"Compete or forfeit"- Rainoil

Against the backdrop of major IOCs’ divestment from downstream operations in Nigeria, indigenous companies have taken up the challenge and are driving aggressive investments in last mile operations and services. M&P Nigeria engages Ayuba Loko, Head of Retail and Commercial Sales at Rainoil Limited . to determine the factors behind the latest trend.

What is the idea behind Rainoil’s recent retail outlet expansion initiative?

Rainoil has been involved in downstream retail marketing for many years now. The company is 20 years old and we have spent most of that time doing retail business. The focus on stations is aimed at building a synergy around our tank farm operations. The plan is to expand aggressively so that we can also draw down and optimize the operations and integrate along the value chain. We are trying to build a business that is fully integrated across the vale chain, from shipping all the way to tank farm operations and downstream marketing. The objective is to build a downstream network that will rival any other in the country.

This is a very competitive sector. What distinguishes Rainoil from every other operator in the downstream sector of the industry?

There is serious commitment from the ownership of the business as well as the directors. They are very committed to the industry. Rainoil has constantly been investing in the sector so it has been a focused dream of the ownership to build a world class Nigerian company to achieve the status of what we consider major marketer. The idea is to keep on investing to achieve our objective. We also hope to do it organically not necessarily by acquisition. That is the dream and there is a strong team that guarantees decisions are always arrived at objectively in order to optimize whatever investments we are making. Nigeria is a very big market and if you can dominate Nigeria, then you can penetrate Africa with ease.

There’s been a trend by IOCs divesting their downstream operations in Nigeria. What do you think is responsible and how does this impact on Nigerian operators in the sector?

In recent times the market has become very competitive and sometimes the local knowledge is very useful for competitiveness. The IOCs view the whole world as one country so they pick and choose where they want to invest, but Rainoil being truly Nigerian is committed to Nigeria and we will keep on investing to expand our business here. The business fundamentally is a low margin business, but it is profitable if you can run very profitable high volume outlets.

I think it is the competence that we have, coupled with the team and management structure, we have to supervise these stations and make sure that we give the public what they want in competitive pricing, integrity at the pumps and good customer service. It is easier for us who have the local knowledge to enforce that throughout our network and maybe the IOCs are struggling to achieve that.

Just as IOCs are withdrawing from the downstream sector, there is an influx of Nigerian operators. From a professional perspective, do you think we have the capacity to take over and dominate the sector effectively?

If you look at the market as it is structured presently, “independent marketers” - a lot of which are Nigerian companies are doing over 60 per cent of the volumes and that is likely to grow. I think we are doing it already but the question should be whether we can do it better. And I am of the opinion that we can do it better than the IOCs because we have a stake in the country and we have the competence.

Nigerians excel in everything they set out to do, so if we have a vision of what we want to be and are willing to commit the resources to achieve it, yes we can. It is a technical business. Operating service stations professionally is not an all-comers affair. There is a mix and some players may not be as strong as others but I think Rainoil has distinguished itself. We run professional stations in a safe environment. There is no limit to what we can do and I guess the competition only spurs us to do better and I have confidence in Nigeria and Nigerians.

How many retail outlets does Rainoil operate currently nationwide?

We have over 45 retail outlets and the plan is to scale that up to over 100 within the next year. It is quite an ambitious objective. The limitation is in finding the right sites; however we are prospecting aggressively across the country and when we find a suitable market we will always participate. I think 100 sites are very achievable especially in the short term. If you look at it in terms of our ex-depot operations as a percentage of the market, you will agree we are a significant player. So we want to also push down into the retail space and show our dominance. With that number of stations nationwide, safety should be a source of concern for you at all times.

What is your capacity to respond to emergencies and what has your safety record been like over the years?

From inception we have not had any major safety or environmental incidents in any of our stations; and while we are grateful to God for that, it is not just a chance occurrence as we have a very strong commitment to safety. All our station managers and personnel go through rigorous safety training internally and in conjunction with national bodies. We also have staff who have benefited from some international training on handling of white fuels and handling of hazardous environment which the retail outlet presents. We also have very strict guidelines on how to operate in a safe and environmentally friendly way at all times. Safety is a very big part of the industry; in fact, it is everything because it is paramount.

It is said that you don’t get a second opportunity to make a first impression. What do you look out for when you recruit staff for your service outlets, considering that they are the ones who project the image of the organization to the customers?

We attract some of the best qualified people for different positions at our stations and we remunerate them adequately so we retain and attract the best at all times. We have a character test which we administer internally to make sure that the attendants are of the right skill set. There are character requirements for people who apply to such positions. You must be someone who is customer friendly, detailed and meticulous so that you conform strictly to everything that needs to be done.

We also try to set an academic requirement because we feel that it is an indicator of the person’s ability to learn; this is because we don’t want the attendant position to be a dead end position. Basically, you must fit the profile in terms of being able to operate the equipment, receive training and internalize it. We also organize quarterly refresher courses.

How do you determine the most suitable location for a retail outlet?

There is always a site analysis. It is a very rigorous process that looks at the population demography, traffic flow and probable demand from the site and what is physically available at the location. All that goes into determining how many nozzles should be deployed. We try to optimize the sites we have, more and more we find ourselves building bigger sites because of huge demand at major locations.

When shall Nigerians begin to enjoy the benefit of 24-hour retail outlets service? What would you consider responsible for our inability to run such operations yet?

Such stations exist. In our network, we have some stations that operate extended hours for as long as there is traffic and a need for the service. A big consideration is insecurity and because there is always a lot of cash handling at the stations, there is a perception that there is always cash available, so we need to provide adequate security for extended hours operations. I think to a large extent where we have reasonable night life and demand we adjust our operations to meet the demand. I am sure that as the competition becomes stiffer, more stations will adjust accordingly.

As a policy, we analyze our sites and look at what we call minimum traffic requirements. As traffic reduces there is a cost to operations. We do not have steady electricity and we need to power the stations on generators and we also need to have staff on standby because we have not fully embraced self-service in the country. When you look at those considerations then you will know that there will be a level at which you need to slow down and shut down the site for the day. Once the dynamics are right, we will adjust.

As Nigeria rapidly embraces technological innovations in all sectors, what is Rainoil doing to stay abreast of developments?

Rainoil is at the forefront of technology deployments at our stations. We use technology as much as possible to ensure quality and also manage our stock and inventory at the stations. We are very tech-savvy and have thought about all these ideas. While we feel the market may not be immediately ready for some of these advancements, we are always willing to try. We have recently acquired some pumps that have capacity for some of the technological innovations you have mentioned like full multi-media. We have also introduced card payment solutions at all our stations nationwide as well as product control equipment for inventory and stock keeping.

We really are willing to deploy such advanced technology but we can’t say when exactly because we need to study the market to determine the right time to test new solutions. We are at the forefront and when the time is right Rainoil will be a pioneer in that regard. For now, we are looking at the full offering. When you try to do solutions and equipment deployment, you also try to build personas of likely customers and try to see what those people like to do. It is a very rigorous process. Through this process, we have noticed that there is reluctance among Nigerian customers to do self-service. Our research shows that we are not eager to handle the nozzle ourselves. Quite alright, we have embraced card technology but the self-service side is still lagging and with that, you cannot have a fully integrated system yet.


We are in the middle of a major drive to increase our presence in the retail space. We are seeking national presence and these are big things for the Nigerian market. In the areas we operate and are dominant, our customers will testify that we offer the best service available. Our stations never run out and we always make sure that the quality of the service and integrity of our equipment is guaranteed.

Our plan is to deploy that quality nationally and give more Nigerians the opportunity to benefit from the unique offering that Rain Oil represents. Nigerians across the country should look out as new Rainoil outlets come up; and I encourage them to drive in and witness true world class service in Nigeria.


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