for your products.

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UR AIM is to improve our current supply chain goals by transforming to a 4PL provider, offering end to end supply chain solutions and logistical service offerings such as a custom supply chain technology. This blend of 4PL and 3PL service offerings allow CityFlex to offer the market a unique service offering that takes full advantage of supply and demand forces within the global logistics platform without sacrificing service reliability, price and product security.

LOGISTICS

Freight Management - Air, Sea, Inland transporation

PROCUREMENT Supply Tools and equipmemt for Oil & Gas and Power Sector

Over 124 countries in Network COMPANY GROWTH Our organisation consist of expertise and partnerships with over 100 years of experience. Our solutions are designed to lower cost, increase efficiency and deliver results. A few of our prominent partners include Global Logistics Network, ASCO and CEVA.

SUPPORT SERVICES OFFSHORE O&G

VESSEL SUPPLY Partner with vessel Agencies and Fleet owners

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COMPANY PERFORMANCE 2012-2014 The company has experienced steady growth especially in the last three years.

Betweem 2012 and 2014, CityFlex has been able to generate over N1 Billion (Naira) revenue - a feat that could be described as expectional for a young organisation that only embraced Oil & Gas Logistics business in less than 3 years ago.

N600 Million

Inspite of the acheivement recorded between September 2012 to date, CityFlex sees herself as a logistics company that is yet to start maximising its share of the Energy market, considering the huge available opportunities that are made possible by the Local Content policy of the Nigerian Government.

N300 Million

CityFlex, now known as CityFlex Integrated is one of the fastest growing Energy, Oil & Gas Logistics and procurement company in Nigeria. Independent and privately owned, CityFlex employes experts from all over the

N98 Million world.

2012 2013 2014

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Considering the huge amount of available opportunites made possible by the Local Content policy, CityFlex is well placed to start taking its share of the oil & gas market

BRIEF HISTORY & TIMELINE * CityFlex an international Logistics services company established in 2007.

CityFlex is an intercontinental leader in freight-forwarding from West Africa. * CityFlex and its global network spans 629 Offices in 322 Cities in 128 Countries. * Our direct relationship with a variety of vessel carriers, enable us to offer competitive rates of 45-40% less than our competitors. * We offer one of the best Logistics-Procurement framework through our longterm relationship with our international partners * The majority of our activities are delivered through large multi-service, long-term outsourcing contracts. * In 2014, we established bid eligibility for major oil & gas contracts valued over $50m.

CityFlex is owned by its management and a body of private equity investors.

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2013

Established services, inc 2007 in Nig Established logistics services, incoporated in Nigeria

2016

Established logistics services, incoporated in Nigeria

d logistics coporated geria

2015

2014

Contract Bid Eligibility for Total and Mobil valued over $50M

Established logistics services, incoporated in Nigeria

CONTACT US 20, Aromire Avenue Ikeja, Lagos T: +234 700 CITYFLEX W: www.cityflexintegratedservices.com E: info@cityflexintegratedservices.com